(5 minute read) It is becoming increasingly fashionable to talk about sustainability. Last month, Stylist magazine’s front cover featured this image, which was linked to a 5 page article about plastics, their impact and tips on how to avoid using them.
I find this amazing. In a short space of time we have become a society where people are not too far from becoming social pariahs if they are seen to be using resources wastefully. Of course, this has not happened overnight. Countless amazing organisations have been working tirelessly to highlight the impact that poor resource management (e.g. single use plastics) have on our planet, our livelihoods and our health. And this is genuinely a resource management issue rather than specifically about straws and plastic bags, though you might be forgiven for thinking it was limited to those things.
The tipping point in the debate was triggered, here in the UK at least, by Blue Planet II, which highlighted the issue of poor resource management (in the form of marine plastics) in a way that was accessible to the general public. It also had the advantage of being guaranteed to be viewed by a significant proportion of the (UK) population.
Fun fact – apparently no one in the UK lives more than 70 miles from the coast.
But Blue Planet’s impact was only possible because the tide of public opinion was already changing. We had already seen the introduction of the plastic bag tax – first in Scotland and then elsewhere. The issue of disposable coffee cups was already in the news, as was the marine plastics issue more generally. But it didn’t have anywhere near the level of ‘mainstream’ attention that it has today.
It shows the awesome power of marketing and television, not to mention the pulling power of Sir David Attenborough and the team at the BBC. It’s one of those serendipitous moments when everything is aligning in favour of change towards a more sustainable economy and there are thousands of people, initiatives and organisations out there working hard to maintain the momentum.
But while it is fashionable to talk about sustainability that is not the only driver for focusing on it. What will it mean for businesses in reality? There are some major changes happening globally which are going to have an impact, and some fantastic opportunities opening up.
1. Policy changes – reputation
We are starting to see changes made by businesses looking to maintain or improve their reputation. It used to be that the only businesses you would hear talking about reducing resource consumption and waste generation would be the tree hugger types or the posh ones – you know: the ones you find in the ‘upmarket’ markets.
Since public opinion turned we have seen a wave of large, familiar chains announcing changes to their policies. One of the most recent examples is the announcement by Starbucks that it will remove plastic straws from its business globally by 2020. On the day that it announced this, its share price went up (source: Financial Times: “Starbucks jolted higher after plastic straw phase-out plan”). This will all have a knock-on effect on their supply chain. Can you imagine being a plastic straw manufacturer right now?
2. Policy changes – compliance
Businesses, cities and even countries are talking about banning single use plastics.
In April this year, the Waste and Resources Action Programme (WRAP) launched the UK Plastics Pact. At the time of writing, this pact has been signed by 60 signatories from brands, retailers, manufacturers, NGOs and producers among others. All of these have larger supply chains that will be impacted by this decision.
In addition, both the UK and the EU are considering bans on single use plastics, and other countries are already leading the way. In January this year, China stopped accepting foreign exports of plastic and paper recycling in an attempt to alleviate their own industrial pollution issues, and the result has been a global impact on waste recycling. In India, Delhi and Mumbai have both banned all disposable plastics, with a country-wide commitment to ban them by 2022.
3. Investor pressure
Beyond the traditional ‘bottom up’ customer/stakeholder pressure we are starting to see serious pressure coming from investors in more of a ‘top-down’ approach (see for example this recent article by ICSA). This pressure from investors has the advantage of forcing CFOs, boards and other leadership team members to take sustainability issues more seriously. This is no longer the realm of the beleaguered sustainability professional in the organisation – instead this is starting to integrate sustainable thinking into commercial, financial and technical decisions. The risks, if not taken seriously, can be significant as investors start to get their houses in order.
Many stock markets now have a requirement for some form of sustainability reporting in order to even be listed – this is driven by investors and will impact the supply chains of those listed companies as they strive to improve their share prices and gain/develop a competitive advantage in the market.
4. New product opportunities
This brings me on to the opportunities available in this area. Large organisations are increasingly launching sustainable products and initiatives. Recent examples include Nike andH&M but there are hundreds of others that focus on reducing resource consumption and minimising waste production, as well as sustainable sourcing. Any of the large, familiar brands have a lot of information on this (Unilever, M&S, Ikea – a quick internet search will provide you with a huge list of sustainability initiatives being undertaken by the large listed corporates).
This provides a perfect opportunities for businesses to develop new products, offerings and technology to fill this demand. Whether you operate on the supply and demand concept or the ‘build it and they will come’ concept, there is certainly an opportunity for business growth in this market which is, frankly, desperate for their suppliers to help them in finding solutions to these challenges.
5. New business opportunities
In addition to new products and offerings there are also a significant number of new businesses which are springing up to take advantage of this gap in the market – and it is definitely still a gap. I just found an article the other day setting out some of the types of sustainable businesses that people can think about starting up (source: Business news daily). New ideas are definitely welcome in this era of sustainability drives, and there are any number of areas in the supply chain where new businesses can come in to fill the knowledge gaps.
Fashionable or not, it is clear that business is changing its opinion of sustainability. This isn’t an area that organisations can continue to ignore and expect to continue operating in the long term. There are too many external drivers for change now.
The good news is that there are a lot of indicators in the public domain which can help you set your strategy to respond to forthcoming policy and reputational drivers. The great news is that if you position yourself in the right way you will be able to take advantage of new business opportunities as a result of the changes in the market.