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Sustainability: The New Market Rule

Sustainability: The New Market Rule

    There was a time when things lasted longer. Buying an appliance was practically a lifetime purchase. Especially because, if it broke, you could just take it for repair. Returnable packaging was the rule, not the exception. Since everything was very expensive, people had the habit of researching a lot before buying. In an era when sustainability was not even considered, industries invested in quality, durable, and resilient products.


    In California, there is a light bulb that has been on since 1901, in an old fire station. But products like this quickly lost their place in the market. Ironically, things that break sell more. The practice of “planned obsolescence” – the intentional reduction of a product's lifespan – emerged in the early 19th century. A more critical analysis of this market strategy can be seen in the documentary “The light bulb conspiracy” (http://www.imdb.com/title/tt1825163/), which tells how many products became almost disposable and how much companies were profiting from this practice. With the economy booming, no one was willing to notice the environmental problems that were accumulating.


    It took many natural disasters and the imminent threat of global warming for us to finally start questioning our new consumer habits. And, until recently, it was necessary to create numerous regulatory measures to ensure that the industry adapted; today, sustainability is becoming the new market rule. The pressure comes from all sides: consumers, NGOs, investors, and competitors. Gradually, entrepreneurs are discovering that, nowadays, more sustainable products and services sell, and a lot!


    Natura has adopted a development model focused on sustainability since its creation in 1969. All of its product lines carry some component of sustainability, whether in their formulation¹ or in their packaging². In 2000, the Ekos line was launched, which is based on the sustainable use of Brazil's biodiversity and the sharing of traditional knowledge. Sustainability has also served as inspiration for many young companies that have recently entered the market. The American company Terracycle (http://www.terracycle.net), founded in 2001, transforms recyclable waste into bags, backpacks, and notebooks. In the same year, BloomEnergy (http://www.bloomenergy.com) emerged, using NASA technology to generate clean energy through small generators, serving people living in very remote areas. By facing social and environmental challenges, these companies found solutions that also generated economic growth.


    Most companies do not have such a green heritage, and entering the niche of environmentally correct and socially fair requires significant internal changes. Walmart, for example, aims to use only renewable energy. To achieve this, it has installed green roofs and modernized its fleet by acquiring more efficient vehicles. To be able to offer more eco-friendly products, Walmart carefully selects new suppliers (like Terracycle) and pressures old ones to seek solutions.


    It is important to remember that sustainability is not a one-size-fits-all recipe. Each case is unique, and there are countless ways to adapt. But some tools can be very useful. Certifications, such as ISO 14.001, do not guarantee 100% sustainable production, but they are a good start. The Global Reporting Initiative (https://www.globalreporting.org) is a non-profit organization that created a series of guidelines to assist companies in their pursuit of sustainability. In Brazil, the Akatu Institute, in partnership with the Ethos Institute, created a sustainability scale based on the principles of Corporate Social Responsibility. All these indicators help companies to have a more holistic view. By analyzing the system as a whole, it becomes easier to identify problems and find solutions.


    Little by little, the philosophy of the past is being revived, that things should be good and durable or “of quality.” However, today the term quality, which in the past had durability as its main attribute, has its meaning expanded to include concerns for cleaner production: renewable raw materials, energy efficiency, low toxicity. Durability, in this new global context, means not only economic gains but also environmental and social gains. The new business models imposed by sustainability challenge us to seek solutions while being rich sources of inspiration for generating innovation.


¹ Use of plant-based raw materials (in varying percentages); certification of organic or forest origin; reduction of water use and greenhouse gas emissions; use of organic alcohol; etc.


² Use of recycled raw materials; application of plant-based polymers; creation of recyclable packaging; etc.


 


Bibliography:


Akatu Institute for conscious consumption: http://www.akatu.org.br/


PATEL, H. (2010) The era of green innovation begins. Revista Amanhã, p. 39-59. Available at: http://www.amanha.com.br/sustentabilidade-internas/58-sustentabilidade-1/662-comeca-a-era-da-inovacao-verde


UNRUH, G. & ETTENSON R. (2010) Growing green – three smart paths to developing sustainable products. Harvard Business Review, p. 94-100.