Sustainability - An Emerging Megatrend
20 May 2014
Around the world, consumer-driven sustainability is becoming increasing important, especially in the high-value premium markets most valued by exporters. International retail chains are now moving to become more sustainable businesses in order to meet growing expectations and demand from their consumers. Small boutique stores which once set themselves apart from larger retail chains, by offering such niche items as organic and carbon-zero certified products, are no longer the niche they once were. International retail giants such as WalMart, Sainsbury's, Waitrose, Tesco and others are now investing millions of dollars in sustainable initiatives.
So what does this mean for suppliers? Writing in the Harvard Business Review in 2010, David Lubin and Daniel Esty commented that “... sustainability is an emerging business megatrend, like electrification and mass production, that will profoundly affect companies’ competitiveness and even their survival.” They added that “... best practices will emerge, and sustainability scorecards will allow companies to track cost and risk reduction as well as evaluate value-creation activities.”
So, in addition to examining the lighting systems in their buildings and the management of waste and recyclables, these retail powerhouses are now setting sustainability standards for their suppliers, a move that stands to have a dramatic effect on the sustainability of not just the stores but the value chain as a whole. Suppliers are now faced with two options: meet the requirements or attempt to sell their goods elsewhere.
Increasingly suppliers are being faced with a need to quantify their eco-credentials, including water and carbon footprints, biodiversity initiatives, energy use and waste management practices, to demonstrate the sustainability of their supply chain production system. While this comes as a shock to some, a quick look overseas and it becomes apparent that sustainability is not ‘just a fad’.
In the UK, Marks & Spencer (M&S) became one of the first major retailers to set solid challenges to themselves, and promises to their customers in term of sustainable business. In 2007 the company launched ‘Plan A’, a framework ‘committing to change 100 things over five years – because we’ve only got one world and time is running out’. Their goal: to become the world’s most sustainable major retailer by 2015.
In the company’s 2012 Business Report, their CEO Marc Bolland announced “We launched Plan A in 2007 to address three global challenges: increasing pressure on our planet’s finite resources, rising social inequality, and the need for healthier, more sustainable lifestyles in the developed world”.
“Five years on, the evidence for change is even stronger. We can now also demonstrate a strong business case for sustainability, with £185m in net benefits from Plan A made available to be reinvested back into our business over the last five years”.
M&S and other retailers are now seeing the benefit of sustainable business practices and setting the benchmark for premium suppliers. But asking for evidence of a product’s environmental impact is one thing; quantifying complex supply chains and dynamic systems to provide an answer is quite another.
New areas of science have now emerged to tackle this precise challenge. At Plant & Food Research, we are now working to evaluate the sustainability credentials of major horticultural industries, and delivering the information required to meet ecoverification standards. By applying an in-depth understanding of soil and environmental sciences, plus life-cycle assessment methods, the Production Footprints team are developing new systems and mathematical models to measure and evaluate natural capital stocks, and advising companies in the growing area of ecosystem services research.
‘Ecosystem services’ is a collective term used to describe the multitude of resources and processes that are supplied by natural ecosystems. The concept is then grouped into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual and recreational benefits.
Our environmental specialists are involved in research to best quantify ‘ecosystem services’ as well as a wide range of other life-cycle assessment initiatives designed to quantify environmental impacts and optimise crop production systems, including those for apples, kiwifruit, berryfruits and wine.
Sustainability might have once offered companies a point-of-difference in the market and formed part of a brand’s unique selling proposition, but times have changed. Sustainability is now more than ever an expectation of consumers, particularly regarding the food they eat. Whatever retailers choose to do, international markets are already demanding evidence from suppliers, and sophisticated certification schemes are becoming adopted. Unlike early adopters, sustainable messaging is no longer enough. Today and certainly looking into the future, quantitative evidence is needed to keep products on the front shelves of the world’s premium markets. A challenge not easily met, and not quickly completed, but one that looks to set to continue.
Communications Manager, Corporate Communications,
Plant & Food Research Mt Albert,
120 Mt Albert Road, Sandringham
Auckland, 1025, New Zealand
Telephone: +64-9-925 8652
Mobile: +64-21-2419 417