BSR Conference 2012: Fast Forward / October 23-26 / New York

Sustainable Consumption: Exploration and Opportunities

Leadership in Action Session / October 25, 2012

Speakers

  • Steve Howard, Chief Sustainability Officer, IKEA Group
  • Aron Cramer, President and CEO, BSR
  • Randall Krantz, Director, Head of Sustainability Initiative, World Economic Forum (Moderator)

Highlights

  • Sustainable consumption will require changes that reduce waste, move consumption from products to experiences, and decouple consumption from growth.
  • IKEA’s new “People and Planet Positive” sustainability strategy focuses on sustainability at home, in IKEA operations, and across the value chain.
  • BSR sees opportunities for new business models, especially from emerging markets, waste reduction in developed countries, and marketing that highlights better living from sustainability.

Memorable Quotes

“We want sustainability not to be a luxury good, not to be a green premium, but to be affordable for everyone.” —Steve Howard, IKEA

“Three billion people are coming out of poverty, and as a business we have to do our best to make the needs and dreams of people as sustainable as possible.” —Steve Howard, IKEA

“We are hard-wired to consume. For most of human history we have lived in a period of scarcity … there is part of this which is natural for humans.” - Aron Cramer, BSR

Overview

To launch the panel, Krantz asked the audience, “How many of you are sustainable consumers? How many of you know what sustainable consumption looks like?” Krantz explained that his definition of sustainable consumption includes environmental, social, and economic sustainability and was influenced by Cramer.

Krantz explained that he thinks about sustainable consumption on three levels: micro, consumer, and macro. From the micro level, he says decoupling consumption from environmental impact requires technical fixes such as efficiency and waste reduction. The consumer level involves shifting consumption from products to experiences. Finally, the macro level requires decoupling consumption from growth. Krantz then asked Howard and Cramer what sustainable consumption means to them.

Howard began with an overview of IKEA’s recently launched sustainability platform, “People and Planet Positive.” The program focuses on creating a more sustainable life at home, making the company’s operations more sustainable, and helping build a better life for people and communities across the company’s value chain. Howard explained that IKEA’s strategy includes selling the greenest products at the lowest price possible.

Howard pointed out that IKEA will sell only LED light bulbs by 2016. The bulbs, which last 20 years and reduce energy waste, provide better products for consumers and help them save money, Howard said. IKEA is using the bulbs in its stores as part of an operational sustainability push that also includes sourcing as much as 100 percent renewable energy by 2020 and aspirational goals to maximize the amount of sustainably sourced cotton and wood by 2020. Their value chain and community sustainability elements include auditors working with suppliers to improve working conditions.

For Cramer, the language of sustainable consumption itself is problematic. Sustainable consumption was the centerpiece of the BSR Conference three years ago, and it has been a challenge since. “Ultimately it’s about better lives that can’t be achieved with the consumption models we have today,” he said. To achieve sustainable consumption requires good marketing to help people understand their own self-interest and the common self-interest. Cramer cited Walmart’s “Save money, live better” slogan as a good example of talking about sustainable consumption.

Cramer went on to say that the consumer in emerging markets around the world and even in the United States and Europe today is different from the archetypal consumer 50 years ago in suburban America. “We have to build solutions for 21st century models and allow people’s aspirations and basic human needs to be realized,” he said. If local solutions emerge to solve local problems in emerging markets, they can be scaled by big global businesses.

Krantz asked the panelists how consumption could be decoupled from growth. Howard responded by saying that the company wants to double in size by meeting the needs and aspirations of people in a sustainable way. He pointed out that the planet has been overdrawing its resources since the 1980s and that it cannot continue for another 20 years. “I think we can have sustainable consumption, an eco-cycle world, for a world of 9 billion people. Can we do it in time?” he asked. Cramer stated that sustainable consumption is not the end but rather a means for people to lead better lives. He cited the example of meat consumption, which is increasing globally and is associated with poorer health outcomes. Health and lifestyle education can encourage consumers to eat less meat and live healthier.

Two participants asked Cramer and Howard questions about how to reduce consumption. Howard answered by describing IKEA’s work on reducing waste in the kitchen with food-storage products. “This is not an area where we need to say, ‘We need more expensive things to have a sustainable world,’” he said to discourage the notion that sustainable consumption required expensive products. He also explained how IKEA reviews its products to eliminate excess that does not provide value, such as selling scissors in packages of three for consumers who only need one pair. For Cramer, the answer comes from different business models. Although people live in affluence, we’re hardwired to consume, and it will take different types of economics to change that, he said.

Krantz closed the session by asking the panelists for their vision for sustainable consumption in 20 years. “Let’s get waste down in the West and new models in emerging markets,” Cramer said, emphasizing that reducing energy and food waste from 30 to 10 percent would have a big impact. Howard foresees a closed-loop world where everything is recycled in 2030.



Thank You, Sponsors

Executive Sponsors

Cisco Hitachi PwC Target UL Responsible Sourcing

Associate Sponsors

Anheuser-Busch InBev

Supporting Sponsors

Adobe AT&T ExxonMobil Green Mountain Coffee Roasters, Inc.

Participating Sponsors

American Express Baker & McKenzie LLP Best Buy BNY Mellon Ford Hyatt Hotels Corporation The Walt Disney Company UPS Vale

Contributing Sponsors

Chevron icix Levi Strauss & Co.

Convening Media

Bloomberg Business Week Weber Shandwick

Marketing and Media

3BL Media BEF Caixin Media Corporate Knights Globescan GreenBiz Group Inc. Hemlock Responsible-Investor Sina Stanford Social Innovation Review (SSIR) Tomorrow Partners