Source: UPSide blog
Every year, sustainability professionals come together to discuss trends and expectations for the future. The meetings, like Net Impact and BSR, buzz with heady discussions about the world’s social and environmental issues: poverty, human trafficking, child labor, transparency, and climate change.
When we get home, business-based attendees have to sort through the aspirational talk to determine which social and environmental issues should guide corporate sustainability programs. Relevancy isn’t always direct or obvious but it’s critical for companies who want to remain leaders in sustainability.
Based on my review, here are the business-relevant trends worth watching in 2013:
1. Managing Consumption
Increasingly, high-consumption behavior is raising the eyebrows of consumers who reject the idea that “more” is better. Overflowing landfills, closets, and credit card balances are creating a generation of repentant spenders who proudly shop at thrift stores and websites that feature “gently used” items. The implication is huge for consumer goods companies whose business plans are built on seasonal buying patterns and whose growth is based on the latest trends. To counter, responsive apparel retailers are launching “takeback” programs to retrieve and recycle used items, creating in-store collection sites as a way to get shoppers back and feed the desire to enact “reduce, recycle and reuse” principles.
2. Consumer Engagement
Consumer engagement is increasingly driving sustainability programs, expanding feedback beyond shareholder and employee engagement. Ahead-of-the-curve companies are tapping into consumer preferences, commentary, and emotional connections to elevate their sustainability program’s impact. For example, consumer surveys on sustainability may drive charitable giving, product labeling or research and development investments.
Credible companies are leveraging sustainability principles into their long-term strategic plans. Others have adopted the mantle of sustainability as a way to elevate their brand for the short term – a tactic that may backfire with customers seeking companies with a true commitment to environmental and social leadership. Red flags for “short-term-ism” include a lack of transparent multi-year metrics and goals, a “one-off” approach to sustainability focused on a single program, and erratic sustainability reporting.
4. The Conjunction of Environmentalism and Social Justice
Until recently, climate change was largely connected with weather changes and scientific debate. Now, as climate change has been more readily accepted as a reality, the discussion is focusing on the implications of climate change on society: how climate change affects access to food and water and economic development, and how increasing resources will be required to cope with extreme weather and its resulting devastation.
Public health issues and food shortages arising from climate change are most likely to affect the world’s poor, leading to social unrest and economic stress. Companies need to evaluate how their resources may be tapped for relief.
5. Responsible Supply Chains
It’s no longer enough to frame sustainability programs by owned operations.
Recent headlines about working conditions at manufacturing plants have forced companies to seriously examine their supply chain partners. Beyond supplier compliance programs and on-site audits, companies are being asked to provide educational opportunities, housing and workplace safety enhancements to these employees. The content of product components and/or ingredients is also under scrutiny for health, safety and environmental integrity. Transparency about sourcing, transporting, and processing is now rising as a critical business issue to protect the long-term reputation of companies increasingly reliant on outsourcing and international suppliers
6. Women as Economic Drivers
Women continue to be the focus of many social investment programs.The reasons are well researched: Beyond being a critical family buyer, women are more likely to seek educational opportunities, to save money for their children’s future, and are the fastest-growing group of entrepreneurs. These trends are global, extending from urban centers in the United States to villages in emerging economies. Women also tend to be more concerned about environmental issues. So women’s causes and charities are good economic choices for attention.
7. More Rigorous and Ubiquitous Reporting Standards
More standardized and rigorous reporting standards are currently on the books or planned. For example: the Global Reporting Initiative plans to issue new guidelines in 2013. The U.S. Securities and Exchange Commission has been adding sustainability topics to their reporting requirements. The Carbon Disclosure Project recently added water as a reporting element. Last year, NASDAQ joined stock exchanges in Sao Paulo, Johannesburg, Istanbul and Cairo requiring sustainability content in their financial reporting. Even governments are adding reporting requirements. Companies who have avoided comprehensive sustainability reporting will find themselves far behind when new guidelines and requirements emerge.
In summary, marketplace expectations have moved sustainability into the category of “business as usual”, meaning that to stay ahead of the pack, leaders will need to push their ambitions further, faster and more aggressively in the coming years.