Big Brands Embrace Corporate Sustainability

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Big brands join with corporate sustainability and succeed with real consequences for the environment.
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"Eco-Business” by Peter Dauvergne and Jane Lister discusses how big brands have come to grasp the importance of corporate sustainability.

In Eco-Business (MIT Press, 2013), Peter Dauvergne and Jane Lister reveal big-brand companies that seem to be making commitments that go beyond the usual “greenwashing” efforts undertaken largely for public relations purposes. In this excerpt from the book, the authors examine this new embrace of corporate sustainability, its actual accomplishments, and the consequences for the environment.

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Corporate Sustainability and Big Brands

Are advocacy and state partners complicit in the takeover of sustainability by the big brands? The answer is surely “yes,” but it is also understandable why so many groups seeking change are now partnering with these powerful players. Eco-business does seem to be both scaling up and gaining momentum. Specialized business sustainability associations are forming and strengthening. Mainstream industry associations are also increasingly adopting corporate sustainability as strategy, forming working groups on water, biodiversity, climate change, and sustainable consumption, among other things. A few industry associations are even lobbying governments for stricter environmental regulations to level the playing field, protect new comparative advantages of members, and create greater certainty. As the analysis in this book reveals, however, at best the scaling up and mainstreaming of eco-business can only ever take us a short way toward genuine sustainability. And any partner should stay alert to its intrinsic limits and dangers.

The Limits of Eco-Business

Great care must be taken when evaluating the ecological or social value of eco-business. Consequences are multi-dimensional and uneven, and any gains may be temporary. Eco-business has not been, and will never be, a simple linear process of constant gains. The process will be messy and complex, with even small changes to products and processes requiring great efforts with often unanticipated setbacks. The financial investments, though measurable and real, are also a tiny fraction of a company’s revenue turnover or total profits. Company forums and consortia to share sustainability ideas and cooperate on standards may even function as a veil for collusion. We saw this in 2011 with the European Commission’s fine of Unilever and Procter & Gamble for price setting when introducing their “eco-friendly” line of concentrated laundry detergent (in response to Walmart’s packaging demands).

Companies are achieving some eco-business targets and falling short on others. Walmart reached only half of its carbon-reduction target for 2010. Starbucks has so far failed to meet its energy-reduction and recycling targets. IKEA fell short of its 2006 commitment to reach 30 percent sustainable sourcing by 2010. Its proportion of certified chipboard and fiberboard was even further off the mark, at just 10 percent. All are promising to do better. IKEA’s reason for the failure to reach its target, however, is revealing of the limits of eco-business: according to IKEA’s global forestry manager, it was impossible to source sustainable wood in a way to keep prices low enough to sustain the company’s rapid growth.

The total environmental impacts of consumption, moreover, continue to increase even as the per-unit energy, material, water, and waste impacts of producing, consuming, and disposing of some consumer goods are declining.24 The same big brands trumpeting sustainability programs are aggressively marketing “new” products to billions of “new” consumers: diapers, soft drinks, plastic razors, flip-flops, bottled water—the list could go on and on. According to Stacy Mitchell, the author of BigBox Swindle, “Walmart is accelerating the cycle of consumption, speeding up how fast products move from factory to shelf to house to landfill. Even if Walmart does reduce the resources used to make a T-shirt or a television set, those gains will be more than outstripped by growth in the number of T-shirts and TVs we’re consuming. It’s one step forward and three steps back. . . .”

Eco-business may even accelerate a decline in global environmental conditions as the same processes that are enhancing the efficiency and control of business push up consumption. The ultimate goal of eco-business is more consumption of brands and discount goods, and big brands are investing savings to expand and grow—especially in developing markets. “Sustainability is a business strategy, not a charitable giving strategy,” explains Beth Keck, Walmart’s senior director of sustainability. “We’re thinking about sustainability from the customer’s point of view. We don’t want customers to have to choose between products that are sustainable or products that are affordable.”26 Absolute environmental gains are an incidental outcome rather than the goal of eco-business. It doesn’t aim to curtail consumption to stop ecological loss; it helps to ensure that any loss doesn’t impede more goods and more growth.

Eco-business is not about transforming the world economy that underpins today’s global environmental crisis. It is about advancing the growth of ever-larger businesses. It assumes—indeed it needs—increasing production and consumption for its dynamism and rationale. Scaling back consumerism or eliminating brands or products with high social costs are not part of what eco-business is aiming to change. Consumers are the ultimate source of brand power: more consumers, buying more brands, creates more power. Eco-business cannot be divorced from lobbying efforts to lower corporate taxes. Nor is it possible to separate it from advertising efforts to convince consumers to want—and to buy—ever more stuff. The same big-brand company investing millions in sustainability is weaving brand messaging into children’s TV shows, blockbuster movies, and prime-time sitcoms. And the power of brands over popular culture continues to grow, with entire films and TV dramas now made for the purpose of marketing brands. John Wells, the producer of The West Wing, ER, and Third Watch, lamented this in 2011: “The day isn’t far off [when] brands will have more power than writers.”

Big-brand companies are the backbone of a world retail economy that is mass-producing cheap consumer goods designed for rapid obsolescence and turnover. Maintaining high sales for these goods relies on shifting the environmental and social costs of production and consumption onto less powerful and distant regions, ecosystems, and future generations. Some so-called gains from eco-business, such as replacing products or processes, may also cast equally, if not more damaging, ecological shadows of consumption.28 The genius of Walmart’s founder, Sam Walton, was his pursuit of ever-lower costs and ever-higher sales. His goal was more warehouse-style stores and more control of low-end markets, aiming to increase long-term total profits rather than maximize short-term profit margins. In theory, this strategy doesn’t require more consumption worldwide, just more sales and market control for Walmart. Yet in practice it does tend to stimulate wasteful and excessive consumption, as options rise, as prices fall, and as more and more shoppers look, in Walmart’s words, to “save money” and “live better.”

Turning sustainability into eco-business, moreover, is altering the nature of environmentalism, increasing its power to accelerate some forms of change, but limiting what is on the table to question, challenge, and alter. Sustainability as an idea can be radical: not just calling for changes in the rules of the game (i.e., market dynamics), but also to the game itself (i.e., the global economy). It can, for instance, challenge individuals to reduce consumption. It can challenge businesses to stop certain practices, eliminate certain products, and produce more durable goods. And it can challenge public and private organizations to operate systems within ecological and social principles, and not just within economic ones. The big brands’ takeover of sustainability, however, is shifting the purpose and goal of sustainability governance toward the need to create business value as an outcome of pursuing sustainability. And the levers of change within resulting governance mechanisms are increasingly under the control of large private organizations. States and NGOs can advance some causes by stepping strategically on these levers. But eco-business on its own cannot—and never will—alter the underlying logic of accelerating consumerism and unequal globalization behind the increasing power of big brands.

For some, this is the full story, and it signals a future with even less hope. For them, big brands will never be part of any sustainability solution. For at least some of those working on trying to implement sustainability, however, the big brands’ takeover of sustainability is a still-unfolding tale that needs more actors to join for any hope of creating a more sustainable pathway forward.

Reprinted with permission from Eco-Business: A Big-Brand Takeover of Sustainability by Peter Dauvergne and Jane Lister and published by MIT Press, 2013. Buy this book from our store:Eco-Business.