1 – The Case for Refocusing on Product (Rather than Corporate) Sustainability
Excerpt from the book ‘Full Product Transparency‘
1. The corporate responsibility beauty contest hasn’t taken us that far
WE ARE AT LEAST TEN YEARS ALONG the corporate sustainability journey now, so what really significant changes have we achieved?
Perhaps the business world has focused on the wrong tasks? Could it be that, despite all the carbon neutrality claims, hundreds of Global Reporting Initiative A+ reports and sustainability teams of ten or more people, companies have still not radically redesigned their core products and business models? The answer is that there has been far too much focus on companies wanting to look good, and not nearly enough attention paid to actually performing well. The beauty contest It’s in the blood of companies to compete, to strive to be better than their peers.
That has been the reason for the success of corporate sustainability, because businesses like to vie with each other to be the best in this area. But the end result of all the competition has been to encourage companies to give the impression of looking good while barely changing their ‘business as usual’ model. It’s hard to change the direction of a business, especially in the short term, but the corporate sustainability beauty contest has nonetheless been characterised by a disappointingly low level of achievement.
An entire industry has been created around this beauty contest, including thousands of labels, corporate responsibility (CR) report design agencies, boutique assurance providers, hundreds of awards with infinite categories, materiality matrix mavericks, investor questionnaires consultants, professional stakeholders looking to ‘engage’ with companies and all manner of membership organisations offering support networks for a hefty fee. Service-provider directories in the field typically feature more than 500 such organisations offering to help businesses look more virtuous than their peers – what the marketing guys call ‘differentiation’.
The problem with all this activity is that looking more virtuous doesn’t have anything to do with being more sustainable.
We in the sustainability movement need to ask ourselves honestly whether we are pushing for actual change or whether we are merely helping companies to gloss over big issues by making them compete in irrelevant contests? We offer companies the prospect of being able to make ‘100% natural’ products or to be the first company in their sector to become ‘carbon neutral’. In short, we have been tremendously innovative in coming up with fairly meaningless stuff that is easy and quick to implement, or that can deliver nice stories and marketing claims, but frighteningly ineffective at producing anything that will affect actual performance.
And astonishingly, CEOs are quite happy about their performance.
A 2010 Accenture survey of global CEOs put the last nail in the coffin of CR as it stands. It found that 81% thought sustainability issues were fully embedded into the strategy and operations of their company. Yes, FULLY EMBEDDED! It’s not a joke. It’s actually quite sad that the most senior people don’t get it.
Please someone explain to them that having a CR team reporting to public affairs with a nicely designed 150k report with some cherry-picked case studies and a set of qualitative targets plus a few quantitative targets on quick wins is not ‘fully embedded’! Fully embedded means sustainability is fully taken account of in all the products of the company. You are redesigning your products, your business models, your entire value chain. Yet there is no company in the world that has achieved this. The sustainability movement should brutally tell CEOs that making wishy- washy claims such as ‘Sustainability is part of our DNA’ is just wrong.
Seventy-two percent of CEOs in the same survey felt the strongest motivator for taking action on sustainability issues was ‘strengthening brand, trust and reputation’. Well, here we have the reason we are trapped in this rather useless beauty contest.
Prepare yourself for the next sustainability phase: Full product transparency.
Somebody needs to speak out if we are to move towards something more meaningful. We need a proper comparative benchmark, so that companies can compete on what really matters – and so that the sustainability consultancy industry can sell properly useful transformative services to these companies. This book is aimed at providing this benchmark: products instead of companies.
So the next phase in sustainability has to be truly embedded by being focused on the product. We need to understand clearly the total footprint of a product throughout its lifecycle – that must be the starting point.
There has been some focus at product level but wrongly headed: Green labels.
You may well be asking, ‘Why does it have to be this complicated to choose the most sustainable product? Can’t I just look for a product with a green label?’
It’s not surprising people look for shortcuts to help them decide. After all, few of us have the time to study every purchase we make. That’s why there have been so many people, from gurus, to NGOs, to certification sharks, to industry associations inventing so many lucrative labels that offer ‘quick assurance’ about product sustainability credentials.
But when you look carefully at how some labels are administered, you realise how flawed they are. Most are too easy to obtain, which is obvious because the easier your label is to get, the bigger your market becomes. Most labels are very narrow in scope, measuring the easiest things to measure rather than the big issues. Many lack independent certification or may even be administered by the manufacturers themselves. Many labels duplicate each other, confusing clients and obliging manufacturers to certify the same product several times. Unfortunately, some of the best marketed labels are the least robust.
Today nobody certifies whether a yoghurt or a burger is good for your health. You just get the calories and the nutrition facts and you judge.
This is what this book is arguing for: the environmental impacts of products – Full Product Transparency.