Consumers are demanding sustainable business practices

Business has a key role to play in meeting global carbon agreements through sustainable practices throughout the entire value chain. Climate change is not just a risk for the energy industry or heavy polluters but consumer goods industries as well.

" Sustainability is top of the agenda for consumer goods companies as customer attitudes evolve."
Sarah Boumphrey, Global Lead of Economies & Consumers, Euromonitor International

Despite this, research shows consumers do not have much faith in big business playing their role.

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How can companies convince the public their intentions are genuine? There are three basic principles to consider.

• Resource efficiency

Resource efficiency is a win-win scenario. Companies can cut costs and engage with consumers by improving their supply chain. Of all the options available for companies this should be the first priority.

A recent World Economic Forum report found the most energy-intensive part of the process of making crisps was in the drying of raw potatoes, which were soaked with water by farmers due to a price structure based on weight. Walkers Crisps changed their price structure to volume-based, removing the incentive to soak the potatoes.

• Recycling

Recycling can help companies to cut costs and reduce risk – by securing supplies of inputs – and building reputation amongst end consumers. Recycling effectively turns waste into a resource.

In 2011, Sony developed Sustainable-Oriented Recycled Plastic, which contains more than 99 per cent recycled materials and is made with waste generated both within and outside Sony sites.

• Substitution

Substitution is another area in which companies can look to find cost savings and improve efficiency. Switching a material for an alternative which is more readily available or utilising technology can bring reductions in weight, price, and risk and improve a product’s functionality. Electrical goods are a good example.

A NEW STRATEGIC DIRECTION

The push for a sustainable future should also lead to a review of wider strategy. Embracing sustainability at the heart of business can lead to:

• New avenues for growth

Introducing new products or services which are intrinsically greener can grow a customer base. Ricoh, a provider of managed document services has developed label where previously leased printers and copiers are inspected, renewed and updated before being sold as remanufactured products as GreenLine products.

• New business models

Engaging with the sharing economy is an obvious choice. Products ideally suited to sharing include those only used occasionally, those that might only be used once and those that are only needed for a specific time.

TO THE CORE

In today’s age, sustainability should be wrapped into everything a business does. With consumers demanding more transparency and trust an increasingly fragile yet valuable commodity, consumer goods companies cannot afford to transgress. The cost-saving and profit-enhancing results of running a sustainable business should speak for themselves.

Sarah Boumphrey is Global Lead of Economies and Consumers at Euromonitor International

You can read Euromonitor International’s full article here.

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