Preventing the Next Crisis Through Sustainable Consumption

August 27, 2010
  • Aron Cramer portrait

    Aron Cramer

    President and CEO, BSR

Now that oil has stopped flowing into the Gulf of Mexico, it is time to consider the lessons that can be drawn from the Deepwater Horizon spill.

Most of our collective attention has focused on what went wrong on the rig. We’ve also spent a lot of time wondering why the federal government couldn’t summon the wherewithal to plug the leak, and even whether President Obama was angry enough.

But any honest assessment of what’s gone wrong must lead us right back to ourselves. The common thread that runs from the spill in the Gulf to the mortgage crisis to the spate of suicides at the Chinese factory producing iPods and iPads is insatiable consumer demand for more and more, at lower and lower prices. We all like inexpensive gasoline, the latest shiny electronic gadgets, and mortgages cheap enough to let us trade up to a larger house. But as we have seen this year, neither our economy nor our planet can sustain this demand.

The good news is that a more promising commercial model—one based on “sustainable consumption”—is emerging as a viable alternative. This concept, which is being embraced by corporate mainstays like Nike, Best Buy, Levi Strauss & Co., and Unilever, boils down to one simple idea: delivering more value with less stuff.

For too long, sustainability has been understood to mean only limits and restrictions. Sustainable consumption turns this idea on its head, as a way to unleash business innovation to develop products and services that deliver better living standards without further burdening our already overtaxed planet.

Some companies have already figured this out. Best Buy is investing in home information-management systems that provide not only video on demand, but also data that help you reduce your home energy bill. Nike is exploring “closed loop” manufacturing models that take most of the waste out of its athletic footwear. Levi’s is calling on customers to wash their 501s in cold water (and turn used jeans over to Goodwill), slashing the energy used to clean your clothes, which in turn saves money. eBay’s business model, which essentially recycles mountains of goods, prevents the need to devote new resources to make new products.

The beauty of sustainable consumption is that it doesn’t rely on all of us becoming better or more virtuous people. Instead, it aims to make every consumer a partner with companies in constructing an economy that uses natural resources more wisely. This will limit the need to “drill, baby, drill” in every corner of the globe, and it will quell our hunger for ever more exotic financial instruments and Chinese factories that can pump out new products faster and faster.

Sustainable consumption is also the best possible safeguard against a systemic natural resource crash that could be every bit as disruptive as the crash of the financial system in 2008. The evidence suggests that the risk of that is real. It appears that 2010 will be the hottest year on record, heightening the urgency to solve climate change. The Global Footprint Network estimates that we are using 40 percent more resources today than the planet can supply, and that this will rise to 100 percent by the middle of the next decade. If we are to maintain advances in living standards around the world, it’s clear that we need new business models, as well as innovation and new public policies, to make the leap to a genuinely sustainable economy.

It’s tempting to finger BP or Goldman Sachs as the exemplars of all that’s wrong with the economy. But let’s not debate whether things went as they should have in the Gulf or on Wall Street: They didn’t. Instead, let’s focus on the cure. The post-recession, post-oil-spill economy should embrace a vision of business—and consumption—that creates value without causing blowouts either on oil rigs or in financial systems. If we do that, we will be one step closer to an economy that can deliver prosperity for a planet with seven billion people.

Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals.

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