The best brands consider their entire value chain to create substantial change.
(Do check out my previous piece, where I argued that the Greening of Business isn't simply a marketing challenge or a compliance challenge. It is primarily an innovation challenge).
As marketers, we are complicit in 'business-as-usual' green coverups.
Lately, I’ve been spending a lot of my free time looking into climate change and specifically what businesses can do to help slow it down or more likely, prepare for what comes next. Because despite lots of positive noises we’re not doing enough to make the sort of dent we need to make.
Estimates suggest that 90% of a firm’s emissions come from consumers' use of purchased products and services. These are called Scope 3 emissions or indirect value chain emissions.
We also know that 80% of the environmental impacts of those products and services are determined in the early stages of design. These two figures tell us that sustainability is chiefly about stuff and that the impacts of products or services are pretty much designed-in (or out for that matter) from the very outset.
In India, 90% of the top 1000 listed companies are yet to crack the ESG maze despite new sustainability reporting norms kicking in this fiscal. And globally, as this excellent Bloomberg investigation finds, ESG disclosures can look a lot like green washing.
Firms are patting themselves on the back for reducing direct emissions, reducing the water stress their factories create, decreasing the power they drain from the grid, electrifying their fleets and minimising their packaging. There’s nothing wrong with any of that and we need it. But it’s just 10% of the emissions they are putting out into the world.
The best brands consider their entire value chain — from sourcing, production and distribution to usage and post-use — to create substantial change.
This is difficult for most companies. Firms have traditionally treated sustainability as part of their larger CSR or communications functions far removed from operations. But siloes aren’t the real problem here. The real problem is a lack of ambition.
What real ambition looks like
Let’s take a look at just one example, McDonald’s (since information is publicly available).
According to their CDC filing in the U.S., emissions from their offices and restaurants (Scope 1) fell from 1.5m to 0.6m tonnes of CO2 in 2019. In the US and UK they have recently launched a net zero restaurant. So far so good.
But when you include Scope 3, McDonald’s total greenhouse gas emissions for 2019 were greater than those of either Portugal or Hungary at 54m tonnes, an increase of 7% in 4 years. That’s driven by their supply chain and the 7m cattle slaughtered each year.
So McDonald’s real ambition for change has to include partnering with customers, creating a universal aspiration for plant-based burgers. The current McPlant ad campaign looks like a good step in that direction.
- What if a plant-based patty was the norm not the exception?
- What if they helped customers not collect burgers at the drive-thru in their diesel-powered SUVs?
- What if they found a way to reduce how much of over-ordered, uneaten food gets thrown in the trash?
- How might they encourage replication of the McDonald’s experience at home with leftover mayo and small spice sachets?
- How might they persuade die-hard meat fans to accept lab-cultivated beef?
- How might they increase average order value whilst reducing the frequency of meat-based purchases?
That is what real ambition looks like.
What gets measured gets done
To be fair there are good reasons why firms haven’t taken responsibility so far for their indirect emissions. First off it’s hard to calculate.
Sure, you can run an attitude survey where you’ll discover that people would like to buy more sustainably. But there’s still a big (and over-claimed) gap between what people say and what they do.
What we need is more granular reporting of Scope 1, 2 and 3 emissions mapped with industry leading models in order to analyse emissions, set goals and execute on meaningful reductions.
Thanks to resources like Sweep - which helps companies fully understand the carbon impact of their business - and Sourceful - which brings a more complete understanding of the supply chain so that companies can make better choices about sourcing products - businesses now have the ability to better measure and alter their behaviour.
Time to step-up
There's a growing sense that in the new wave of sustainability – focused on creativity, entrepreneurship, innovation and practical solutions – systems thinking, design skills and organisational change will feature heavily in our toolkit.
- Less shaping the narrative, more shaping behaviour.
- Less ‘sustainability theatre’, more testing MSP (Minimal Sustainable Product).
- Less internal focus and a lot more customer centricity.
- Less risk management, more business model innovation.
- Less reporting that reassures investors, more accurate measurement and responsibility for carbon being emitted.
We have the power to activate customers – unleashing the latent desire in all of us to reduce our carbon footprints through what we buy (or don’t buy), the choices we make and the habits we form.
Californian design professor, Nathan Shedroff, captured this well when he said: "Design is the problem as well as the solution". If environmentalism's success was in spotlighting sustainability problems to the world, the success of design will be in helping deliver solutions.
Get in touch if you want to apply Circular Design Thinking to your product, business model, service, or brand.