Building a Sustainable Value Chain ..!!

The EU highlights that if the rest of the world adopted European lifestyles, the resources of two and a half planets would be needed to support consumption.

As consumption trends towards sustainability in major economies, what will be the future business model for manufacturers and retailers in advanced and developing economies?

Key Points on the Topic
• Sustainability is firmly taking its place on the business and global agendas. It is no longer a fringe discussion or “nice to have”. The prospect of a price on carbon, water scarcity and resource constraints are forcing action.
• Many economies and companies have been built on cheap credit, stable energy and commodity prices, and rising consumer consumption. Sustainable success in the post-crisis world will depend on innovation and collaboration.
• Companies caught flat-footed will miss market opportunities and face both community backlash and regulatory risk. Sustainability should be central to the business mission and a source of competitive advantage.
• Consumer demand for sustainable products is growing rapidly, but it is difficult for consumers to make informed decisions due to information overload (“sustainability spam”) and complexity of the issues.

Synopsis
There will be a tripling of the global middle class over the next two decades, as 2 billion new consumers enter the middle income bracket. If lifestyles of the average European or North American were adopted, the world would need more planet Earths to sustain the populace. In short, current consumption trends are fundamentally unsustainable.

This sustainability challenge poses both a threat and an opportunity. If left unchecked, the human race will face the “ultimate tragedy of the commons”. On the other hand, providing for the next generation of consumers in a sustainable manner presents an enormous opportunity for global businesses.

Companies which have taken the lead on sustainability demonstrate that there is no “impossible trade-off” between profitability and sustainable products and practices. They are also integrating the supply chain by helping suppliers reduce waste, improve energy efficiency, use innovative packaging and adopt closed-loop systems. At the same time, these leading companies are showing consumers that there is no need to sacrifice price or quality for sustainability.

National and local governments are supportive and continue to seek ways to level the playing field and price externalities without compromising development or living standards. The private sector will need to work with government, civil society and the media to help shape policy that aligns incentives for migration towards a sustainable economy.

However, incremental change is not enough. Radical changes are required. It is hoped that the “sustainability crisis” can be approached with the same sense of “can-do” spirit that was applied in response to the economic crisis.

Happy Reading..!!