Investing in sustainability measures could ease the pain of a double dip, says Sally Uren.
Gloom. It’s everywhere at the moment. A double dip recession is on the cards, with a prolonged period of slow to no growth the best case scenario for the US and Europe. From the board room to the living room, spending is being squeezed.
Sustainability cynics will seize this as a chance to kick green issues into the long grass, claiming they are irrelevant to both the economic crisis and the cash-strapped consumer. But they couldn’t be more wrong. Now is not the time to downgrade sustainability efforts. Quite the contrary. Here are three reasons why sustainability will help any business to defy yet another dip.
First, it saves money and creates new markets. Many multinationals have wiped millions off their operating costs: Tesco reckons that carbon management has saved the company around £200 million a year. Other household brands have shown that sustainability can create value. M&S calculates that Plan A created a net benefit of £70 million to the business in the last year.
Sustainability also prompts innovation. Asking how viable a company will be in a dramatically different operating environment can generate new business models, products and services. Many businesses have concluded their current model doesn’t stand up with oil at $300/barrel (and yes, this is where we could end up). New models such as leasing could provide the consumer with what they want at a fraction of the environmental impact. Ian Cheshire, Kingfisher’s visionary CEO, is on record saying that, “instead of the goal of maximum linear growth in GDP, we should be thinking of maximum wellbeing for minimal planetary input”. B&Q, Kingfisher’s UK subsidiary, could be the first retailer to make leasing mainstream.
Finally, sustainability allows new conversations with consumers. Some classic issues, such as packaging and sourcing, are only ‘must-haves’ for a small percentage of consumers. But they are ‘nice-to-haves’ for many more. Offered a simple choice, a significant proportion will opt for the more sustainable product. Some companies are listening. In the US, Unilever has launched its Suave shampoo with the message, “Shower for less and save $100 off your utility bill”. And there’s Sainsbury’s in the UK, with the slogan, “Live well for less”. As we said back in the early 2000s – in hard times, people value values.
Sally Uren is Deputy Chief Executive at Forum for the Future.