Circular Solutions VS Straight Solutions
Sustainability is a hot subject in the business industry. But are businesses putting their theoretical concepts into practice?
Sustainability is known by many associated phrases in the business world, including green marketing, corporate responsibility, shared value creation, and so forth. While detangling these different phrases are one thing, all of the terms ultimately pertain to sustainable development.
The term sustainable development traces back to 1987, coined by the United Nations Commission. It defines it as addressing current needs without jeopardizing the needs for the next generations. To put it simply, we can have our share but also leave behind sufficient resources for others to have their share.
Sustainable development is sometimes misrepresented with environmental protection. But the catch here is that earth will most likely outlast humans; the urgency for prudent utilization of natural resources is to save humanity, i.e. saving us from ourselves. Sustainable development also entails social equity, ensuring that excluded or disadvantaged actors (marginalized groups) have fair access to employment opportunities and are lifted out of poverty. As a result, the concept of sustainability harbors both environmental and social components. While this may appear apparent or intriguing on the bigger picture, what happens if we were to put this theory into action? It brings to light the ultimate fear— the inability to come to terms with sustainable business.
The principles of sustainable business are fairly liberal/ ethical. It is about making less bad choices to make more good choices or conducting business with a passion for the environment. Lesser waste, fewer pollutants— this is not only excellent business but also necessary for a brighter future.
Placing sustainability at the center of a business model is a way of making a concerted effort to balance the bad with more good— to reduce impacts, increase trust, and improve financial returns. But the interplay between the players and the causes is numerous, and this dynamism is a mutable goal that is difficult to achieve. The confluence of circumstances makes it extremely difficult to operationalize a long-term business. But, of course, it does not mean business organizations should abandon the efforts to address the issue or that all interpretations are equally flawed. The fact is, some interpretations are superior to others. And, here are a few examples of poor interpretations.
Marginalized Actors & Microcredit
Microcredit is small loans given to underrepresented actors to help them gain access to credit and start a business. It can be a useful tool for lifting marginalized groups out of poverty; but microcredit has also resulted in a proliferation of schemes, often flooding markets and leading farmers to a promised land that does not exist. The question is, is microcredit a curse wrapped with the skin of a blessing? Suicide cases of micro burrowers are highly evident in certain counties— farmers and peasants are robbed of their mortality owing to the pressure of loan repayments. In India, desperate defaulting micro borrowers are known to commit suicide because of the social pressure from microfinance institutions. Sri Lanka witnessed 200 burrowers' suicide between 2017-2019 owing to microloan repayment pressure. Now, is this sustainable?
Renewable Energy Sources
The world is transitioning, reducing dependence on fossil fuels and leaning more toward renewable resources. And it is a genuinely impressive commitment to sustainability and energy transition in the sphere of the automobile industry.
Electric cars are the buzzing topic and the biggest hype at the moment, but if you take a minute to think about it, there is the worry of car batteries. The process of manufacturing batteries does not come cheap; it consumes ample energy. And according to an article from Forbes, the nearest future will witness around 90% battery demand from an electric car. This raises the brows— what is the source of that energy? Is it earth-friendly? Is it made of sustainable materials? What happens when they've served their purpose? Are they renewable or recyclable?
Car batteries house toxic compounds which cause harmful exposure. While one can argue that batteries remain within the vehicle unit, can we say the same for situations where unfortunate accidents occur? As the car crashes, the batteries crack and release chemicals out in the open.
To further add to the cause, batteries also contain rare earth minerals mined in the conflict zones, which brings us to the impact of mining on the locals — the mining afflictions in the form of armed conflicts. In essence, the mining process itself also wreaks havoc on the local environment. So, is that not a threat to sustainable development?
Fair Trade Labels
A product with a fair-trade label, at first glance, validates a fantastic concept. No one would oppose the idea of paying a fair price to the marginalized actors so that they can have a better livelihood. But what about the carbon impact of transporting the products from the manufacturing country to the market country? What about the product packaging? Is it plastic or green sustainable packaging? If it is plastic, now is that something that aligns with the principles of sustainability?
Child Labor
The bad perceptions of sustainability also extend to child labor. Children should be going to school, playing, and doing things that children do. Unfortunately, that is not our reality, but rather a wishful scenario of a perfect world. It will not take much convincing to have someone agree that child labor should be prohibited. But amidst the ongoing fight to end child labor, what other steps are we taking to improve the impoverishment of the families in harsher situations that need help urgently?
While we’re focusing on the bigger picture, is it possible that we are failing to extend our concern to those who need help right now? If that is the case, are we contributing to sustainability or suppressing its principles? If we were to view child labor in this light, perhaps taking brave steps to tackle the reality is the more sustainable move of the hour?
IKEA, during the early 2000s, partnered with UNICEF to battle child labor with structural solutions. The fund program focused on basic requirements, including a good education, a healthy place to live, and a stable household income to give the children a chance for a better future. Then again, IKEA Foundation announced a $7 million campaign in collaboration with Save the Children and its partners, Pratham and Breakthrough, in 2014, to protect another 790,000 children from Indian cotton communities in Punjab, Haryana, and Rajasthan (India). Further, we see big companies like Nestle taking steps to tackle child labor by providing free access to school and empowering the farming communities to improve livelihoods through training, local savings establishments, lending societies, water supply, etc.
Sustainability Standards
Sustainability standards include eco-labels and ethical protocols that indicate the environmental/ social benefits of a product. American non-governmental organizations publish guidelines for businesses to follow. And what makes the guidelines work is that there are different standards for different locations and user groups. Because local requirements and potentials vary according to regions, aligning the specific needs and goals allows more effective guidelines.
To meet the sustainability standards, businesses establish programs in which technology is transmitted and farmers are educated to develop long-term sustainable solutions. Thanks to the eco-standards, businesses have begun to ditch the simple purchasing concept to embrace the notion of acquiring services. Traditionally, businesses would simply buy from the lowest bidder. As a result, they are enticed to selling subpar items.
But in the new system, things work differently. The business approaches are now driven by economic development methods that benefit businesses, society, and the environment as a whole. Say, a long-term partnership with a supplier— the supplier will not simply sell their products to the partner company. Instead, they will design products in environmentally friendly packaging such as biodegradable bulk muslin bags and reusable custom makeup bags, and supply them for a specific period of years or per the contract term. As a result, the supplier is motivated to use high-quality materials and also adhere to sustainability standards. This signals that the economy is moving away from a system of often purchasing, consuming, and disposing materials to one in which we close the loop and adopt the measure of reusing resources over abusing.
What Are Some Essential Principles We Can Use To Implement More Sustainable Practices?
Rather than focusing on a single issue, we must consider the challenges as a whole. We need to look at the direct and indirect impacts of sustainability— consider not only the immediate effect but also the long-run outcomes. We need to contextualize the current practices and move away from band-aid solutions to more interpreted solutions that meet the demands of local groups and regions. We must ensure that the immediate benefits for businesses and consumers harmonize with the greater good in the long run that all of us value. This means everyone should consider circular solutions over one-size-fits-all solutions be it the government, businesses, or consumers.
Conclusion
It is reasonable to assert that sustainable business will continue to face challenges to a certain extent, given the different values, interests, and incomplete grasp of reality. We can, however, move ahead provided we follow the principles of recognizing the long-term impacts, reinterpreting solutions, and synchronizing incentives.
Sustainable business is not about the correct definition. It is also not about noble intentions or disastrous methods, but rather about working toward more efficient approaches on a regional and global scale. This will undoubtedly be a challenge, but a very necessary and intriguing adventure that requires the contribution of every global citizen— are we willing to give ourselves a chance to save the environment, and in turn, save humanity?
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