Responsible Consumption: Stakeholder Dialogue, United Kingdom

Participants :

Bill Vorley, IIED Clare Lissaman, Rugmark UK Merav Shub, Sustain Trewin Restorick, Global Action Plan UK David Croft, Co-op Retail Tom MacMillan, Food Ethics Council

John Arnold, Fairtrade Foundation Katie Stafford, Marks and Spencer Fran Monks, Shell International Neil Hornsby, Sustainable Development Commission Laurie Michaelis (facilitator) Linda Batten (facilitator)

Introduction
Researchers in five European Union countries are developing case studies on initiatives for the retailing of responsible products, with the aim making recommendations to the European Commission on policies to support best practice.
Four case studies have been prepared in each of the five countries: Belgium, Denmark, Germany, Italy and the UK. In some of the countries, the research has been followed by multistakeholder dialogue to help identify best practice and develop the policy recommendations.
The UK dialogue took place in Oxford on 11 June 2003. Invitees included representatives of retailers, consumer products companies, NGOs, government and research organisations. The meeting sought to address responsible retailing in the context of national and international goals for sustainable consumption and production, bearing in mind that the UK government is currently preparing a new strategy for production and consumption as part of its follow-up to the Johannesburg Summit.
In four sessions through the day, we first explored the social and environmental values that are the basis of our concerns about sustainability; we shared a little about our visions for a sustainable world; we went on to discuss some specific initiatives for responsible retailing and sustainable consumption, asking what works and why; and finally we produced a tentative list of recommendations for action by governments, retailers and others.

Starting points

We recognised that developing a vision and strategy for sustainable production and consumption would depend on recognising the validity of different starting points and emphases within the sustainable development agenda.
As well as working for a variety of types of organisation, participants’ concerns with sustainable development started from different places. A large proportion had studied geography at university although the group included people with training in agricultural economics, ecology, chemistry, physics, energy studies, Chinese, and environmental studies. Some had been influenced by learning about the environmental crises or challenges surrounding rainforests, nuclear power and other issues. Others had been affected by first-hand experiences of environmental problems or poverty in other parts of the world. Several started from a concern about justice – in particular the balance between corporate power and individual rights and empowerment.
Participants felt that a practical dimension was important in their involvement in issues of sustainability. Several mentioned keeping an allotment or cycling wherever possible.

Visions for a sustainable world

Background

Many attempts have been made to set out visions, scenarios and specific criteria for a sustainable world. Most seek to address two fundamental problems in society at present: global trends in environmental damage and resource use; and growing inequity between north and south, and within countries.
One particularly influential idea – perhaps because of its simplicity – is “Factor 10”. The Factor 10 Club, a group of prominent environmental experts, declared in 1994 that industrialised countries need to improve the resource efficiency of their economies by a factor of ten over the next 30 to 50 years. This goal had its origins in analysis of CO2 emission scenarios leading to stabilisation of concentrations in the atmosphere. Stabilisation at 450 ppmv by 2100 would imply a halving of global CO2 emissions by 2050. Industrialised countries would need to achieve a much greater reduction to allow for increasing emissions in developing countries.
Ecological footprint studies offer a similar message. The land required to sustain the lifestyle of citizens in industrialised countries amounts to about 7.4 ha per person, compared 1.7 ha for those in developing countries. The global availability of productive land, even setting aside quite minimal amounts to maintain habitats and biodiversity, is below 2 ha/capita. Hence, industrialised countries need to reduce their resource use by a factor of four at least.
Technological change, and improvements in products and services, can deliver some of the reduction in resource use but historical analysis of resource productivity in a variety of countries and sectors shows that there is no precedent for the sustained, economy-wide efficiency improvements implied by “Factor 10”. Consumption growth is likely to outweigh improvements in efficiency. Hence, some change from current trends in lifestyles and consumption patterns will be required.
Similarly, the marketing of responsible products can empower some people and achieve improvements in equity in certain situations. But at the moment, the successes are outweighed by the growth in consumption of products and services produced without concern for the needs of workers and communities. A more widespread change in practices will require a shift in the consumer mindset.
There are additional concerns about the unsustainability of current consumption trends. In particular, research shows that growing consumption in the industrialised countries is not making people any more happy or satisfied. And some of our consumption expectations are contributing to international conflict with, for example, alleged links between the recent war in Iraq and western demand for oil.
Three areas of our lifestyles pose particular concerns in terms of both environmental damage and inequity: food, transport and housing. Most of the attention to responsible products has focused on the first of these.
Efforts to develop the market for ethical products and services have had to address the multiplicity of cultures of consumption. In the UK, a recent survey by MORI for the Co-operative Bank found five clusters of consumer culture. The clusters were described as:

	1. Do what I can” (49% of sample). This largest segment is close to the average on most indicators although older than the other groups. They are concerned about environmental and social issues but their ethical concerns carry less weight in their purchase decisions than service, convenience and branding.
	2. “Look after my own” (22%). These consumers are mostly young, single, on low incomes, and tabloid readers. They are the least concerned with social and environmental issues.
	3. “Conscientious consumers” (18%) are a higher-income group, evenly split between broadsheet and tabloid readers, and between Conservative and Labour voters. Their purchase choices are motivated primarily by quality but also strongly by social and environmental issues.
	4. The “Brand Generation” (6%) are the youngest group, mostly tabloid readers, and the group most concerned with their peer group, and least likely to view newspapers as a source of information. As the label suggests, they are the group most likely to pay attention to branding in their product choices, but their primary concern is product quality. They are also very concerned with, and likely to talk to their friends about, social and environmental issues.
	5. “Global watchdogs” (5%) are the hard core ethical consumers. They are the second oldest group, the highest income group, and include the highest proportion of broadsheet readers. They are least likely to cite television and the most likely to mention charities or other organisations as sources of information. Acknowledging the diversity in our values and priorities is a crucial precursor to making progress towards any kind of shared vision and strategy for sustainability.

Acknowledging the diversity in our values and priorities is a crucial precursor to making progress towards any kind of shared vision and strategy for sustainability.

Broad themes in our visions

In our meeting, we started exploring our visions with a brainstorm: what were the important features for us of a sustainable world? The results were as follows.

Features of a sustainable world: brainstorm

Living like “Eastenders” (strong local economy, community) Fewer people Understanding Better sharing of resources and resource wealth No wars No borders Taking care of the long-term Less stuff in our lives (material & busyness)

More time for people Less travel Less travel for things Bikes not cars Looking out for each other Less fear Cities that work Responsible travel Balance market, people and state More social time

Science and technology working for society Respect for wisdom of marginalised people, including the elderly Respect and equality Happiness Meaningful work Meaningful unemployment Responsible media Closing the loop Environmental justice Trade justice

We then worked individually and in pairs to develop a more detailed view of our own visions, and to explore which aspects were shared, and where we differed. On the whole, we found that participants had a shared view of the end-point, of the kind of world that they would like to live in, but they differed in the aspects of the vision that they emphasised, and in their views of the pathway to achieve it.

In discussion, we developed our visions in more depth. Most of the emphasis was on the social dimension of sustainability. Participants talked about world where people matter; with a more vibrant public sphere; with more emphasis on the local – local community, local production and consumption; where products are created that meet real needs; where people have more time; and with a shift in emphasis from consumption to citizenship. Some participants also talked about closing the loop; taking care of ecosystems for their own sake, not just because they serve human needs.

Addressing tensions
Much of the discussion was about the need to balance environmental and social goals with individual needs and priorities. We need to live in safety, with a reasonable income, and challenging and rewarding work, but we need a shift in culture, and in the options that are economically and technically available to us, to make the sustainable option the natural one.
Producing and consuming are important functions for us. We like buying and having things. We also have a need to produce, to be creative. But sustainability would mean that we wouldn’t do these things in exploitative ways.

Participants wondered what would be needed for people to choose a more sustainable lifestyle. Choice depends to a large extent on time and economic means. Being able to cycle or walk to work, for example, depends on being able to afford the housing and having the time to spend. There are many other influences – is it safe to cycle? does the state of the environment make the walk a pleasant one?

Different pathways
Some participants started from a concrete picture of an ideal lifestyle, others from a more conceptual view of social and environmental justice. Some emphasised a shift in cultural values to place more emphasis real sources of happiness (such as community, family life and meaningful work). Changing the culture of consumption depends on addressing the origins of our values, which are shaped from a very early age, whether by teachers, parents or friends. Education plays a central role in learning to think freely about our choices.

Others felt that a shift in economic incentives would be needed to get people to change their behaviour. We must “get the prices right” by internalising environmental and social costs. The system needs to change so that self-interest is aligned with sustainable ways of living.

There were some very specific differences in our visions – for example, how much air travel would there be in a sustainable world? For some of us, travel is very important for our enjoyment of life. Others felt that we should be able to meet our needs locally, or have enough time to travel by slower surface modes.

Although some participants emphasised the need for a reduction in the power of multinationals, further discussion brought out the point that none of the major players in society feels in control. Major corporations, governments and the media all feel that they are responding to the public as consumers, constituencies or audiences. Nevertheless, they are continually engaged in a struggle for power, whether through market share, control of the supply chain, winning votes, or increasing audience ratings.
This brought us back to the issue of citizenship, the need for dialogue, and the role of community and multi-stakeholder processes in conscious development of shared values and goals.

Exploring what works
Our discussion turned to concrete examples of initiatives, what works and why. One recent initiative in Britain is Race to the Top, aiming to broker a relationship between supermarkets and civil society around food, farming and retailing. The project is funded by the Esmée Fairbairn Foundation and the Department for Environment, Food and Rural Affairs and co-ordinated by the International Institute for Environment and Development. It has brought together all of the major UK supermarket chains. There are interesting differences in their approaches to sustainability. Some are represented at meetings by staff responsible for social responsibility, the environment, or sustainability. They tend to see sustainability as a challenge to be embraced. Others are represented by marketing or public relations staff. They are more likely to see sustainability as an issue that can threaten their business and which needs to be controlled.

Different responsible retailing strategies work better in different corporate models. Marks and Spencer seeks to incorporate ethical retailing into its overall brand. Other retailers seek to offer consumers choices between Fairtrade and other products, and budget products. Offering environmentally and socially responsible products sometimes fails – one example mentioned was a product that did not sell with an environmental label, but was relabelled to emphasise other aspects and sold well.
There were many examples of certification working well. In particular:
- RUGMARK, a certification system that addresses conditions for workers in carpet-making, was developed by suppliers in India and taken up by retailers in Britain.
- The Fairtrade label, applied mainly to food products, has also been supported by many European supermarkets and has had great success with consumers.
But some retailers do not wish to take on these labels because of a concern that the implied message is that the majority of their products are not ethically produced. And supermarkets are willing to take part in processes to develop the labels, but they appear unwilling to commit substantial third-party financial resources to the development of the system and extension of the product range.

Much of our discussion centred on the way companies deal with sustainability. Key success factors include having strong support on the board, and having a champion within the company such as a social responsibility manager. However, we talked about various examples, from retailers, professional service providers, and major industrial companies, where corporate practice has failed to live up to policy. There may be a variety of reasons for this:
- In some instances (e.g. Iceland’s organic initiative), a policy has been driven by one individual on the board without a change in overall corporate priorities. In such cases, the policy has often failed to translate into practice and has had to be retracted.
- In others, staff assessment and reward schemes fail to reflect employees’ contributions to corporate social and environmental responsibility. Where employees are rewarded only for focusing on “the bottom line”, they are unlikely to devote time and energy to other priorities.
- There may be a need for better communication and training within the company, in particular between those responsible for social and environmental policy and other departments. Employees in different company departments often work towards quite different goals and criteria.

We wondered whether sustainability will inevitably take a lower priority than other corporate goals, especially in the recent difficult economic context. Some companies have made environmental and social issues central to their brand or business model. They will continue to take new ethical retailing initiatives even under difficult operating conditions. For them, these initiatives are part of survival, maintaining “the bottom line”, and business development.

We discussed how far shareholder return really is the dominant driver for corporate behaviour. We noted that companies are also communities of people with their own values and concerns. But participants were doubtful whether companies would ever behave in ways that did not contribute to financial returns, at least in the long term. Indeed, company boards are legally required to seek to deliver the maximum possible return to shareholders.
Corporate social responsibility, then, is mostly about “enlightened” self interest, and it is questionable whether anything they do is truly motivated by sustainability. Those with experience of company directorship find that boards almost never talk about ethics. They are concerned with liability and image. Some of the most interesting examples of companies taking on social responsibilities have originated in external stimuli, such as pressure from NGOs or the media. Many other influences help to shape board members views of what lies in the company’s interests – for example, they may be affected by their children’s attitudes. Companies are also concerned to develop the image they project to current and potential employees. New graduates increasingly prefer to work in companies with a good record in social responsibility.

Several participants thought that economic self-interest was fundamental to human behaviour, and that this is reflected in the practices of NGOs as well as companies. But we also noted that the current system promotes a culture of pursuit of economic self-interest. Companies obviously need to return a profit to survive, but functioning in a competitive market, and in a system of shareholder capitalism, requires them to minimise costs and maximise profits.

On the whole, the marketing of responsible products has worked best when it centred on providing a higher quality product to the consumer. This is obviously the case for organic foods, where the main motivation for consumers may be to have a healthier or safer product. Shell has introduced greener fuels, but has found that consumers are only prepared to pay the higher cost when the fuels are marketed as higher-performing, or better for engines.

We spent a little time thinking about initiatives that come from consumers rather than retailers. The approach of Global Action Plan is particularly interesting. GAP works with small groups of people in “Eco-Teams”. The groups may be made up of households in a neighbourhood, co-workers, or members of social and other groups. The core of its approach is getting people to talk to each other. Participants monitor their use of energy and water, their car use and their generation of waste, and learn about the related environmental and social issues. Results have been very impressive: 50% reductions in waste, 23% reduction in water use, 17% in gas, 10% in electricity. Group discussions seem to be a key to developing a different set of shared values and ethics around consumption and lifestyles.

Policy recommendations
We spent a very short time discussing policy recommendations, but produced a list of priority areas:
For government
The government should put more emphasis on public procurement, e.g. in schools and hospitals, of organic food, Fairtrade products and other responsible products and services;
A higher priority should also be placed on education for sustainability, and on understanding the educational benefits of a stronger emphasis on sustainability in the curriculum.
There should be better funding for development education centres.
The government should build on the strength of current voluntary initiatives and consider making some of them compulsory.
In particular there should be a legal requirement for corporate social responsibility reporting with common criteria.
A complete review is needed of competition policy and of the obligations of company boards to shareholders, to enable companies to place greater emphasis on ethical priorities.
More support should be given (by governments and retailers) to initiatives such as Race to the Top, Fairtrade labelling and the

Forest Stewardship Council.
Companies should be required to develop green travel plans, including linking this to planning permission for new stores.
There should be more government support for social business models.
Taxes and subsidies need to change to “get the prices right”, providing incentives in the market for development, supply and consumption of responsible products.
Funding is needed for community-led farming R&D.
The government should provide more funding to support community groups which would, in particular, enable the use of third party facilitators.
Governments should make it easier for citizens to develop alternative lifestyle models, e.g. by making it easier to car-share.

For companies
Companies should have well-developed policies and visions for sustainability. These should be reflected in employment contracts through inclusion of specific, concrete and visible incentives for employee commitment to sustainability in their daily activities. The company policy on sustainability and its inclusion in individual contracts of employment should be fully explained and understood by employees.

The tax system should be used to encourage long-term investment in the provision of sustainable goods & services.
Companies should have champions for sustainable development (this could be a legal requirement for companies over a certain size)

More should be done to increase employees’ awareness of sustainable development, especially those in buying and marketing departments, and store managers. This could be done by companies, and it could play a stronger role in professional training courses.

Companies need to work out how to make more money from less stuff. This might include a shift from products to services.

And for others
Dialogue needs to develop at all levels, and among all actors, including internationally.
NGOs should do more work on benchmarking of responsible products and companies