WEF ConsumptionDilemma SustainableGrowth Report 2011

The Consumption Dilemma
Leverage Points for Accelerating Sustainable Growth
Report prepared in collaboration

with Deloitte Touche Tohmatsu and the World Economic Forum
Updated April 2011

The views expressed in this publication do not necessarily
reflect the views of the World Economic Forum.
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Contents
Preface/Project Background 4
1 Executive Summary 5
2 Introduction 7
2.1 The Contextual Challenge 7
2.2 Rethinking Growth 7
2.3 Decoupling GDP Growth from Resource Use 9
2.4 From Incrementalism to Transformation: Speed and Scale 10
3 Consumers: Changing the Terms of Engagement 13

3.1 Why Engage Consumers? 13
3.2 Rethinking How to Engage 14
3.3 From Behaviours to Values 15
3.4 From Consumers to Citizens 15
3.5 A New World of Consumer Engagement 17
3.6 Engaging for Change 17
4 Mobilizing Business Opportunities: Life Cycle Thinking 23

4.1 From Compliance to Competitive Strategy 23
4.2 Current Drivers of Sustainability for Businesses 23
4.3 Leveraging Life Cycle Metrics 25
4.4 From Life Cycle Assessment to Life Cycle Collaboration 26
4.5 Accelerating Business Innovation through Collaboration 28
4.6 Exploiting Leverage, Enacting Change 29
5 Enabling Transformation: Innovation in Public Policy 33

5.1 Why Public Policy Innovation? 33
5.2 Areas for Innovation 33
5.3 The Shifting Geography of Innovation 35
5.4 Barriers to Public-Private Innovation 35
5.5 Collaborative Sharing of Leading Policies 36
5.6 Policy Innovation for Sustainable Consumption 36
6 Moving ahead 41
6.1 Areas for Action 41
6.2 Leverage Points Requiring Business Innovation 41
6.3 Leverage Points Requiring Policy Innovation 42
6.4 Proposed Policy Innovation Platform 43
7 Conclusion 45
8 Annex 46
A. Inventory of Life Cycle Tools 46
B. Authors and Acknowledgements 49
C. References and Endnotes 53
The Consumption Dilemma | 3

Preface
Working in collaboration with a coalition of interested governments and international organizations, including the UN
Secretary General’s High-level Panel on Global Sustainability, a “Policy Innovation Platform” has been created to supply
reliable and unbiased guidance to advance public policies and bridge the existing trust gap between business innovation
and policy-making. Effective policies will be those designed to effectively catalyse transformative business practices and
citizen behaviours aligned to sustainable consumption.
The discussion of the Policy Innovation Platform will focus on sharing the experience and benefits of specific and proven
sets of policies (policy ecologies) that have accelerated and scaled up sustainable consumption in certain geographies
or specific dimensions. To define and most effectively implement this new platform, a series of dialogues and workshops
will take place at World Economic Forum events in 2011. For each meeting of the platform, the goal will be to have a
public and private sector set of hosts to enable a shared ownership of the discussion and a truly global dimension to
this work.
The creation of this Policy Innovation Platform builds on the World Economic Forum’s groundbreaking work on
sustainable consumption, which has gained considerable momentum over the last three years. It also sets the stage for
the new public-private phase of the World Economic Forum’s work on sustainability.
This report identifies some of the leverage points that offer the greatest opportunities to tip the economy as a whole
towards sustainable consumption. It considers the levers available to businesses, governments and the wider global
community. It also sets the stage for a new phase of the World Economic Forum’s work on sustainability: a platform for
policy innovation.
Many companies have been closely involved in the World Economic Forum’s sustainability work. The project board
of Industry Partners contributing their expertise and support deserve special recognition: Aegis Media, Agility, Alcoa,
Best Buy, Edelman, Kraft, Maersk, Marks and Spencer, Nestlé, Nike, Novozymes, PepsiCo, Publicis, S.C. Johnson,
SAB Miller, SAP, SAS Institute, Sealed Air, Unilever, Wal-Mart, Wipro and WPP. Collectively, their insights have been
invaluable. Also this report has been produced with the support of Deloitte, project adviser for this initiative.
We hope that a shift in focus from defining the case for sustainable consumption to identifying and accelerating the sets
of policies needed to achieve it will drive the change that is required. This shift towards public-private innovation will
catalyse the transformation needed, with scale and at speed
Robert Greenhill Sarita Nayyar

Managing Director and Chief Business Officer Senior Director, Head of Consumer Industries
World Economic Forum World Economic Forum USA
Randall Krantz
Director, Sustainability Initiative
World Economic Forum
4 | The Consumption Dilemma

1 Executive Summary
This report is the third to be published as part of the world, a new definition of development is needed; in
Sustainability Initiative of the World Economic Forum. It the developing world, a new trajectory for achieving it is
moves beyond asking why sustainability is important, and essential.
towards identifying leverage points that can tip the global
economy as a whole towards sustainable consumption. At the business level, sustainability must be integrated
into business models and product design, creating
There are plenty of examples of individual success new markets and finding new ways to engage with
stories on sustainability. These should be celebrated. consumers. For those businesses that innovate and
But, in aggregate, these still do not add up to the change adapt, there are huge opportunities, de-risking operations
needed. Globally, the pace of change remains too slow to and finding new models of value creation. But change is
step up the escalating use of natural resources and the disruptive – there will be losers as well as winners.
rising tide of environmental degradation – the business
community needs strategies that deliver transformative Where are the points of leverage?
change at the systemic level, with speed and at scale.
The report focuses on three key stakeholders, and
The report highlights the role of innovation and open
identifies key points of leverage for each:
innovation at every level of this transformation – in
collaborative thinking, in business strategy and in public • Consumers are the key shapers of the global
policy. economy through their product choices and their
engagement as members of social networks and
What is the issue?
communities, and as global citizens. Setting social
By almost any measure, human prosperity is greater now norms for sustainability, and recognizing the influence
than at any previous time in world history. In the last 30 of context on decision-making, offers a new way of
years, absolute poverty has fallen at an unprecedented unlocking transparent and open citizen engagement.
rate – even as the global population has increased from
• Businesses are the builders of a sustainable
4 billion to nearly 7 billion. A transformation is taking
consumption economy through investments and
place, as hundreds of millions of people move from a
innovation. Many businesses have used life cycle
subsistence existence to one based on their integration in
metrics to make themselves more efficient in resource
global webs of production and consumption.
use. But the report finds huge untapped potential
Sustaining and extending this prosperity, however, in the broader application of life cycle thinking.
depends on decoupling global consumption from both Co-innovation, meanwhile, far from compromising
its use of natural resources and its broader environmental competitiveness, offers businesses the opportunity
impacts. to be more adaptable and responsive to a dynamic
business and social environment.
Current trends are not promising. A combination of
increasing scarcity of some natural resources, climate • Governments are the enablers of scale and speed for
change and growth in global population to 9 billion by sustainability where business leaves off. Innovative
2050 are creating the conditions for a “perfect storm”. As public policy can ensure that public and private
it stands, humanity’s ecological footprint is 50% greater incentives for sustainability are better aligned.
than earth’s capacity to support it. Unchecked, humanity’s Governments can rally stakeholders and help create
ecological footprint could rise by a further third by 2030. the context for consumers’ decision-making. Public
procurement policies can tip markets towards
How can sustainable consumption be achieved? sustainability, quickly and at scale.
This report argues that current pathways to sustainability Overall, the report finds that the leverage points with the
do not offer the speed or scale required to meet the greatest potential for enabling a transformational shift to
challenge. Instead, a more transformational approach sustainability were those at the most systemic level: the
is necessary. There is a need to find leverage points values of citizens, the long-term strategies of business
that allow the tipping of the global economy as a whole and the integrated sets of policies of government.
towards sustainable consumption.
Where does the private sector go from here?
At the societal and government level, growth needs
rethinking. There have been several initiatives in recent The report identifies a number of specific strategies
years to dethrone GDP and material throughputs as for individual businesses, industries, value chains and
the sole measures of economic progress. Collectively, governments. These are explored in greater depth in the
the meaning of consumption needs to change from report itself – a summary of proposed actions is presented
one based on acquisition of goods to one based on here:
the creation of value and well-being. In the developed

Within the company: nable consumption by establishing WTO-compliant
• Embed sustainability in the DNA of the company – in international norms, creating an interlocking system
the way it organizes, behaves and communicates of subsidies and incentives, and preventing environ-
• Elevate life cycle thinking to the board of the mental regulations from becoming a cover for trade
company, and design incentive structures to match protection
• Integrate sustainability criteria into sourcing
decisions Next step: a Policy Innovation Platform
• Simplify life cycle assessments to make them more In order to drive these agendas forward, the report
accessible across the company recommends that the World Economic Forum and its
• Use life cycle assessments more strategically, partners establish a “Policy Innovation Platform”.
coupled with scenario analysis and strategic risk
and opportunity assessment The platform will focus on a small number of policy
• Edit out least sustainable products from the product areas highlighted in this report. They might include
range creating transparent brands through technology-enabled
networks, developing principles for smarter subsidy
Across an industry: reform, enhancing green public procurement, or exami-
• Standardize sustainability scorecards to better ning how best to encourage and enable waste recycling
set the “rules of the game” and allow for cross- programmes.
industry collaboration on sustainable supply chain
management Key to the success of such a proposal will be getting
• Cooperate on messaging, certification, environmental the right people involved, both in terms of position and
performance reporting and communication propensity. The World Economic Forum looks forward
standards, led by industry associations and alliances to catalysing this challenge throughout 2011 with CEOs
• Create composite environmental or social assurance from a range of companies as well as heads of state and
labelling at the industry level, rather than presenting ministers from progressive governments.
ever more product data
Across the value chain:

• Support consumer-led information communities (e.g.
GoodGuide) that increase stakeholder value, improve
brand transparency and improve data sharing
• Mainstream sustainability in financial indices, and
improve investor accountability to measures broader
than pure financial shareholder return
• Create a “life cycle mark-up language” to share
outcomes of life cycle assessments and allow
organizations to publish their analyses in machine-
readable format, creating system-to-system
communication
How does public policy fit in?

Innovation at the level of public policy is central to
enabling, accelerating and globalizing the shift to
sustainable consumption. The report identifies a number
of key actions for government:
• Target green public procurement, creating new incen-

tives for investment in the design and manufacture of
sustainable products, accelerating their uptake and
guaranteeing rapid economies of scale
• Engage in multistakeholder design and implemen-
tation of policy in specific issue areas (e.g. through
public-private roundtables)
• Provide leadership, particularly in emerging eco-
nomies that have increasing and significant market
leverage, economic influence and responsibility
• Align global trade policy with the objectives of sustai-

2 Introduction
2.1 The Contextual Challenge What is sustainable consumption?
By almost any measure, human prosperity is greater now Sustainable development was defined in 1987
than at any previous time in world history. In the last 30 by the United Nations’ World Commission on the
years, absolute poverty has fallen at an unprecedented Environment – the Brundtland Commission – as
rate – even as global population has increased from 4 “development that meets the needs of the present
billion to nearly 7 billion. A transformation is taking place without compromising the ability of future generations
now, as hundreds of millions of people move from a to meet their own needs.” The Driving Sustainable
subsistence existence to one based on their integration Consumption Initiative defines sustainable
in global webs of production and consumption. Even consumption in these terms: as consumption
as economic disparities between countries and within that meets the needs of the present without
countries increase, and even as the bottom billion risks compromising the ability of future generations to
being left behind, globalization has created new markets meet their own needs.
and new consumers.
Two principles are the core of these concepts. First,
Sustaining and extending this prosperity, however, development – qualitative improvements in people’s
depends on decoupling global consumption from lives – is more important than narrow definitions
both its use of natural resources and its broader of growth – quantitative increases in the size of
environmental impacts. Current trends are not an economy or in the scale of its throughputs.
promising. A combination of increasing scarcity of Second, the economic imperative should be to
some natural resources, climate change and growth in meet consumers’ needs rather than create wants.
global population to 9 billion by 2050 are creating the Sufficiency trumps efficiency. As an African elder
conditions for a “perfect storm”.1 As it stands, humanity’s at the Rio+10 Conference phrased it, sustainable
ecological footprint is 50% greater than earth’s capacity development is “enough, for all, for ever.”
to support it. Unchecked, humanity’s ecological footprint
could rise by a further third by 2030.2 Achieving sustainable consumption will be disruptive.
It implies a transformation of the global economy as
all-encompassing as the globalization of production and
“We must make the aspirational consumption that has made it necessary. It will create
attainable, the attainable sustainable, winners and it will create losers. Some companies will
and the sustainable affordable.” adapt better than others: discovering new opportunities,
engaging new consumers, innovating new products and
– Lars Olofsson, CEO, Carrefour making new markets. Some countries will fare better
than others: positioning their economies to be hubs of
sustainability and securing a new form of competitive
Sustainable consumption is, therefore, imperative.
advantage. Companies and countries that become part
It requires a fundamentally transformed system of
of the transformation of the global economy are far more
production and consumption. Even where immediate,
likely to prosper than those that do not.
partial solutions may be local – in coping with water
scarcity, for example – sustainable consumption
Systemic change will not occur by itself – either on
ultimately cuts across the global economy as a whole.
the scale necessary or in the time frame available.
And while sustainable consumption starts with the
This report, the third to be published as part of the
citizen – as the central actor in the global economy, as
Sustainability Initiative of the World Economic Forum, is
consumer, as investor, as voter and as employee – it
about identifying leverage points in the global economy
does not end there. Sustainable consumption is not only
that can tip the system as a whole, and highlighting the
about how much is consumed, but also about what is
role that innovation can play at all levels of the economy.4
consumed, how it is consumed and who consumes. It
is only achievable with the integration of sustainability
into business models, production and design. This is 2.2 Rethinking Growth
not about incremental improvements in the efficient use
of particular inputs – conserving water, reducing carbon For several decades, growth in gross domestic product
emissions or saving energy. It is about redefining value. (GDP) has been the primary goal of economic and
development policy. The appropriateness of rising
This is not about incremental improvements in the GDP as a measure of success (a task for which it
efficient use of particular inputs – conserving water, was not designed5) is now seriously in question. The
reducing carbon emissions or saving energy. It is about systemic transformation of the global economy implied
redefining value.3 by sustainable consumption forces us to rethink what

2 Introduction
Figure 1: Consumption needs to be decoupled from quantitative GDP Figure 2: Map of the world according to the Happy Planet Index8
growth as well as from environmental degradation
we mean by growth. To decouple consumption from

natural resource use and environmental degradation,
narrow concepts of GDP growth must be purposefully
decoupled from broader qualitative objectives: Key
prosperity and well-being. This is not to suggest that All 3 components good This map shows the overall
there necessarily are “limits to growth” in a pessimistic 2 components good, 1 middling scores given to each country
based on a traffic light score on
perspective, but there is a trend towards qualitative 1 component good, 2 middling each of the three components
growth.6 The implications for capitalism are yet to be 3 components middling of the Index (life expectancy,
life satisfaction and ecological
seen. Any with 1 component poor
footprint)
2 components poor or blood red footprint
The main criticism of GDP, as a measure, is that it

focuses on throughput of materials, capital and labour The Genuine Progress Indicator (GPI) is an alternative
rather than the outcome of improved lives. Targeting metric to GDP, an attempt to measure whether a
GDP growth tends to encourage greater resource use; country’s growth, increased production of goods
but this use might not translate into improved well-being, and expanding services have actually resulted in the
particularly in the developed world. improvement of the welfare of the people in the country.
While GDP is a measure of current income, GPI is
Above a certain level, quantitative increases in GDP no designed to measure the sustainability of that income
longer signify greater human prosperity. The returns through economic, social and environmental indicators.
of GDP growth – and its associated resource use – to GPI uses the same personal consumption data as GDP,
well-being may fall, or even become negative. As the but makes deductions to account for income inequality
map below shows, countries in the developed world are and costs of crime, environmental degradation, loss of
often worse at delivering long, happy lives in terms of leisure and additions to account for the services from
the planetary inputs that they use than some developing consumer durables and public infrastructure, as well as
countries.7 the benefits of volunteering and housework.
Figure 3: Real GDP and GPI per capita in the US, 1950-20048
$40,000
$35,000
$30,000
Year 2000 US Dollars
$25,000
$20,000
$15,000
$10,000
$5,000
1950 1956 1962 1968 1974 1980 1986 1992 1998 2004
GPI Per Capita GDP Per Capita

2 Introduction
Figure 3 shows that despite steady growth in GDP, the 2.3 Decoupling GDP Growth from
US economy, measured by GPI, has actually stagnated
since the late 1970s. Addressing both is difficult but not
Resource Use
impossible: shifting away from GDP growth and towards
For a variety of reasons, GDP growth has implied
a concept of “dynamic equilibrium” – maximizing units
higher levels of extraction, processing and use of
of well-being delivered per unit planet input – will make
materials which, in turn, has led to increasing levels of
decoupling prosperity from natural resource use easier.9
environment degradation. Reducing this negative impact
requires decoupling GDP growth and consumption from
“The growth economy is failing. In the cycle of resource extraction, use and disposal.
other words, the quantitative expansion
of the economic subsystem increases Historically, even as the material intensity of GDP has
fallen, the rate of increase in GDP has undermined any
environmental and social costs faster potential aggregate reductions in material use. In some
than production benefits, making us cases, increases in the efficiency of use of particular
poorer not richer.” resources has not resulted in them being used less, but
being used more (also known as Jevons’ paradox). In
short, decoupling GDP growth from the rate of resource
– Herman Daly, Senior Economist, World extraction via efficiency gains has not worked to the
Bank (1988-1994) degree economists and environmentalists have been
counting on.
The need to move away from a narrow focus on GDP,
to better price externalities and to shift development
objectives from quantitative growth to qualitative “As a CEO, if you want to plan for success,
improvements in life outcomes has resulted in a number you need to decouple your growth
of high-level initiatives in recent years.10 Recently, the
use of well-being and GPI as benchmarks of progress
strategy from your environmental
has been supported by the OECD.11 Some G20 impact.”
governments have indicated their intention to broaden
the sets of data that guide policy. In the United Kingdom, – Paul Polman, CEO, Unilever
the Office of National Statistics will start collecting data
on “happiness” in 2011. In the developed world, a new Figure 4 illustrates this point. In 2007, 26% less natural
definition of development is needed; in the developing resources were necessary to produce one dollar of
world, a new trajectory for achieving it is essential. economic output than in 1980. However, because
material intensity decreased to a lower extent than
Gross National Happiness economic growth, no absolute decoupling was achieved
and resource extraction continues to grow in absolute
In an attempt to define an indicator that measures
terms.
quality of life or social progress in more holistic and
psychological terms than GDP, the term Gross
Between 1990 and 2007, global energy intensity per
National Happiness (GNH) was coined in 1972 by
dollar of output fell by only 0.7% per annum.14 Under
Bhutan’s former King Jigme Singye Wangchuck, who
current economic growth rates, global carbon intensity
opened Bhutan to the age of modernization.
(defined as unit of CO2 equivalent per unit of GDP)
In 2008, a GNH Commission was founded at the needs to fall by 11% per annum between now and 2050
same time as Bhutan transformed itself from an if the 450 ppm level of atmospheric carbon accepted
absolute monarchy to a multi-party democracy. as the upper limit to keep global warming to 2ºC is to
Since then, the Centre for Bhutan Studies developed be achieved. Recently, many scientists suggested that
a sophisticated survey instrument to measure the atmospheric carbon should be lowered to 350 ppm to
population’s general level of well-being.12 GNH, prevent climate spiralling out of control.15
like the Genuine Progress Indicator, refers to the
concept of a quantitative measurement of well-being The consequences of this are stark: a need to radically
and happiness. Based on solid empirical research, shift away from throughput-based measures of growth
the survey uses 72 weighted indicators within nine (which promote continued growth in consumption
dimensions, including time use, community vitality without regard to well-being) and the need to change
and environmental diversity. Another version of the business models at unprecedented speed and on
survey instrument, based on the same body of work, unprecedented scale.
is being applied in Canada.

2 Introduction
Figure 4: Trends in global resource extraction, population, GDP and material intensity13
225
200
175
Index : 1980 = 100
150
125
100
75
50
1980 1985 1990 1995 2000 2005
GDP Resource extraction

© SERI 2010
Population Material intensity
2.4 From Incrementalism to Many barriers retard economic transformation or

prevent it: perverse incentives, poor policies and pricing
Transformation: Speed and Scale of natural resources without reference to externalized
costs. Removing these barriers would help – providing
Businesses are experimenting with new business
immediate competitive advantages to those engaging
models; some governments have undertaken radical
in sustainable practices. But there are more positive
policy measures. Both are being pulled and pushed
leverage points that can help tip the whole system
by a growing niche of consumers demanding more
towards sustainable consumption. In the view of the
sustainable products. Technological improvements
World Economic Forum Partners, identifying these
are reducing the intensity of resource use. These are
leverage points – interventions where small changes can
important steps in the right direction. Yet, they are not
produce broad, system-wide results – is the only answer
happening with sufficient speed or at sufficient scale.
to the scale of the challenge, its systemic character and
They do not add up to the transformation that is needed.
the speed needed to address it.
Figure 5: A hierarchy of the effectiveness of leverage points – places to intervene in a system16
High Leverage The Ability to Change Mindsets
•The power to transcend paradigms
Understanding the Goal of the System

•The mindset or paradigm out of which the system arises
•The goals of the system
The Rules that Set up the System

Effectiveness
•The power to add, change, evolve, or self–organize system structure

•The rules of the system (such as incentives, punishments or constraints)
Drivers of the System
•The structure of information flows

•The gain around driving positive feedback loops
•The strength of negative feedback loops
•The length of delays, relative to the rate of system change
Parameters of the System
•The structure of material stocks and flows (such as transport networks)

•The sizes of buffers and other stabilizing stocks, relative to their flows
Low Leverage •Constants, parameters, numbers (such as subsidies, taxes, standards)

2 Introduction
This report focuses on three sets of stakeholders, and

Consumption in transition
the leverage points pertaining to each – separately and
Consumption is a fundamental human cultural together:
expression, whether of hospitality, wealth, celebration
or success. Yet, if the trend of growing consumption • Consumers are key shapers of the global economy,
continues without any fundamental changes in the not only through their product choices, but also
way we think and how we consume, we face a very through their engagement as members of social
challenging future. networks and communities and as global citizens.
We have two choices – reconsider what consumption • Businesses are the builders of a sustainable
means in a proactive way and start designing a consumption economy through their investments
transition now, or wait until we are forced to react and and innovation. The strategic use of life cycle thinking
adapt. offers an opportunity to re-engineer business models
and value chains.
Changing the systems of “stuff” is a good place to
start – designing for modularity or reuse, advocating • Governments are the enablers of sustainability.
life cycle ownership of products by manufacturers, Public policy innovation can drive markets and
creating policy that supports better material decisions mobilize stakeholders, leading to actions and
and closing recycling loops, prototyping new outcomes at scale.
business and accounting models, etc.
The report will explore the roles for each of these
We may be missing a critical opportunity though. stakeholders, and potential points of leverage for them
We intuitively know that, after a certain level of to act now.
need is met, the acquisition of more stuff creates a
happiness that is very transactional. New research
demonstrates that our desire for stuff actually makes
us less satisfied and happy. But if we are consuming
experiences, we are happier – material purchases
bring more concern and less happiness than
experiential ones, according to a study from Cornell
University, published in the Journal of Personality and
Social Psychology.
There are examples, of course – services like Netflix

or Pandora turned media into a use rather than an
ownership model. Car-sharing services eliminate the
hassle of ownership. Software services in the cloud
can provide better performance while reducing the
carbon footprint of IT by up to 90%. Disruptions have
emerged when consumers can get better value from
the service rather than ownership.
But how might we start with designing for experience

rather than transitioning as the value proposition
appears? If we are to fundamentally alter how we
consume, let us begin with designing for experience
rather than acquisition.

Consumers
Changing the Terms
of Engagement
3 Consumers:
Changing the Terms of Engagement
3.1 Why Engage Consumers? How consumers choose
Recently, leadership opinion has pointed to the need Ultimately, consumer decision-making operates at
for a new approach: a need to shift from an era of three levels:
“super consumption” – in which consumption of
ever-greater numbers of quickly obsolescent goods is • Rational: Conscious decisions based on
viewed and marketed as an end in itself – to a “new information about the price, attributes and
normal” of consumption emphasizing value above performance of products and services – some of
“stuff”17. Understanding how consumers choose is the which may relate to utility to an individual, some
prerequisite to harnessing their choices in transformative of which may be more social. Though price is
change. Engaging consumers, and “nudging” their the single greatest factor in consumer decision-
choices towards sustainable consumption, is essential to making, purely rational decisions are rare. Most
creating a more sustainable global economy.18 of the information presented to consumers is
confusing.
• Emotional: Beliefs, emotions, brand image,

“All our instincts as clients, agencies [and] established habits, social influences and
media owners are to encourage people to heuristics – mental short cuts – all play a role
consume more – super consumption. This here. A large part of consumer decision-making
depends on emotion, intuition or habit. Some
is embedded in the consumer’s psyche 70% of items purchased every week are
and we will have to respond by making repeat purchases, with little or no conscious
sacrifices or doing things differently.” consideration of alternatives. Behaviour breakers
tend to relate to price and promotions.
– Sir Martin Sorrell, CEO, WPP, United • Contextual: Choice is also influenced by
Kingdom the environment in which a consumer makes
a decision, both the immediate physical
environment and the broader social and cultural
However as it stands, consumer engagement is not context. Social norms matter, particularly when
shifting the global economy towards sustainable the choice of a particular product or service is
consumption with enough speed or at scale. A minority visible to others. Personal recommendations can
of consumers are proactive in creating a sustainable be highly influential.
economy – fostering markets for sustainable products
and driving better consumer and corporate awareness. Figure 6: Influencers of consumer choice20
Their numbers are too small, however, to tip the
economy as a whole towards sustainable consumption.
Many consumers remain confused about claims to
sustainability of particular products and services, and
doubtful as to their ability to affect the workings of the
economy as a whole through their individual purchases.
The issue may be as much about where consumers are

engaged as how they are engaged and who they are. An
understanding of how consumers choose and interact
has been growing with advances in technology and data
collection over the past 10 years, offering an opportunity
for businesses to engage more genuinely with their
consumers. It also suggests that some of the most
powerful leverage points for consumer engagement
in sustainable consumption may not lie in traditional
marketing, but in the broader social context. The
challenge is that the sophistication of modern marketing
needs to be applied to new models of consumption
rather than promotion of super consumption.

3 Consumers: Changing the Terms of Engagement
3.2 Rethinking How to Engage Recycling Incentives to Motivate the Consumer
Consumer engagement strategies need to reflect the RecycleBank uses a carrot rather than a stick
complexity of the ways in which consumers choose, approach to motivate consumers and communities
spanning the three levels of consumer decision-making: to take positive environmental actions that lead to
rational, emotional and contextual. This, in turn, a more sustainable future. Through its kerbside
recycling programme and digital platform,
has implications on how consumers are engaged in
RecycleBank incentivizes environmentally preferable
sustainability, and which leverage points may produce behaviours with points that can be redeemed for
transformative change. discounts and rewards from participating local and
national business partners.
Below are a few lessons that have come from interviews
conducted as part of the research for the Consumer RecycleBank trades the actions consumers make for
Engagement workstream. points that they can use for specific rewards. This has
a positive impact on their homes by saving energy, on
their community by recycling and on the environment
by conserving natural resources. Those rewards
come in a variety of forms: products, discounts
and coupons from the world’s leading brands, or
points that can be donated to support environmental
education in schools.
Using RFID technology, RecycleBank can track

recycling – the more consumers recycle, the more
rewards they get. By bringing together municipalities,
consumer goods companies and consumers,
RecycleBank creates a world in which everybody
wins.
Lessons/Guidelines21 Implication
Choices are about identity: the purchase of a wide Relating sustainability to a range of products and
range of products is as much about identity and lifestyle services, and to a broader lifestyle or values choice may
of the purchaser or the intended recipient, as about the be an effective means of effecting consumer behaviour.
qualities of the product. Providing the empowerment and tangible actions to
support a purpose or value set will be vital.
Establishing social norms is key: nearly all Dialogue and engagement on sustainability, social norm
consumption choices are subject to some kind of social setting and leveraging of social networks of consumer
influence – either personal recommendations, ideas of practice are likely to drive changes in consumer behaviour
social acceptability, awareness of others’ purchasing in the long term. Key to this will be messaging on what
habits or visibility of one’s own. sustainability means and how it relates to the consumer’s
role in the wider world.
More information is not necessarily good: consumers More detailed and complex information will not necessarily
rarely balance the costs and benefits of each purchase. lead to a change in consumer choices. Credible, simple
Habit, emotion and intuition are more important as and trusted information may be more effective. Social
information – increasing the value of brands and easily labels, which describe the impact of purchase on another
recognizable and trusted labels. set of stakeholders, may be key.
Consumers have short time horizons: consumers Encouraging purchases of more sustainable goods may
tend to focus on upfront benefits of products rather than require that upfront costs more adequately reflect long-
long-term costs. Relative efficiency of products rarely term costs, or that long-term costs are more explicitly
outweighs relative initial outlay in affecting decision- displayed. Engagement strategies that pay back quickly
making. – such as RecycleBank (see box) – are likely to be more
effective.
Greater choice tends to lead to quicker, less reflective Choice-editing at the level of the retailer (or policy-maker)
decisions: consumers take less time considering their rather than at the level of the consumer, may be necessary
purchase when faced with an extensive range of choices to exclude some products. Research suggests this may
than when faced with a more limited range.23 be expected or even welcomed by consumers.23 Unilateral
retailer choice-editing (such as Marks and Spencer’s “Plan
A”) may help build an environmentally positive brand image.

3.3 From Behaviours to Values Women as ambassadors of the cultural imperative
Traditionally, the focus of efforts to change consumer Women are known to wield significant influence
behaviour has been at the point of purchase and in consumer decision-making: In the US, studies
pre-purchase, with mixed results. A deeper upstream show that women are responsible for buying 80%
shift in consumer values may be a more effective of household goods, and the Consumer Electronics
long-term approach24– and suggest a more authentic Association (CEA) reports that women are the primary
way of engaging with consumers, in a pre-competitive consumers when it comes to wireless gadgets and
environment. gizmos. According to CEA officials, women are
outspending men in electronics purchases US$55
Consumer behaviours in-store tend to be highly billion to US$41 billion. The trade organization also
transactional and heavily influenced by price. But reports that women influence 90 percent of consumer
values, if sufficiently deeply embedded, can alter the electronics purchases.
consumer calculus decisively (e.g. fair-trade bananas vs
cheap bananas). However, values are relatively hard to Among the poor, women are usually responsible for
create or change: they are often instilled in childhood, collecting water, firewood and feeding their families.
through families and early education systems. So On the ground, they see the impacts of consumption
while transforming consumer choice through changing on rivers, forests and croplands. Grassroots activism,
consumer values may offer the greatest long-term such as Wangari Maathai’s Green Belt Movement is
leverage, it implies a long-term shift involving media, empowering women to plant trees and take a stand
businesses, public policy and education.25 for their local environment. Gender gaps in education,
employment, health and political representation are
3.4 From Consumers to Citizens narrowing. At the same time, laws and social norms
that have discriminated against women are shifting in
some countries.
The shift from behaviours to values suggests a new
way of engaging with consumers – as citizens and as Together, these factors are giving women greater
members of broader communities. influence and decision-making power within
households and markets. Empowered women can
Companies and governments spend considerable sums become a secret weapon in a shift to sustainable
to influence consumers. But research indicates that the consumption.
strongest influence on consumer behaviour and values
comes from the broader social community. Trust is There is some evidence from different fields
central.27 (behavioural economics, finance, psychology) that
women are more risk-averse than men, display
The re-conceptualization of the consumer as citizen is web-thinking rather than linear thinking, are more
not radical in itself, but actually changing the interaction likely to think of long-term interests rather than short-
that institutions have with the consumer is fundamentally term compensation and tend to take more inclusive
more challenging. The essence of marketing over several decisions. These traits are precisely those which
decades has been the disaggregation of individual sustainability leaders have argued for in business
consumers from society as a whole, in a process of and government – planning for implications, systems
continuous market segmentation. thinking, long termism, and informed decisionmaking
– all of which are necessary for a shift to sustainable
“We are sensing a return to citizen, rather consumption.
than consumer, values – proof positive To capitalise on this potential will require moving
that it is citizenship, not consumerism, beyond focus groups to include women and gender
that is the more enduring ethos. In short, in the design, marketing, advertising and delivery of
the experiences of the future based on sustainable,
we are sensing a citizen renaissance.” healthy products and services. By leveraging
women as citizens and ambassadors of the cultural
– Robert Phillips, President and CEO, imperative, the shift to sustainable consumption can
Edelman, EMEA be accelerated and the long-desired “consumer pull”
for sustainability could see increased traction.

Engaging consumers as citizens is the reverse. It will

Collaborative consumption
involve:
A concrete example of active community building is
• Recognizing the broad societal networks which
through collaborative or collective consumption28.
provide meaning to and influence the values of
Through this collaborative consumption a community
consumers and citizens: families, friends, places of
gets together through organized sharing, swapping,
worship and schools;
bartering, etc. to get the same pleasure of ownership
• Capitalizing on renewed impetus of communities
with reduced personal cost and burden, and lower
and networks – virtual or otherwise, driven by
environmental impact. These exchanges happen
communications technologies;
mostly on a local or neighbourhood level.
• Understanding and acting upon a cultural shift from
“me” to “we”; Collaborative consumption is not a niche trend, and
• Engaging the consumer through shared it is not a reactionary blip to the recession. It is a
responsibilities to society and the co-creation of socio-economic groundswell that will transform the
products and services. way companies think about their value propositions
and the way people fulfil their needs. One example
One recent example is the “10:10” campaign that the in the form of fractional ownership is the renting of
British government initiated to reduce carbon emissions cars being executed by Zipcar, which owns cars
by 10% by the end of 2010. The campaign has caught and allows individuals to rent them by the hour,
the public’s imagination and engaged individuals and and Whipcar, which is a platform which lowers the
communities in hundreds of thousands of activities. transaction costs for individuals to rent out their
own cars to friends or neighbours. Both Hertz and
However, there remains a strong tension, almost Mercedes are now exploring fractional ownership
schizophrenia, in the role of governments. While models.
there are many programmes run by departments of
environment promoting sustainable consumption, The collaborative consumer is also an engaged
they are consistently out-resourced by the mandate citizen, one who both owns and spreads messages
for growth and jobs. Until these perverse imbalances and values. As the business models start to change,
are reconciled and governments make a transparent so too must the mental models of how consumers
shift in their priorities, the mixed signals will continue to and citizens are influenced. This will most clearly be
undermine trust by consumers and business. seen through deeper two-way engagement and the
emergence of a more active consumer.
Above all, change will involve recognizing that while the
applicability of specific leverage points may vary from
culture to culture, the greatest long-term leverage points
for consumer engagement are always likely to lie at the
social and cultural level. The following graphic takes a
snapshot of the emerging drivers that influence actions
and enact behaviour shifts.
Figure 7: Illustration of the interrelationships of different stakeholders on citizen values and engagement

3.5 A New World of Consumer 3.6 Engaging for Change

Engagement
Signals from the next generation
The real potential of consumer engagement – to shift Nike has conducted in-depth qualitative research on
business models, to transform consumption and to offer attitudes towards sustainability among young people
new opportunities for businesses – is only now being aged between 17 and 25 in the United States, Brazil,
recognized. The scope for innovation is huge. the United Kingdom and China30. Five messages
Unlocking consumer engagement offers opportunities emerge from this research:
for new kinds of relationship and a different form of 1. Young people are acutely aware of global social
competitive advantage. Trust, co-creation and authentic and environmental issues. An entire generation
consumer engagement will complement price and senses itself to be living on “orange alert” – with
logistics as the characteristics of successful businesses a constant feeling of uncertainty.
in this new world of consumer engagement.
2. For many of them the word “sustainability” has
One radical form of consumer engagement is co- negative connotations. More optimistic, positive,
creation of goods and services enabled by new forward-looking language may be needed to
communications technologies. For example Threadless, promote engagement.
an online start-up, allows users to submit T-shirt designs
which are then voted on through the Internet, with 3. Changing young people’s behaviour is most
winning designs going into production. There are limits likely if it can be connected to or inspired by
to how widely this can be applied, depending on the particular social leverage points: sport, music,
type of product and services and the availability of the art, film, fashion, etc.
supply side of consumer innovation.
4. While cynical about brands in some respects,
Even where co-creation is not possible, consumer young people recognize that governments do
engagement can become far more collaborative and not have all the answers, and brands have a role
more socially driven, building far stronger brands in the to play in changing the world.
process. The Pepsi Refresh project is shifting up to one-
third of PepsiCo’s overall marketing budget to interactive 5. For young people, business transparency and
and social media.29 honesty is the prerequisite for trust.
Sustainability has a strong role to play in the new world

of consumer engagement – building social values of From the above, it is easy to conclude that engaging
sustainability and businesses’ trust with consumers consumers is unpredictable. However, this also provides
around those values. an opportunity while consumers are currently looking
at new options and questioning their values. Engaging
Case study: the power of networks (I) consumers and citizens on sustainable choice through
the social context of their decision-making will be a
Crowd sourcing initiatives may be a next step in generational investment. There are positive signs,
engaging consumers who look to their values when however, that a broad generational shift in values is not
making purchasing decisions. New information only possible, but that the foundations for it are already
communities, such as GoodGuide.com, will play a there.
crucial role by leveraging new data (such as life cycle
The implications are powerful: better sustainability
metrics and health hazard assessment) and new
narratives, if backed by high levels of trust, can tip the
technologies (smart phones and social networks)
next generation of citizens towards a world where more
to enact changes in consumer demands and
sustainable models of consumption become accepted
awareness. “Fellow citizens” can find products that
as a global social norm.
match their values, share these products with their
social network, switch between products and send Governments and businesses have key roles to play:
signals in the marketplace about what they want from
companies. • Governments – through education, regulation
of markets and other public policy measures –
can create an environment in which sustainable
choices are supported. They can be instrumental in
creating new social norms and values that influence
consumer behaviour both long before purchase and

long after it. At the same time, active citizens provide

the support that policy-makers need to commit to
sustainable policies.
• Companies can have an opportunity to lead rather

than follow consumer awareness of sustainability:
through upstream education programmes
reflecting the social dimensions of consumption;
through collaboration along value chains; and by
communicating sustainable value propositions,
products and services to their customers. Crucially,
this depends on businesses doing what they do
best: creating and capturing value. Transparency in
marketing will be key to building trust, and standards
such as the International Chamber of Commerce
(ICC) Framework for Responsible Environmental
Marketing Communications will provide much-
needed guidelines accessible to all companies.31
• Both governments and companies have a role

to play in choice-editing for consumers based on
sustainability.32 This editing of consumer choices
can be actioned by manufacturers or retailers
as an expression of their corporate values, i.e.
by not offering certain products or ingredients
to consumers, such as blue fin tuna; or by
governments, by regulating or phasing out certain
products, such as incandescent light bulbs.
Transformational change cannot happen without broad

collaboration between stakeholders, a focus on the pre-
competitive contextual level of consumer values rather
than competitive in-store decision-making and open
innovation to create the learning systems that enable a
seismic shift in values. This cannot happen without re-
conceptualizing the consumer as citizen.
The leverage points for tipping the global economy

towards sustainable consumption are increasingly clear.
The challenge now is to activate them purposefully.
Below is a summary of leverage points explored through
discussions over the past year.
The table below is intended to serve as a qualitative

dashboard to highlight the points of highest leverage,
based on the insights of this chapter. Some of these may
challenge conventional thinking, which was indeed the
purpose of the workshops and interviews through which
they were collected.

“To make progress on the environmental agenda, the important thing is to get politicians
to work with the private sector. Collaborations, actions and personal commitments are
required.”
– Fred Krupp, President Environmental Defence Fund

High
Ability to Change Mindsets
Leverage
Potential Impact

implementation
Replicability
Rules that Set up the System

Scalability
Ease of
f
Leverage Points / What can be done
Low Parameters of the System
Leverage

Transparency and authenticity of business values (Drivers of the System)
High Sustainability embedded in the core value proposition of a company needs not only to be reflected through
High
High products but also through the way the company is organized, behaves, communicates, etc. Transparency and
High resulting consumer perception of the degree of sustainability of an organization will be key in engaging them on
sustainability.
Consumer-led information communities Rules that that

(Rules Set upSet
the System
up the System)
High New and strengthened interactions with consumer-based information communities (e.g. GoodGuide) will allow
Med
High new collaborations to take place and evolve. Such interactions will allow for better brand management, increased
High
stakeholder value and the improvement of data in the sharing of collective resources.

Pricing signals (Subsidies/Taxation)
High Through use of fiscal incentives, governments can nudge citizens towards sustainable lifestyles by closing the
Med price gap for more sustainable products or engaging significant tax rebates for their use. Companies can also
Med
Med work on pricing to influence consumer behaviour by identifying loss leaders to precipitate a change in consumer
purchasing habits. These actions, however, only have an effect when the price change resulting from their
measure is sufficiently important.
High Shifting mindset on what is socially acceptable (Ability to Change
Mindsets Mindsets)
Low Ability to Change
High Social influencers can stigmatize products and services to make them socially unacceptable, often having far
High
greater impact than regulation or price signals. Stigmatization influences deeply embedded values. This shift is
extremely difficult and often takes decades, but results in a deeper change that has impact on the longer term
versus changes in behaviour which are often only transactional.
Influencing values through early education Ability to Change

(Ability Mindsets Mindsets)
to Change
High
Low The gain from the education of a child accrues not only to the child or to his/her parents but to other members
Med
High of the society. Governments have the ability to nudge the long-term values of a society by structuring education
accordingly. Social influencers such as NGOs might act as a neutral party in evaluating education programmes for
sustainable values
Choice-editing: making only sustainable choices available (Rules

Rules that
that Set up set up the System)
the System
Med
Med Choice-editing can be done by the industry (including retailers) by removing unsustainable or less sustainable
High products. Governments can introduce roadmaps for elimination of unsustainable products and can intervene and
Med
ban certain less sustainable products from the market (e.g. China is phasing out incandescent light bulbs).
Med Business association collaboration on messaging (Rules

Rules that
that Set up set up the System)
the System
Low Business associations have the power to act as a platform and to engage with their members and influence
High
High them in taking specific actions when it comes to sustainability. This can happen through standardization of
messaging, defining performance requirements, sustainability certification, environmental performance reporting
and community engagement standards.
Med Labelling – Accreditation and Certification (Drivers

Drivers of the System of the System)
Low Instead of confusing the consumer with more data, it is often more effective to target the values of a consumer
Med
Med through a label of environmental or social assurance (e.g. P&G with their future friendly label, Body Shop and
animal testing, or the Fair-Trade label). Use of such labels can help to create a trust relationship between the
consumer and the company or sector.
Med Breaking habits through collaboration (Drivers

Low
Med Most purchases are done based on habits, which are rather difficult to influence or change. Past and first
Low
experiences are very powerful to start (or continue) engaging consumers on sustainability. Through industry-wide
collaboration, the usage of widespread promotions of campaigns can encourage the consumer to test or buy
sustainable products for this crucial first experience.
Low Labelling – Data and Information (Drivers

Med There is so much noise in terms of labelling that such information flows might never be as strong as they could
Med
High be in terms of impact. Providing product information to influence purely rational drivers only motivates a small
percentage of people, and impact on end consumers is often overestimated.33

This key explains the qualitative rating system used for leverage points on the table opposite and graph below:
High Medium Low

Impact Can trigger a fundamental Can reinforce positive Important steps to take but
shift in the way the system behaviours or can break doesn’t enable a fundamental
operates down barriers for progress change in the system
Ease of Change can happen fast with Change desired but only Requires disruptive shifts in
implementation incremental costs and few on a longer time horizon organisational systems due to
political barriers due to inherent political and divisive or polarised mindsets
economic barriers
Replicability Easy to copy and non- Needs better regulatory Difficult to replicate or
exclusive. Can be emulated in and business environment implement beyond regional or
various geographies globally to gain momentum across national context
geographies
Scalability Can be easily scaled between Accessible by large entities Costly to scale requiring large
municipal, national, regional but difficult to enact on a investments in order to grow
and global levels regional or global scale beyond local pilot phase
The icons from the 2010 Redesigning Business Value report, are used to classify the various types of leverage points found in the graph.

Mobilizing Business
Opportunities
Life Cycle Thinking
4 Mobilizing Business Opportunities:
Life Cycle Thinking
4.1 From Compliance to Competitive Life cycle metrics (LCMs) – data which track resource
use and environmental impacts of goods and services
Strategy from resource extraction and production through to how
Until relatively recently, business attitudes towards goods are used and disposed of – are already providing
sustainability tended to be reactive and focused on companies with a much better understanding of key
compliance. Companies’ principal focus was on resource inputs along the entire value chain. This can be
mitigating risk, addressing concerns raised by NGOs a powerful tool, both at the operational and the strategic
and attempting to avoid or influence government level. Nestlé’s Environmental Management System has
regulation. explored indirect and direct water use along the value
chain and has been able to reduce the company’s risks
and input costs by doing so.36
“To realize sustainable consumption, it is
crucial to leverage lifecycle thinking at a But LCMs and associated life cycle thinking have even
strategic level as a driver of business and greater potential – as a leverage point for businesses,
value chains, industries and the global economy as
policy innovation.” a whole. Scaling up sustainability with speed means
helping more and more firms to raise life cycle thinking
– Steen Riisgaard, CEO, Novozymes from the shop floor to the boardroom, using it to drive
corporate research, development and innovation, and in
The context for business has begun to change. building broader sustainable business ecosystems. Fully
Awareness of environmental sustainability issues exploited, life cycle thinking has the ability to mobilize
has increased among consumers, governments and disruptive, transformative change with both speed and
businesses, heralding an increased role for accurate scale in the board room and along the value chain.
data and information on environmental impacts.
Consumer demands for transparent and sustainable 4.2 Current Drivers of Sustainability for
sourcing have grown. Investors are increasingly holding
companies to account and looking to sustainability
Businesses
as a possible source of future higher shareholder Corporate approaches to sustainability are being
return. Increasing resource scarcity and related costs driven by a number of factors – consumer behaviour,
have increased the costs of raw materials and energy. government procurement and regulation, and decisions
Governments are becoming aware of the need to move made by market leaders and market makers as well as
beyond GDP growth as the definition of economic investor behaviour:
development. Tighter regulatory frameworks have
emerged, supporting incremental change but not • Consumer engagement: increasing social
yet enabling the transformative shift to sustainable awareness of sustainability issues, coupled
consumption that is needed. with the growing importance of civil society and
consumer empowerment through technology has
As the context has changed, so have business attitudes. led to baseline demands for transparency about
Chief executive officers are increasingly recognizing the environmental and social impact of goods and
the importance of sustainability to the future of their services. Companies unwilling or unable to provide
businesses. According to one report, over 90% of CEOs this are at risk of losing brand equity and market
see sustainability as important for their company’s future share.
success.34
• Employee engagement: engaging employees in
Sustainability is also increasingly being elevated from an a company’s sustainability journey is not only critical
issue of operational management to one that influences for the integration of new values into the DNA of a
product design and corporate strategy. For example company, but also for attracting and retaining talent
the Sustainability Board of METRO Group, chaired by in an increasingly competitive market. In addition,
the CEO, recommends binding targets, guidelines, as part of the shift from consumers to citizens,
standards and measures to the management board employees can serve as a testing ground for new
and, in this manner, continues to further develop the products, services and strategies.
corporate sustainability strategy.35
• Government procurement: a rising trend
This section of the report argues that life cycle thinking towards the introduction of sustainability criteria
and the metrics that inform it may have a powerful role in government procurement is driving companies
to play in accelerating this shift from compliance to to consider their own processes from a life cycle
strategy and in opening possibilities for innovation within perspective. The European Union has introduced
businesses and across value chains.

4 Mobilizing Business Opportunities: Life Cycle Thinking
a target that half of the public tendering processes institutional investors become more focused on
must be “green” by 2011. In the United Kingdom sustainability issues from a risk-adjusted financial
alone, this is estimated to have the potential to return perspective, this will further accelerate the
create an annual £ 110 billion market for sustainable transition towards sustainable business practices.
goods and services, through changes in Government The trend towards sustainable investing is also
Buying Standards to come into effect in 2011. In the driven by the increasing demand of asset owners
United States, both the federal government and state (as universal owners) and international initiatives
governments have adopted measures that use the such as the UN-backed Principles for Responsible
purchasing power of the state to create new market Investment.
incentives. A new Executive Order requires agencies
of the federal government to report their GHG • Resource scarcity: increasing constraints on the
emissions and to reduce them over time.38 Tipping supply of natural resources relative to demand is
the government market towards green procurement driving businesses to better manage their resource
will help drive down the price of sustainable products inputs or even to exit resource-intensive sectors
as their manufacture is scaled up. where uncertainties about future availability are
too high. Increasing resource scarcity implies the
• Regulation: the trend to sustainable procurement is potential for rising costs and dislocations. However,
complemented by changes in regulation. In different it can also be a driver of innovation and a driver of
ways, regulations such as the European Union’s future value and markets (e.g. from waste materials).
Waste Electrical and Electronic Equipment (WEEE) Above all, it can help decouple global prosperity from
directive and Registration, Evaluation, Authorization resource use.
and Restriction of Chemicals (REACH) are changing
the way in which companies design and manufacture • Minimizing externality risks: sustainability matters
their products and how they consider disposal, to business because it reduces exposure to the risk
driving research and development budgets towards of increased scarcity of resources and to the risk that
more sustainable alternatives. Extended producer these (carbon, water, waste) are radically repriced
responsibility (EPR) – or product stewardship – in the future. Embracing models of sustainable
encourages manufacturers to design environmentally consumption across the value chain will provide
friendly products by holding them liable for costs at stronger resilience against external shocks.40
the end of the product’s life.
These drivers have been and will continue to be effective
• Market leaders and market makers: some in helping to build sustainability into the DNA of individual
purchasers of goods and services, particularly large companies, markets and the economy as a whole.
retailers, are using their scale in the marketplace
to influence practices within their supply chain and Case study: the power of networks (II)
triggering shifts in the economy as a whole. In some
cases, purchasing scale is the key factor. Wal-Mart GoodGuide uses life cycle metrics to identify what
has been a market maker by engaging across the matters most in a product’s supply chain – essentially
supply chain to decrease the environmental impact the scientific “hot spots” – and what matters most
of its products, reducing inputs and creating a to consumers – the “hot button” issues. GoodGuide
cascading incentive for suppliers to explore their own delivers information to consumers on the life cycle
environmental (and other) impacts. In others, the impacts of products and supply chains, including
power of example is enough. Marks and Spencer environmental, social and health impacts – right
and Tesco have been market leaders through “Plan at the moment a consumer is making a decision
A” and carbon labelling, respectively. A combination about a product in a store or online. This information
of GE’s scale and innovation, coupled with community enables positive feedback loops for
government regulation, has made a new market for sustainable products and services, and incentivizes
LED lighting that barely existed a few years ago. much greater transparency from companies.
• Sustainable investors: an increasing number of

investors integrate long-term environmental, social
and governance (ESG) criteria in their investment
and ownership decision-making processes with
the objective of generating superior risk-adjusted
financial returns. These extra-financial criteria are
used alongside traditional financial criteria such as
cash flow and price-to-earnings ratios. As large

However, the full potential of LCMs to leverage change

Thinking strategically: identifying leverage for
will only be realized if the metrics are applied beyond
sourcing the corporate entity and across the value chain. As
the Walkers’ case study demonstrates, exploring the
The WWF – World Wide Fund for Nature identified
value chain can reveal and release enormous business
35 places on earth richest in biodiversity and most
value, as well as reducing resource use and aggregate
important from an ecosystem perspective – and then
environmental impacts. LCMs need to be easier to
highlighted 15 commodities that posed the greatest
use in this way: more legible and more interoperable.
threat to these places. It turned out that 300-500
Producing best practice scorecards against which to
companies controlled 70% of the trade in these
measure relative success and failure may be one way of
commodities. Just 100 companies controlled one-
exploiting this potential.
quarter of trade in these commodities, a powerful
leverage point. Rapidly, WWF’s focus was able to A standardized life cycle mark-up language (LCML)
move from an almost impossibly complex challenge could facilitate sharing among stakeholders along the
– global biodiversity – to a more manageable issue supply chain by making it easier for firms to collect
– how to persuade 100 companies to adopt more and share data useful to all. Leveraging LCMs across
sustainable practices for 15 commodities. The the value chain cannot only unlock further value
key message is that large market players can be incrementally but also help transform product design,
tremendously important points of leverage in value the structure of the value chain and the way in which
chains and in transforming the dynamics of global companies design and sell products and services.
markets..
Case study: Walkers Crisps
4.3 Leveraging Life Cycle Metrics
With the help of the Carbon Trust, Walkers Crisps
Life cycle metrics have become an integral tool of (a PepsiCo brand) set out to measure the carbon
business. In a Global Reporting Initiative survey, 86% footprint of a bag of crisps. The original intent of the
of respondents rated “the ability of businesses to trace exercise was for a product carbon label targeted at
products through their entire life cycle” as “important” or the consumer; however it emerged that the benefits
“very important.”41 went far deeper into the supply chain. The study
found that the most energy-intensive part of the
Life cycle metrics can and will be used more.42 More process of making crisps was involved in drying
extensive and more detailed data can be collected and raw potatoes – which had been soaked with water
collated, and the data can be made more rigorous. But by farmers to increase their revenue due to a price
LCMs can also be used differently – with far greater structure based on weight of potatoes.
scope and at a far higher level in companies. Leveraging
LCMs means moving from a purely technical analysis Both farmers and Walkers won by aligning incentives
of past environmental impacts to making them useful in the form of a new price structure based on volume.
as a driver of strategic decision-making and innovation. Energy efficiency was improved. Energy use per
It means moving the tool from the shop floor to the kilogram (kg) of crisps produced has fallen almost
boardroom. 33%, from 4.6 kWh/kg to 3.1 kWh/kg 2000-2007,
achieved through improved shutdown and start-up
processes, optimized lighting systems and a range
“Sustainability is reshaping the of investments in new technologies . PepsiCo UK
competitive landscape for business. reduced its overall carbon intensity (CO2e per kg of
Companies that adopt a life cycle production) by 5.9% during 2007.
approach for making smart decisions on Engagement between Walkers and its suppliers was
where to focus efforts for greatest benefit enhanced through better communication and by
will be the ones that survive in the long working to find varieties of potatoes which required
less water. By looking at the supply chain of all
term.” commodities and unit processes, new business value
was uncovered and aggregate resource inputs were
– William v. Hickey, President and CEO, reduced.
Sealed Air Corporation

4.4 From Life Cycle Assessment to Life step represents part of the evolution laid out in the
matrix above: 1) Simplified Life Cycle Assessments;
Cycle Collaboration 2) Information to Communication; 3) Information to
Understanding the different ways in which LCMs can Corporate Strategy; 4) Corporate Strategy to Value
create value can be usefully represented along two Chain Collaboration.
axes. On one axis, the use of life cycle metrics can
Each measure, by itself, offers incremental improvement
be classified as passive or active, with active use of
in the application of LCMs. Taken together, these
LCMs implying their application to business models and
measures constitute a potentially transformative set of
strategic value creation. On a second axis, the use of life
tools.
cycle metrics can be classified as principally for internal
use, or also for the purposes of external collaboration 4.4.1 Simplified Life Cycle Assessments
along the value chain.
Traditional life cycle
In the first quadrant – life cycle assessment – the core assessments have tended
challenge is to scale up data collection and to make it to be highly technical
cheaper and more focused. In the second quadrant – life and either designed for
cycle information – data is transformed into information internal use relating to a
Simplified
for communication with consumers and stakeholders, Life-Cycle single product or set of
Assessments
meeting their demands for transparency, mitigating products, or as a means
reputational risk and creating new opportunities for to complying with external
engagement. In the third quadrant – life cycle strategy – reporting requirements.
LCM data becomes a tool for strategic decision-making, Some companies have outsourced LCMs – others,
allowing sustainability to be a driver of innovation through such as Unilever and Nike have developed their own
new strategies, business models, products and services. techniques internally. Some standardization has
In the final quadrant – life cycle collaboration – those emerged – with an ISO guideline emerging as a favourite
strategic conversations are extended across the value way forward for many – but the processes tend to
chain including, ideally, the involvement of value chains, remain expensive and complex, limiting their applicability.
consumers and competitors.
The practical measures below represent a pathway,

with many intermediary steps, from individual company- This could change. Simplified life cycle assessments
level life cycle assessment to life cycle collaboration – such as those now being undertaken by Levis,
across an industry or an entire product life cycle. Each Patagonia or Timberland – create rules of thumb
Figure 8: Enabling life cycle thinking within organizations and along the value chain45
Value Creation
Strategic
Embed sustainability
Collaborate along
into your organization
your value chain &
& strategy
build shared
strategies with
customers and
Report and suppliers
benchmark
performance
(ISO,
investors)
Inform the
Gather Engage with consumer
appropriate life certification
cycle data and partner
perform life cycle
assessment Compliance
Collection
Data
Internal External Stakeholder

Processes Engagement

and aim to capture relative sustainability rather than

Case study: Earthster
comprehensive impacts. The availability of clear, simple
information can help drive design within the business, Wal-Mart engaged suppliers of seven products in
as through Nike’s Considered Index which highlights a project to identify, and capitalize on, sustainable
environmentally preferred materials. At the same time, innovation opportunities across their products’ life
the availability of such information will enable more cycles. The suppliers, working with Wal-Mart and the
companies to take step changes in their processes Environmental Defense Fund (EDF), used the open
instead of individual products. While not a substitute for source Earthster tool (earthster.org) to generate a
the rigour of full LCA, they are complementary and could graphical and numeric portrait of the environmental
broaden the use of life cycle analysis within the company and social hot spots in product supply chains, using
through the identification of “hot spots” across entire basic information from inputs to final production.
product ranges. Policy-makers can play a role in helping They then identified opportunities for innovations that
to identify potential target areas.45 would reduce impacts as well as costs.
4.4.2 From Information to Communication The assessments generated some surprising results.
For example for canned tomato sauce, Earthster and
By itself LCM-based
its underlying life cycle inventory data showed steel
assessments produces
can be a source of greater environmental impact
no direct change on
overall than the tomato sauce itself. In short, the
business models and little
biggest opportunities for Wal-Mart to change the
change of products or
From environmental footprint of the product lay several
Information to
processes. The data must
steps back along the value chain. Earthster enables
Communication be communicated to and
suppliers across the supply chain to collaborate in
interpreted into information
generating and sharing information about innovation
by consumers and other
opportunities and to report on their success at
stakeholders in a way that
capitalizing on them.
can easily be understood and acted on. In order for data
to be used to drive changes in behaviour, the information
and its implications need to be fed back to improve and Procter and Gamble have created new lines of
information flows. detergent targeted to reduce life cycle impact through
cold water washing. This is also being encouraged on a
Broader information communities and open source national level in countries such as Denmark, which has
systems, coupled with greater standardization in LCM- set up a knowledge centre to assist public and private
driven labelling will help by creating new information companies gain competitive advantage through better
flows for greater sustainability. The Ahold retail chain’s understanding and integration of life cycle metrics.47
“Puur & Eerlijk” products (Pure & Honest) were launched Sustainability cannot only help lower costs, it can also
in 2010. The clear labels across goods’ categories increase volumes of sales and increase margins based
have made it easier for customers to choose products on higher quality products. DSM, a Dutch chemicals
produced, grown and sourced sustainably.46 company, contributes to solutions that help to improve
fuel efficiency, such as low weight plastics to replace
4.4.3 From Information to Corporate Strategy heavier metallic components in a car, and second
Life cycle metrics have generation biofuels based on cellulosic raw materials
From Corporate
generally been used as that are not used for food or feed.48
Strategy to Value Chain
Communication measures of risk exposure, 4.4.4 From Corporate Strategy to Value Chain
but they can also be Collaboration
a spur to innovating
products and business Life cycle metrics can also
practices. If LCMs are as From Corporate help create change across
Strategy to Value Chain
visible as costs across Communication the broader value chain,
an organization they where 80-90% of most
will change corporate culture, becoming integral to products’ environmental
core business models and signposts to new growth impacts occur. Extending
opportunities. collaboration across the
value chain can be difficult,
Upon recognizing that the greatest environmental bringing into play concerns
impact of all product ranges is consumer use of about competition and disclosure. Traceability of some
washing powders at high temperatures, both Unilever goods can also be difficult. Small and medium-sized

enterprises (SMEs) may not have the financial capacity The starting point for open innovation is enhanced
to undertake their own life cycle assessments. However, sharing of existing know-how and technologies,
rewards and opportunities are potentially significant, as with mutual benefits and overall improvements in
demonstrated by the Carbon Trust’s new certification sustainability. Organizations should make far greater use
standard for SMEs.49 of external ideas and innovations in their own practices,
while making their own unused and underused ideas
Scorecards allowing retailers to monitor progress on and technologies more widely available. Individual
environmental and social measures on behalf of their organizations are often wasteful of the knowledge they
suppliers may be one tool to enhancing value chain possess. Barely one in 10 German patents is currently
visibility and collaboration. Wal-Mart has surveyed used by the patent holder, with the other 9 remaining
suppliers on environmental practices and performance unused.
since 2009, with the use of a relatively simple set
of questions relating to sustainability. It created the
Sustainability Consortium (TSC) to develop industry
“Just by trying to decouple growth from
standard metrics for conducting life cycle analyses carbon emission and environmental
of products and publicly announced it will create a impact, we have a tremendous incentive
Sustainability Index.50 The retailer now also requires full
formulation disclosure for chemical-based products.
to innovate.”
– Sir Terry Leahy, Chief Executive, Tesco
“While we are waiting for broad policies
that address market failures associated Beyond sharing existing knowledge, ideas and
with externalities and the environment, processes, open innovation implies the co-creation
there is a lot to be done right now by of new technologies – along value chains, between
companies and consumers and, under certain
coalitions of companies and NGOs.” circumstances, even with competitors.
– Mark R. Tercek, President and CEO This is not about undercutting the principle of protection
Nature Conservancy. Protecting Nature, for intellectual property (IP). It is about recognizing that
co-generation and systemic sharing will often create
Preserving Life far more value than individual programmes of research.
This is particularly the case for sustainability, where
Ultimately, however, the objective is to create a business so much potential value is locked in the structure and
ecosystem joined by a common understanding of processes of the value chain. Open innovation is not
LCMs. Such an ecosystem would have far greater about making oneself uncompetitive, it is about adapting
awareness of both individual and aggregate impacts on to a new knowledge environment to make oneself more
both the environment and social systems, but, crucially, competitive and responsive to change. In the end, it is
would also possess the tools to share information and about making business smarter, as well as about making
collectively improve mechanisms that ensure such business more sustainable.
impacts are contributing to sustainable prosperity.
Industrial symbiosis projects could be a model for entire Valuable ideas do not have to come from internal
value chains on a global scale. The challenge is that, to research and development programmes – they can also
be of most use to business, standardization should be come from outside. Open innovation places external
done once, done right and done globally. ideas and pathways to market on the same level of
importance as internal ideas and market pathways. At
4.5 Accelerating Business Innovation the same time, much know-how – which companies
themselves may not view as IP – could be usefully made
through Collaboration available elsewhere, potentially creating new streams
of income and bringing collective benefits. Principles of
Shifting life cycle metrics from operations to strategy
open innovation allow ideas rather than structures to
within the company, and then to collaboration along and
predominate.
across value chains, involves harnessing breakthrough
innovation. It is not about greening existing business In addition to traditional IP, there are increasing amounts
models but accelerating the creation of entirely new of data becoming available that are often being thrown
models. The imperatives of scale and speed cannot be away by companies. As technologies such as radio-
met without disruption. Again, they demand a much frequency identification (RFID) evolve and become
broader model of open innovation. ubiquitous, the capacity to collect data will continue to
grow. That data is not intellectual property, and is not
really intellectual capital or know-how. It is also only

worth something if processed and analysed. While it

The Role of Open Innovation
is hard to see how a consumer products company
might sell such life cycle data, if it can be placed in the Systemic change requires more open innovation:
commons, it will definitely be an asset to someone else. allowing businesses to co-innovate new business
models, share expertise and ensure that innovative
To engage in the sharing part of open innovation,
ideas and processes currently locked within a single
companies will need to analyse and understand their
organization – and possibly unused by it – become
IP better than many do today. They need to conduct a
agents of transformation. Open Innovation should
“knowledge audit”, placing potential IP into one of three
not replace competition; it should complement it.
categories:
For example in 1998 Nike began researching
1. Intellectual property to be guarded closely as a core
environmentally preferred rubber and developing
competitive advantage (currently the category in
formulations that could be applied to footwear.
which most IP is implicitly placed).
In FY2009, 76% of Nike shoes contained
2. To be shared or licensed on a case-by-case basis, environmentally preferred rubber, while incurring
perhaps in different industries or geographies which cost savings. While it makes perfect sense to
do not compete. In some cases, reducing license keep this intellectual property out of the hands of
fees for patents will unlock income streams which competitors, many of the same rubber compounds
make licensing more cost effective than attempting are used in the tire industry, an industry that uses
to prevent abuse. 75% of the rubber produced in the world . Using
the platform of the GreenXchange, Nike’s patent for
3. In other cases, pre-competitive open innovation “Rubber Compositions with Non-Petroleum Oils”
may be necessary for an idea to reach the scale can be licensed for other applications, reducing
necessary for it to be a marketable opportunity. In R&D for a licensee and generating licensing revenue
this case IP should be placed in the global commons for Nike.
for all to use, possibly to be leveraged to shift a
market towards a certain technology through which While new technologies have enabled accelerated
all can benefit through scale or standardization or the information exchange between consumers and
creation of a new market. companies, many companies have not yet engaged
in open innovation processes with other businesses
4.6 Exploiting Leverage, Enacting Change across the value chain, or fully explored the
benefits of co-generating business ideas with their
Businesses are the builders of the sustainable consumers. The potential upside is underrated –
consumption economy. That economy is currently under static cost-benefit analysis suggests companies
construction, but there are powerful and potentially have more to lose than to gain. Too often, sharing is
transformative leverage points, which could accelerate seen as uncompetitive.
the process – emphasizing innovation, collaboration,
scale and speed. Yet, successful knowledge cultures are frequently
those that are most interactive. In an increasingly
fast-moving world – where disruptive technologies
and trends are a part of the business and social
landscape – predicting future needs is highly
complex. The ability to learn – in real time – from
customers or business partners through open
innovation, often facilitated by social networking
can confer a radical advantage – and it can
speed up the systemic shift towards sustainable
consumption.
This requires shifts in two directions: first, from the

generation of proprietary knowledge to shared and
collaborative knowledge and, eventually, open or
mutual knowledge; second, a shift from mutual
dependency between consumers and businesses
centred on products to a more empowering
relationship based on servicing human needs.

High
Leverage
Potential Impact

implementation
Replicability

Scalability
Ease of
f
Leverage Points / What can be done Low Parameters of the System
Leverage

Life Cycle Thinking at the board level (Ability to change Mindsets)
High
High Incentive systems and performance evaluations need to be designed to reward life cycle thinking. These need to
High go right to the top – the accountability of the board and CEOs needs to be broadened to incorporate sustainability
High
measures with demonstrable linkage to the short- and long-term interests of the company.
Consumer-led information communities Rules that Set

(Rules up the
that SetSystem
up the System)
High
Med New and strengthened interactions with consumer-based information communities (e.g. GoodGuide) will allow
High new collaborations to take place and evolve. Such interactions will allow for better brand management, increased
High
stakeholder value and the improvement of data in the sharing of collective resources

Sustainability criteria integrated into sourcing decisions (Drivers of the System)
High The impact of sourcing and procurement criteria is multiplied downstream - retailers on manufacturing companies
Med
High and those manufacturers on their suppliers. Governments also play a leading role through their procurement
High
power – up to 15% of GDP in some economies.
Targeted public procurement Drivers of the(Drivers

System of the System)
High
Med Governments create market signals for suppliers by actively sourcing more sustainable and fairer products and
High
Med services through improved procurement policies. As business models evolve to cater to new criteria, the resulting
ripple effect will raise industry standards for adopting sustainable practices and life cycle metrics.
Simplified LCA methodologies Rules that Set

(Rules up Set
that the System
up the System)
High
Med Simplified life cycle assessments (LCAs) and product category rules of thumb will enable more informed decisions.
High
Med Coupled with scenario analysis and strategic risk / opportunity assessment, simplified LCAs will allow companies
to evolve their business models as they reorganize, especially in the design phase.

High Innovative regulation: Materials recovery and life cycle responsibility (Rules that Set up the System)
Med Product stewardship, Extended Producer Responsibility use financial incentives, such as unit pricing, to ultimately
Med
High encourage manufacturers to design environmentally-friendly products by holding producers liable for the costs of
managing their products at end of life.
Standardization of sustainability scorecards Rules that

(Rules Set Set
that up the
upSystem
of the System)
High
Med There remains a need for an agreed set of standards for sustainability scorecards, as several retailers are pushing
Low independent sets of criteria up their respective supply chains. Ideally, collaboration would take place at an industry
Med
level to create a global set of criteria that would set the rules of the game.
Mainstreaming of sustainability in financial indexes Parameters of the System

(Parameters of the System)
High
Low Investor and holding company accountability on measures broader than shareholder return is in its infancy. With
Med
High greater transparency in sustainability performance and increases in popularity of the likes of the Dow Jones
Sustainability Index or FTSE4Good, will lead to a greater responsibility for companies to change.
Med Platforms for sharing innovations Rules that Set

(Rules up the
that SetSystem
up the System)
High Platforms to share and track sustainability impacts along value chains will enable the identification of hot spots
Med
Med where companies can compete to maximize efficiencies. Governments also have a role to play in promoting
research and disclosing information to all interested parties.

Med Creation of a “Life Cycle Mark-up Language” (Drivers of the System)
Med A life cycle markup language could be used to share outcomes of life cycle analyses along a value chain, and
Med
High would allow organizations to publish the life cycle analyses of their products in a machine-readable format, leading
to system-to-system communication.

Med Market-Maker demand (Drivers of the System)
Low Market makers who use their scale to influence practices within their supply chain (i.e. through supplier
Med
High scorecards) create positive feedback loops in industry behaviours. Critical to this is the position of market makers
as supporters of independent organizations that advocate sustainable business models.
Labelling – Data and information Drivers of the (Drivers

Low
Med There is so much noise in terms of labelling that such information flows might never be as strong as they could
Med
High be in terms of impact. Providing product information to influence purely rational drivers only motivates a small
percentage of people, and impact on end consumers is often overestimated.

High Medium Low

economic barriers
geographies

Enabling
Transformation
Innovation in
Public Policy
5 Enabling Transformation:
Innovation in Public Policy
5.1 Why Public Policy Innovation? Open innovation applies to policy-making as much as
it does to collaborative business innovation. Effective
As this report has made clear, getting public policy public policies can and should learn from examples
right is essential to building the sustainable economy from communities, civil society and businesses – as
that is needed. Good public policy can create markets, well as from policy innovations elsewhere. While not a
incentivize businesses and transform consumer government policy, the development of ISO SR 26000
behaviour in support of sustainable consumption. by the International Organization for Standardization has
Bad policy can help entrench perverse incentives, brought together governments, businesses, NGOs and
destroy opportunities for sustainable value creation and international organizations in shaping the world’s first
discourage innovation. truly international standard to encourage environmentally
and socially sustainable activities.
“Low prices on resources and no prices Such policy innovations are important. Without them
on externalities will create waste and sustainable consumption will either remain a niche
discourage innovation. Smart policies can market or become the market paradigm too slowly to
mitigate the environmental and resource risks facing the
help overcome this.” world and the associated economic, social and political
disruption which they may bring.
– Tom Albanese, CEO, Rio Tinto
Exploring Policy Innovation
The different roles of government – as enablers of
markets, as incentive providers and as enforcers of Policy innovations are those policy levers needed to
compliance with regulation – are critically important to catalyse increased profitability of business through
unlocking business innovation and to guiding markets’ sustainable consumption strategies and practices.
allocation of scarce capital. Changes to policy can help
build better alignment between private returns and Understanding the potential for public innovation,
sustainability objectives. Policy frameworks can make barriers to realizing such potential and how best to
markets work in the private and the public interest. overcome these barriers was a critical element of
the work of the initiative during 2010. Two specific
In short, policy and politics matter. questions were addressed at this early stage:
As previously mentioned, public education on • What policy innovations would enable
environmental issues can help guide citizens in their businesses to profitably advance closed loop
consumption choices. In the Kyrgyz Republic, the practices?
concept of sustainable environmental education
has been developed by environmental experts from • How best might collaborative action advance
universities, the relevant government ministries such policy innovations?
and non-governmental organizations, seeking to
incorporate sustainability into education from preschool 5.2 Areas for Innovation
through to those in the workplace.53 Political elections
are increasingly becoming opportunities for public Progressive governments are increasingly recognizing
awareness raising and debate on the environment, as in the role of sustainability in their national economies. In
Brazil’s 2010 presidential elections. some countries this is principally a matter of securing
future competitive advantage – in Brazil’s vision of a
Public policy can also establish the right price signals for bio-economy for example, or in China’s drive to develop
sustainable goods and services, and level the playing its international position in clean tech, or in Morocco’s
field for businesses by setting standardized requirements decision to attempt to become a clean energy hub for
for sustainable practices. Governments’ support for North Africa and Europe. For others the focus is more
social and environmental standards and labelling has basic – in some cases it is a matter of survival, such as
grown rapidly in recent decades, from the European in Jordan’s drive to secure affordable energy as a means
Union’s extensive and technically focused disclosure to overcoming extreme water shortages and associated
requirements on chemicals (REACH) through to more food security challenges.
recent US legislation requiring companies to report on
the origins of selected mineral components from conflict
countries and a number of consumer-facing fair trade
labels.

5 Enabling Transformation: Innovation in Public Policy
The range of policy instruments available to governments • Regulation: environmental objectives, and
is wide and varied. Most, directly or indirectly, seek sustainability objectives more broadly, are
to reshape businesses and the economy as a whole increasingly reflected in a broad range of regulatory
towards closed loop strategies that optimize natural frameworks:
resource use and secure environmental stewardship:
- Incentives, subsidies and market
• Public procurement criteria: the decision to mechanisms: in some cases these regulations
incorporate sustainability criteria into government are indirect in effect: through carbon pricing or
procurement – whether at the national or the local taxes for example. At times, policy reversals
level – can instantly create significant markets for are also required, such as the end to incentives
sustainable products and services, helping tip the that, in effect, reward unsustainable businesses
economy as a whole towards sustainability. Having relative to their more sustainable counterparts.
originated in Europe and North America the idea is Despite the 2009 G20 commitment to phase out
now global. The Green Purchasing Network India for fossil fuel subsidies over the medium term, the
example is an association of professionals supported International Energy Agency estimates energy
by the Japanese-founded International Green subsidies to be running at over US$ 550 billion
Purchasing Network, developing green procurement per annum worldwide.
strategies and practices, especially across the public
sector.54 - Prescriptive regulations: in other cases,
the regulations are embedded: in corporate
• Publicly-funded research: government support governance, reporting and stock-exchange
for research in sustainable consumption pathways listing requirements. The US’s Securities
is key. China has recently completed an initial Exchange Commission has recently mandated
investigation into how it can progress its “sustainable corporate disclosure of carbon emissions,
trade” strategy by accelerating the development arguing its relevance from an investor risk
of its service sector and encouraging inward management perspective irrespective, technically,
investment in “green growth” sectors. Governments of the science. Since 2002, larger French
in every major economy are funding research into companies have been required to publish annual
the development and diffusion of environmental sustainability reports, just as the China’s State-
technologies. owned Assets Supervision and Administration
Commission now requires all central state-owned
• Public awareness campaigns: campaigns in enterprises to report on their CSR performance.
support of environmentally friendly behaviour,
either directly sponsored by governments or by - Global collaborative visioning: this has
other public bodies, have become increasingly become a far more significant aspect of change-
commonplace. The Brazilian government’s public making in recent years, with initiatives, such as
awareness campaign on the negative environmental UN Secretary-General Ban Ki-moon’s High Level
effects of plastic bags has reduced use to 800 Panel on Global Sustainability, co-chaired by the
million units in one year. On behalf of US non-profit presidents of South Africa and Finland, providing
organizations and government agencies, the Ad directional focus for governments and businesses
Council conducted campaigns on recycling. The and helping to catalyse the dynamic for action on
amount of total waste recycled in the US increased the ground.
by 24.4% from 1995 to 2000 after the launch of the
campaign, proposed by the NGO Environmental
Defense.55 “We can all trust markets to perform,
but governments need to give the right
• Setting, implementing and enforcing standards:
whether set by governments or by industry signals to provide the context for pricing,
associations, standards – covering everything from information and infrastructure.”
sustainable forestry to labour friendly production to
energy efficiency ratings – have become a powerful – Lord Nicholas Stern, Chair, Grantham
tool in driving transformative change. Though Research Institute on Climate Change and
promoted by industry associations rather than
specific public policy, sales of certified sustainable the Environment
coffee rose by a factor of five between 2004 and
2009.56

Getting the selection and application of policy Asia are establishing new benchmarks in urban design
instruments right is not straightforward. Single policy for sustainable living. Japan’s “Top Runner” programme57
instruments and measures rarely suffice, even for for example is a ratcheting energy efficient label, with
relatively simple environmental impacts, businesses or best practice by product category defining the bar for
markets. Interventions at multiple levels – local, national those wanting to achieve visible success under the
and international – are often needed. programme.
It is also important to explore which policies have not The shift in policy innovation is accentuated by the
been effective, or have not been transferable or scalable. political difficulties in establishing significant policy
Over-simplistic, heavy-handed interventions can prove innovations in Europe and North America during a period
ineffective or even counter-productive, raising domestic of extended economic vulnerability and acute concern
costs, confusing consumers, advantaging businesses about what the economic outlook means for citizens,
that can evade measures, incentivizing substitution families and communities.
into equally problematic but unregulated areas or
unintentionally generating widespread compliance failure. Importantly, however, the shift in the geography of policy
innovations is complemented by a shift in the geography
5.3 The Shifting Geography of Innovation of policy impacts. Policy leadership in small European
nations is likely to produce less leverage for global policy
Beyond the boundaries of any single state, governments innovation now than in the past and will have a less
have a role to play in shaping the international rules substantial aggregate effect on the global environment
of the game. In some cases, the sheer size of a sub- than in the past. The impacts of policy innovation in
sovereign (California), national (United States, China) major emerging nations – both in terms of environmental
or regional economy (the European Union) means that impacts and in terms of global markets – are far greater
internal decisions on regulation or procurement can have than before.
global market impacts. More broadly, local, regional
and national governments, and their international Emerging economies have expressed growing concerns
counterparts, can and must play a central role in over many existing sustainability-related standards,
establishing international frameworks that will allow especially private voluntary standards with international
tomorrow’s eco-sensitive businesses, markets and scope but developed principally by Western businesses
international political economy to flourish. and civil society organizations, often with support
from their respective governments. In some instances,
Policy leadership on environmental and social issues is concerns are focused on the specifics of the standards
most often associated with Northern Europe – notably themselves, especially where they relate to labour and
the Nordic countries, Netherlands and Germany – and broader human rights issues. More often, however, the
to some extent North America. Waste recycling rates underlying concern is perceived biases in how they
in Switzerland, Germany and Norway are among the were developed, who governs them and whom they
highest in the world at 52%, 48% and 40% respectively. benefit over others. Western businesses and civil society
Recycling targets, take-back legislation and eco- organizations, in turn, express concern over both the
labelling exemplify what were once extraordinary unwillingness of emerging nations’ businesses to comply
policy innovations when they were first introduced, with such standards, and yet often have inadequate
and illustrate the potential scaled impacts that such capabilities to engage in domestic, emerging nations’
innovations can have if they are implemented effectively standards development processes.
and are well understood across governments and
nations. 5.4 Barriers to Public-Private Innovation
But patterns of policy leadership and innovation are Policy innovation is a considerable challenge. There
changing. China has taken a leading role in investing are understandable concerns that forcing the pace will
in the development of the critical battery technology disadvantage some domestic business in international
required to advance electric vehicles, with private markets and slow down the rate of growth. Lobbying by
sector leaders such as BYD and has driven down the those with interests in a business-as-usual approach can
global price of solar panels through volume effects on serve to prevent or even reverse much-needed policy
costs. South Korea has perhaps most visibly positioned developments. Governments too often do not have the
green growth as its national strategic framework going expertise – or the adequate connections between their
forward, while countries such as India and South Africa many policy-making functions – to know which blend
are progressing ambitious renewables initiatives, with of policies will catalyse the desired business innovation
India’s Solar Mission initiative involving the development to beneficial national effect. Reaching out to external
of 20 GW of solar generating capacity by 2022. expertise comes with its own challenges, with politicians
Meanwhile, new cities in the Middle East and across and officials stretched to judge which advisers have
which biases or support what interests.

Of course governments can and do interact with and business, governments, research institutions and
learn from each other. However, the dynamism and international agencies. Established to advise the State
complexity of the sustainable consumption space makes Council on public policy options to advance sound
traditional learning models redundant. These typically environmental practices, it has over 18 years covered a
focus on specific policy levers – such as how to legislate wide range of key areas, currently including low-carbon
for take-back. But the challenge ahead is much broader: economics and trade, investment and the environment.
to create a broader policy ecology with many moving Similarly, since the end of apartheid, South Africa has
parts. established many public-private forums mandated to
advise on policy developments across many spheres.
Such an ecology, involving diverse and interrelated
policies, will generally require a spectrum of policy Sustainability standards, including consumer-facing
instruments with emphasis on convening, mobilization, labels, are commonly not only developed collaboratively
procurement, incentives and standards, as well as more but are governed and promoted through public-private
conventional regulatory responses. partnerships. The Forest Stewardship Council for
example has business, government and non-profit
Understanding what it takes to stimulate the business members from many countries, as do other initiatives
innovation required to scale up sustainability at speed designed to promote sustainable consumption
is key. Yet, most officials are deeply uncomfortable practices.
engaging directly with business. This discomfort and lack
of confidence is all the greater where disruptive business 5.6 Policy Innovation for Sustainable
models and associated technologies are involved – in
fact precisely in those areas where the potential for rapid, Consumption
scaled change is greatest.
Policy innovation is a prerequisite to the rapid scaling
of business practices, consumer behaviours and
5.5 Collaborative Sharing of Leading market conditions aligned to sustainable consumption.
Policies Exemplary progress has been made in specific policy
areas in particular countries. The barriers to leveraging
Policy innovations are needed to enable innovation these leadership cases are, however, considerable.
and smart investment of businesses to drive forward Without overcoming them, little further progress can
profitable strategies aligned to sustainable consumption. be made and, indeed, some sources of inertia, such
However, the textbook separation of business strategy as competitive fears, could actually reverse positive
and public policy is less relevant today given the achievements.
complexities and dynamics of intensely competitive
global markets. Co-design and collaboration in Distrust between business and policy-makers, combined
implementation are increasingly essential to securing with lack of knowledge and often capabilities on both
smart policies that do the job rather than reinforce old sides, makes progress difficult. Weak knowledge
problems. transfers between governments create further problems,
not least because of a lack of integrated approaches
Two examples of collaboration can be cited. The within governments. And the historic shift in leadership
European Food Roundtable on Sustainable Consumption towards emerging nations, while ultimately opening
and Production was created to raise awareness and new opportunities, creates further frictions in the short
advance co-designed voluntary and statutory action term, especially given the generally embryonic stage of
along the global food value chain. Involving the farming development of intergovernmental collaboration and,
community, food retailers and non-profit organizations, even more so, public-private collaboration.
the roundtable is co-chaired by the European
Commission and Nestle, and has been effective in Across the following page are potential leverage points
influencing a range of European policies and is active which came out of recent conversations.
in promoting life cycle analysis and other standards.
The Sustainability Consortium, similarly, has focused on
comparable range of issues but has a lower involvement
of public institutions as core members.
Co-design is increasingly the international norm in the

analysis of public policy options aligned to sustainable
consumption. The China Council for International
Cooperation for Environment and Development (CCICED)
is made up of Chinese and international experts from

“Our greatest potential will come from embracing sustainable consumption as an

opportunity to collaborate on solutions that will leap frog us into the future.”
– Mark Parker, CEO, Nike57

High
Leverage
Potential Impact

implementation
Replicability

Scalability
Ease of
f
Leverage Points / What can be done
Low Parameters of the System
Leverage
Targeted public procurement Drivers of the(Drivers

High When governments actively source more sustainable products and services by changing procurement policies,
High
High this creates a market signal for suppliers who engage with the government. Once the new business model is in
High
place to cater to these new criteria, it will have a ripple effect within the industry.
High Multi-stakeholder policy design (Rules

Rules that
that Set setSystem
up the up the System)
Med Governments that can evolve and enable multiple stakeholders to collaborate and take part in the design will
High
High be essential in securing smart policies. The European Food Roundtable on Sustainable Consumption is an ideal
example of a multi-stakeholder collaboration that is successful in influencing a broad range of EU policies.
Innovative life cycle regulation Rules that Set

(Rules up the
that setSystem
up the System)
High
Med Product stewardship, Extended Producer Responsibility and “Pay As You Throw” use financial incentives, such
Med as unit pricing, to ultimately encourage manufacturers to design environmentally friendly products by holding
Med
producers liable for the costs of managing their products at end of life
High Policy leadership Ability to(Ability

Change to change Mindsets)
Mindsets
Med Large emerging economies that have greater leverage for global policy innovation have a growing sphere of
Med
High influence (and responsibility) to provide solutions within their own borders but also in sharing best practices for
advancing policies globally.
High Reforming fossil fuel and related subsidies Rules that Set
(Rules up the
that setSystem
up the System)
Low There remains a significant market failure where it is extremely important to tackle this perverse incentive if
Med
High there is significant change to be made. This certainly applies to energy and fossil fuels but also to many other
unsustainable resources that are politically sensitive because of culture or job creation.
Fiscal business & capital market incentives Rules that Set

(Rules up Set
that the System
up the System)
Med Asset owner accountability to broader measures than shareholder return will be driven by greater transparency in
Med
Med sustainable investing, increases in popularity of sustainability indices, and demand for information such as carbon
High
emissions risk by security exchanges, and a trend towards integrated reporting.
Med Choice-editing policies Parameters of the System

(Parameters of the System)
Med Governments can introduce roadmaps for elimination of unsustainable products and can intervene and ban
Med
High certain unethical/unsustainable products from hitting the market. NGOs can also act at as a third party to evaluate
the sustainability level of products being sold on the market.
Eco-design and production standards (Parameters

Parameters of the System)
of the System
Med Elevating criteria in the design process will trigger automatic change along the value chain as it will force all players
Med
Med to rethink the use and sourcing of certain materials. This will trigger stakeholder collaboration along the life cycle of
High products and redesigned products to fit within new production standards while remaining profitable.58
End of life recovery and recycling infrastructure (Parameters

Parameters of the System)
of the System
Med Besides setting high-level targets for recycling and recovery, governments need to put in place the appropriate
Med
Med infrastructure, which must be demographic and location-specific. This may include technologies such as mixed
Med recovery facilities for sorting or specific collection infrastructure for household and industrial waste collection.
Trade policy aligned to sustainable consumption (Rules

Rules that
that Set up Set up the System)
the System
Med
Low National carbon trading and taxation schemes have elevated the debate on trade and the role of the WTO in
High regard to national environmental measures and their compatibility with international trade law. Advancing a
High
coordinated approach on setting international norms will allow for an acceleration of policy innovation.
Public awareness campaigns Drivers of the(Drivers

Low
Med Through the development of new school curricula or political election campaigns, governments have an
Med opportunity to share with their citizens the necessary knowledge for them to make informed decisions on
High
sustainable consumption.

High Medium Low

economic barriers
geographies

Moving ahead
6 Moving ahead
6.1 Areas for Action • Transparency and authenticity of business
values
In each of the sections of this report, key leverage points Sustainability embedded in the core value
that can be used to tip the system have been examined. proposition of a company needs not only to be
In addition to evaluating the potential impact, the scale reflected through products but also through the way
and the speed of each of these, it is also important to the company is organized, behaves, communicates,
consider what the practical next steps for each of these etc. Transparency and resulting consumer perception
might be. of the degree of sustainability of an organization will
be key in engaging them on sustainability.
Broadly, the points of highest leverage are those that
transcend the physical systems in value chains – the • Life Cycle Thinking at the board level of the
values of citizens, the strategies of business and the company
policies of governments. With the obvious disclaimer Incentive systems and performance evaluations
that each of these leverage points will require different need to be designed to reward life cycle thinking.
stakeholders, this section attempts to identify which of These need to go right to the top – the accountability
these might be actioned by different stakeholders and of the board and CEOs needs to be broadened
stakeholder groups. to incorporate sustainability measures with
demonstrable linkage to the short- and long-term
6.2 Leverage Points Requiring Business interests of the company.
Innovation • Sustainability criteria integrated into sourcing
decisions
As sustainability trends increasingly shape the
The impact of sourcing and procurement criteria is
competitive landscape, businesses are grappling with
multiplied downstream - retailers on manufacturing
the simultaneous need to de-risk their operations
companies and those manufacturers on their
and find new models for value creation. This future
suppliers. Governments also play a leading role
constellation of business interactions demands
through their procurement power – up to 15% of
new business models across the value chain and a
GDP in some economies.
simultaneous shift to decouple value generation from
resource use. As concluded, this requires more than • Strategic use of simplified and more accessible
just a new set of metrics; it also requires the mindsets LCAs
to understand the implications and implement the Simplified life cycle assessments (LCAs) and product
strategies. category rules of thumb will enable more informed
decisions. Coupled with scenario analysis and
Through board level strategies on authentic citizen
strategic risk / opportunity assessment, simplified
engagement and life cycle thinking, companies will be
LCAs will allow companies to evolve their business
better prepared to take up the challenge of sustainability.
models as they reorganize, especially in the design
This will require a positive future vision to enable a
phase.
common direction for all employees, consumers and
business partners, embracing closed loop systems and • Choice-editing: making only more sustainable
zero waste as long-term objectives. choices available
It is important to note that there is still much that can be Choice-editing can be done by the industry
done today through business leadership. The business (including retailers) by removing unsustainable or less
innovation to achieve this can be triggered on three sustainable products. Governments can introduce
levels: company-specific, industry-wide and along value roadmaps for elimination of unsustainable products
chains. and can intervene and ban certain less sustainable
products from the market (e.g. China is phasing out
At a company level, CEOs can adopt simplified life
incandescent light bulbs).
cycle assessment at the executive and board level as a
tool for identifying key risks and opportunities by product
or product category. This will also aid strategic decision-
making and communication with stakeholders across
the value chain. This life cycle assessment may integrate
both environmental and financial information, and include
scenario analyses that incorporate future constraints on
resources and market signals such as a carbon price.

6 Moving ahead
Across an industry, actions such as providing a Through company-specific, industry-wide and cross-
common measurement standard for Greenhouse industry strategies, the private sector can continue to act
Gas Emissions, standards for environmental product on the following:
labelling, and improved data sharing along value chains
• Support of consumer-led information
require high-level collaboration between manufacturers
communities
and retailers. These can - among other activities - be
New and strengthened interactions with consumer-
effectively driven through such leading institutions as the
based information communities (e.g. GoodGuide)
Consumer Goods Forum.
will allow new collaborations to take place and
• Standardization of sustainability scorecards evolve. Such interactions will allow for better brand
There remains a need for an agreed set of standards management, increased stakeholder value and the
for sustainability scorecards, as several retailers improvement of data in the sharing of collective
are pushing independent sets of criteria up their resources.
respective supply chains. Ideally, collaboration would
take place at an industry level to create a global set • Mainstreaming of sustainability in financial
of criteria that would set the rules of the game. indexes
Investor and holding company accountability on
• Business association collaboration on measures broader than shareholder return is in its
messaging Business associations have the power infancy. With greater transparency in sustainability
to act as a platform and to engage with their performance and increases in popularity of the
members and influence them in taking specific likes of the Dow Jones Sustainability Index or
actions when it comes to sustainability. This can FTSE4Good, will lead to a greater responsibility for
happen through standardization of messaging, companies to change.
defining performance requirements, sustainability
certification, environmental performance reporting • Creation of a “Life Cycle Mark-up Language”
and community engagement standards. A life cycle markup language could be used to
share outcomes of life cycle analyses along a value
• Labelling: accreditation and certification chain, and would allow organizations to publish the
Instead of confusing the consumer with more life cycle analyses of their products in a machine-
data, it is often more effective to target the values readable format, leading to system-to-system
of a consumer through a label of environmental or communication.
social assurance (e.g. P&G with their future friendly
label, Body Shop and animal testing, or the Fair-
trade label). Use of such labels can help to create 6.3 Leverage Points Requiring Policy
a trust relationship between the consumer and the Innovation
company or sector.
Understanding what it takes for governments to
Along the value chain, leading companies stimulate the business innovation required is key; yet,
representing many sectors will need to work together, most officials are deeply uncomfortable engaging directly
for which effective communication is critical. Companies with business in a coherent, neutral and transparent
can create value chain “visualizations” – visual, dynamic way. This lack of confidence is all the greater where
representations of the value chain (supported by rigorous disruptive business models and associated technologies
supply chain data) where suppliers can see the impacts are involved, exactly where the potential for rapid, scaled
of their design decisions and test changes in behaviour change is most possible. These areas are precisely
or design to examine benefits shared by companies where the World Economic Forum is best placed to act.
across the value chain.

6 Moving ahead
Drawing from the tables in each of the chapters, To make substantive progress, each of these will require
potential leverage points for the Forum to advance unprecedented levels of collaboration. One way to
include the following: explore this deeper is by taking open innovation as an
accelerator and laying it across business and policy
• Targeted green public procurement
boundaries – open public-private innovation. This will
When governments actively source more sustainable
require a blend of competencies, influencing pathways
products and services by changing procurement
and the highest levels of trust.
policies, this creates a market signal for suppliers
who engage with the government. Once the new Through all this, citizens will continue to be the currency
business model is in place to cater to these new of change. The Forum can help catalyse this change on
criteria, it will have a ripple effect within the industry. the operational elements of business strategy and policy
innovation.
• Subsidy reform
Government subsidies that do not discourage
unsustainable patterns of consumption and 6.4 The Policy Innovation Platform
production represent a difficult political obstacle
In 2011, the Driving Sustainable Consumption Initiative
that slows and often blocks progress. This is
enters the second phase of its work with the aim to
compounded by product pricing, which leaves many
engage governments and policy-makers through public-
components of a product’s lifecycle externalized,
private collaboration.
leading to inefficient allocation of resources and
market distortions. Subsidy reform is an important Mandated by CEOs and public officials at the Annual
lever with which governments can “level the playing Meeting 2011 in Davos, the World Economic Forum has
field” and, together with other policy initiatives, created a “Policy Innovation Platform” to explore many of
encourage the creation of markets that price in the above dimensions and supply reliable and unbiased
sustainable behaviours. guidance to advance public policies in a high-trust
environment. Working in collaboration with a coalition of
• Multistakeholder policy design and
interested governments and international organizations,
implementation
including the UN Secretary General’s High-level Panel
Governments that can evolve and enable multiple
on Global Sustainability, effective policies will be
stakeholders to collaborate and take part in
those designed to catalyse transformative business
the design will be essential in securing smart
practices and citizen behaviours aligned to sustainable
policies. The European Food Roundtable on
consumption.
Sustainable Consumption is an ideal example of a
multistakeholder collaboration that is successful in The platform will focus on a small number of policy
influencing a broad range of EU policies. areas highlighted in this report. These might include
creating transparent brands through technology-
• Policy leadership by key countries of influence
enabled networks, developing principles for smarter
Large emerging economies that have greater
subsidy reform, enhancing green public procurement,
leverage for global policy innovation have a growing
or examining how best to encourage and enable waste
sphere of influence (and responsibility) to provide
recycling programmes.
solutions within their own borders but also in sharing
best practices for advancing policies globally.
“We are doing the best we can, and any
• Trade policy aligned to sustainable other innovations will be very much
consumption
National carbon trading and taxation schemes have
welcome. We don’t’ want to see any policy
elevated the debate on trade and the role of the innovation left behind when it comes to
WTO in regard to national environmental measures sustainability It doesn’t help if we work in
and their compatibility with international trade law.
Advancing a coordinated approach on setting
silos. We need policy frameworks that cut
international norms will allow for an acceleration of across issues.”
policy innovation.
– Edna Molewa, Minister of Water and
Environmental Affairs, South Africa

6 Moving ahead
In each policy area, opportunities and barriers for

sustainable consumption will be identified, and best
practice across geographies shared. The high trust
environment provided by the Policy Innovation Platform
will allow businesses and governments to engage
directly, candidly identify areas in which policy change
could enable and accelerate sustainable consumption,
and propose mutually beneficial policy development
mechanisms.
The output will be a best practice policy development

toolkit, which would include case studies illustrating
effective policy development mechanisms in specific
geographies and in specific sustainable consumption
topic areas, and the preliminary identification of policy
areas in which continued government-business
collaboration could create mutual value. The value
to business would be the development of pathways
to overcome barriers to achieving more sustainable
operations, while governments would develop a
support network of trusted organizations and be better
positioned to deliver competitive value at the national
level. Ultimately, the goal will be to define a more holistic
approach to policy-making by introducing different
engagement models that demonstrate win-win situations
for all stakeholders and encourage holistic thinking.
The intent of the proposed Policy Innovation Platform

is to shake up the system of policy-making to enable a
transformational shift towards green business-friendly
policies. Initiated, incubated and facilitated by the World
Economic Forum, such a platform would be expected to
have a finite lifespan of two years. There would be every
hope and expectation that the Policy Innovation Platform
would cascade and over time become self-facilitating,
requiring diminishing input from the World Economic
Forum. Engaging deeply with two or three governments
will be essential to build this momentum and form a
continuous dialogue between stakeholders involved in
this process beyond the Annual Meeting 2012.
To most effectively implement this new platform, a

series of dialogues and workshops will take place in
the World Economic Forum events throughout 2011.
Key to the success of such a proposal will be getting
the right people involved, both in terms of position and
propensity. The World Economic Forum looks forward
to catalysing this challenge with CEOs from a range of
companies, as well as with heads of state and ministers
from progressive governments.

7 Conclusion
This report contains a wide range of suggestions for bringing together a subset of stakeholders from multiple
taking the issue of sustainable consumption from a industries, geographic regions and expert perspectives,
business imperative and vision to a tangible set of the challenge of sustainable consumption requires
actions. collaboration between consumer voices, businesses
and policy-makers from around the world on a far larger
Building trust with consumers and engaging them scale.
as citizens in the context of sustainable values is
one important step in this process. There are also The Policy Innovation Platform will be an important
myriad opportunities for individual firms and industry step in this process. The Forum’s regional events
associations to take steps to shift mindsets and embed will provide the physical and intellectual basis for this
life cycle thinking in the “DNA” of organizations and to be developed over the coming year. Through its
entire industries. Achieving these will require the support Sustainability Initiative and ongoing work, the Forum
of innovative policy environments that make use of continues to be committed to realizing the promise of
progressive and well-designed market mechanisms, sustainable consumption.
regulation, incentives and education programmes.
However, as many experts have emphasized,

implementing these ideas is neither straightforward
nor costless. The way forward involves far greater
collaboration to share the best insights and policies as
well as sharing the cost of transforming systems to be
truly sustainable. While this project has succeeded in

8 Annex
A. Inventory of Life Cycle Tools
The strategic use of life cycle assessments (LCAs) can be instrumental for
the long-term success of an organization; however there are a multitude of
softwares, labels and platforms that exist for companies and individuals to
use. This inventory aims to illustrate some common and emerging product
specific tools for life cycle metrics and highlights how they can be used
and differentiated (other tools that focus more on organizations have been
omitted, such as the Carbon Disclosure Project).
As in Chapter 3, the set of life cycle metrics initiatives can be classified along
two dimensions. On one axis, the use of life cycle metrics can be classified
as passive or active, with active use of LCMs implying their application to
business models as a whole. On a second axis, the use of life cycle metrics
can be classified as principally for internal use, or also for the purposes of
external collaboration along the value chain.
Those two dimensions define four quadrants, as demonstrated on page 29:
1. Life Cycle Assessment: Tools (and software) to perform life cycle
assessments
2. Life Cycle Information: Certification partners and labels
3. Life Cycle Strategy: Life cycle tools and standards that enable reporting,
benchmarking and collaboration
4. Life Cycle Collaboration: Life cycle initiatives on strategic engagement
with consumers
1. Life Cycle Assessment: Tools to Perform Life Cycle Assessments
This selection includes Earthster, an innovative open source tool that enables
life cycle assessments (LCA) across supply chains, SimaPro and GaBi, which
are common softwares to perform LCA, and the Ecoinvent Centre that is the
world’s leading database of life cycle inventory data.
The Ecoinvent Centre The world’s leading database with consistent and transparent, up-to-date life cycle
www.ecoinvent.ch inventory (LCI) data, containing more than 4.000 LCI datasets covering several
business areas. The LCI datasets are based on industrial data and have been
• Non-profit organisation compiled by internationally renowned research institutes and LCA consultants.
• Multi-impact assessment The data is compatible with all major LCA and eco-design software tools.
SimaPro 7 SimaPro is a professional LCA software tool that contains several impact
www.pre.nl/simapro assessment methods and several inventory databases (including Ecoinvent),
which can be edited and expanded without limitation. It can compare and
• Private software supplier analyse complex products with complex life cycles. SimaPro and GABI are the
• Multi-impact assessment most commonly used software and approximately share the market.
GaBi 4 An all-in-one software tool for modelling products and systems from a life cycle
www.gabi-software.com perspective. It contains databases with worldwide coverage as well as the Ecoinvent
database. Different versions are available, ranging from an educational to a
• Private software supplier professional use of life cycle analysis that can evaluate life cycle environmental, cost
• Multi-impact assessment and social profiles of products, processes and technologies. SimaPro and GABI are
the most commonly used software and approximately share the market.
Earthster Web-based tool for tracking environmental and social data, for turning them into
www.earthster.org life cycle assessments and for sharing this information across supply chains.
Earthster will build an open data commons for sustainability information that
• Non-profit organization will provide an easy LCA entry for small and medium size companies It is being
• Multi-impact assessment piloted by Wal-Mart, Seventh Generation and Tetra Pak.
• Open source platform

8 Annex, Inventory of Life Cycle Tools
2.Life Cycle Information: Certification Partners and Labels
Currently, more than 360 eco-labels have been identified globally; therefore
this is a sample selection of certification partners and the labels they offer.
At the moment, several labels are being developed at a country level,
while some are appearing at regional levels, such as Energy Star and the
European Union Eco-label. New labels range from either quantifying a single
attribute (e.g. carbon emissions) to having a more global life cycle view where
both the environmental and the social impacts of a product are taken into
consideration59.
Carbon Label The Carbon Reduction Label helps educate the consumer as to which products
www.carbon-label.com are working on reducing their carbon footprints. Brands that want to “wear” the
label are required to calculate the exact footprint of their product in accordance
• Non-profit organisation to the PAS 2050 standard. This standard was developed in 2007 by the Carbon
• Single-attribute label Trust in partnership with the United Kingdom Department for Environment, Food
and Rural Affairs (DEFRA) and BSI British Standards.
Energy Star Energy Star is a labelling program designed to identify and promote energy
www.energystar.gov efficient products to reduce greenhouse gas emissions. Energy Star provides a
trustworthy label on over 60 products for the home and office. These products
• Government supported deliver the same or better performance as comparable models while using less
• Single-attribute label energy and saving money. Joint programme of the US Environmental Protection
Agency and the US Department of Energy.
People 4 Earth The People 4 Earth Sustainability Index is a visual representation of how well a
www.people4earth.org product meets the standards’ criteria which may be used on the product itself
as a label, on the company website or anywhere the product is depicted. The
• Non-profit organization standard behind the sustainability index is built on four pillars of sustainability
• Multi-attribute label that fall into two broad headings: PEOPLE and EARTH. The four pillars are:
PURE, FAIR, LIFE and RENEW. Remains to reach adequate scale for high
impact.
USDA Organic Label Accreditation for private businesses, organizations and state agencies to certify
www.ams.usda.gov/AMSv1.0/nop producers and handlers of agricultural products according to the National
Organic Program regulations. Products labelled as “100% organic” must contain
• Government Supported only organically produced ingredients and processing aids (excluding water
• Single-attribute label and salt). Products labelled “organic” must consist of at least 95% organically
produced ingredients (excluding water and salt).
European Union Eco-label A voluntary scheme by the European Environment Commission to encourage
www.ecolabel.eu businesses to market products and services that are kinder to the environment.
The Eco-label criteria is based on studies that analyse the impact of the product
• Government Supported or service on the environment throughout its life cycle, starting from raw material
• Multi-attribute label extraction in the pre-production stage, through production, distribution and
disposal.
Cradle to Cradle ®
Cradle to Cradle models a holistic economic, industrial and social framework
www.mbdc.com that seeks to create systems that are not just efficient but essentially waste-free.
Concerns have been raised by experts and LCA practitioners in regard to the
• Proprietary methodology practicability of the concept, the technical implementation and the claims around
• Private consulting structure recycling that need to be further reviewed. One should consider its use in
• Multi-attribute label tandem with more quantitative and more adapted tools regarding product types.

3. Life Cycle Strategy: Life Cycle Tools and Standards that enable Reporting,
Benchmarking and Collaboration
In this quadrant, we can find initiatives meant for developing standards for
reporting, such as ISO, and those can most of the time be used as a way of
benchmarking the environmental performance of companies. Ultimately, new
initiatives are being developed that will allow different players in the supply
chain to share their life cycle information and engage in innovation and
collaborative thinking.
International Organization for International standard-setting body composed of representatives from various
Standardization (ISO) national standards organizations. ISO has recently launched the ISO 26000,
www.iso.org a new guidance standard on social responsibility. ISO 14040:2006 describes
the principles and framework for life cycle assessments, while ISO 14044:2006
• Network of nat’l standards specifies requirements and provides guidelines for LCAs.
institutes
• Proprietary
The Greenhouse Gas Protocol The GHG Protocol is the international accounting tool, created by the
www.ghgprotocol.org World Resources Institute and the World Business Council for Sustainable
Development, designed to understand, quantify and manage greenhouse gas
• Non-profit support emissions. In November 2010, WRI and WBCSD released the second draft of
• Single-attribute standard the new GHG Protocol standard for Product Accounting and Reporting. “The
primary goal of this standard is to support companies to reduce these emissions
by making informed choices about the products they design, manufacture, sell,
purchase or use.”
European Food Sustainable Co-chaired by the European Commission, Food SCP aims to establish the food
Consumption chain as a major contributor towards sustainable consumption and production
www.food-scp.eu in Europe. Their key objectives are the Identification of scientifically reliable and
uniform environmental assessment methodologies for food and drink products,
• Government support the identification of suitable communication tools to consumers and other
stakeholders, and the promotion of and reporting on continuous environmental
improvement.
String Together An online traceability service which allows companies within a supply chain
www.stringtogether.com to receive and send complete and accurate traceability information, file
attachments and custom datasets (including certificates, specifications, images,
• Multi-impact assessment video, etc.) relating to any type of product. Designed and developed by Historic
Futures Limited.
The Sustainability Consortium An independent organization of diverse global participants (universities, NGOs,
www.sustainabilityconsortium.org manufacturers, retailers) contributing to a more sustainable world through better
products, consumption and supply chains. They are developing and promoting
• Non-profit science and integrated tools that improve informed decision-making for product
• Multi-attribute tools sustainability.
Global Packaging Project This project, part of the Consumer Goods Forum sustainability pillar, addresses
globalpackaging.mycgforum.com the need in the packaging industry for a common language to enable intelligent
and informed discussion on sustainable packaging. The team working on the
• Industry Association support project includes experts and practitioners across the entire packaging chain:
• Collaboration packaging retailers, manufacturers, converters and associations.
industry

4. Life Cycle Collaboration: Life cycle initiatives on strategic

engagement with consumers
Consumers are getting engaged in new communities to support and enable

change, which then get mobilized by looking for and demanding more
transparent information. The inevitable growth of crowd-sourcing projects
and a growing market segment of consumers focused on health and the
environment will be a game changer for enterprises.
GoodGuide is currently the best case example of a game changing solution

that provides information which allows both consumers and businesses to
better understand products that they respectively consume and produce.
This understanding thereby enables them to change their behaviours and
practices.
GoodGuide GoodGuide provides authoritative information about the health, environmental

www.goodguide.com and social performance of products (personal care, food, household chemicals
and toys) and companies. Their mission is to help consumers make purchasing
• ‘For benefit’ organization decisions that reflect their preferences and values. Companies that engage with
GoodGuide will get a better understanding of their products and consumer
base. Funded by several prominent venture capital funds.

8 Annex, Authors and Acknowledgements
B. Authors and Acknowledgements
World Economic Forum – Project Team and Authors
Randall Krantz Jason Shellaby

Director, Environment Initiatives Project Associate, Environment Initiatives
[email protected] [email protected]
Sarita Nayyar Nicholas Davis

Senior Director, Consumer Industries Associate Director, Scenario Planning
[email protected] [email protected]
Other Forum contributors and reviewers : Belinda Bonazzi, Sebastian Buckup, Nathalie Chalmers, Claire De Araujo,
Helena Leurent, Begoña Martinez, Marcello Mastioni, Kiana Ranjbar, Florian Reber, Bernd Jan Sikken, Dominic
Waughray
Deloitte - Project Advisers
Lawrence Hutter Nick Main

Global Consumer Business Leader Global Managing Director Sustainability
Deloitte (United Kingdom) and Climate Change Services
[email protected] Deloitte (United Kingdom)
[email protected]
Koen De Staercke
EMEA Consumer Products Leader Ralph Thurm
Deloitte (Belgium) Director Sustainability Strategies and Innovation
[email protected] Deloitte (Netherlands)
[email protected]
Peter Capozucca
Sustainability Practice Leader, Consumer Products Laura de Francisco Campillo
Deloitte (USA) Senior Consultant, Strategy & Operations
[email protected] Deloitte (Netherlands)
[email protected]
Thomas Donck (seconded to the Forum)
Senior Manager, Strategy & Operations Kate Martin
Deloitte (Belgium) Manager, Sustainability Services
[email protected] Deloitte (United Kingdom)
[email protected]
We wish to thank Simon Zadek as advisor for the overall Driving Sustainable Consumption Initiative, and in particular
for his leadership on the Policy Innovation work.
Beyond his role as writer of this report, Charles Emmerson has been a valuable contributor to the content and the
structure of this document.

The World Economic Forum would like to extend appreciation to the following for their efforts and
contribution to this report.
To the individual members of the Project Board:
Nigel Morris, Aegis Media Eve Magnant, Publicis Groupe
Frank Clary, Agility Jane M. Hutterly, S. C. Johnson & Son Inc.
Kevin McKnight, Alcoa Kelly M. Semrau, S. C. Johnson & Son Inc.
Kalendu Patel, Best Buy Co. Inc. Andrew Wales, SAB Miller PLC
Bryan Dierlam, Cargill Peter Graf, SAP AG
Howard Pulchin, Edelman Thomas Spiller, SAS Institute
Dan Pettit, Kraft Foods Inc. Mary Coventry, Sealed Air Corp.
John Kornerup Bang, A.P. Moller-Maersk Thomas Lingard, Unilever
Mike Barry, Marks & Spencer Rahul Koul, Wipro
Claus Conzelmann, Nestlé SA Alison Eyles Owen, WPP (Hill & Knowlton)
Hannah Jones, Nike Inc.
Nickie Spile, Novozymes A/S
To the Members of our Consumer Industry Agenda Council:
Helio Mattar, Akatu Institute for Conscious Consumption Hannah Jones, Nike Inc.
Sonia Chapman, BASF SA Olivier M.Weber, PepsiCo Brazil
Kalendu Patel, Best Buy Co. Inc. Peter R. White, Procter & Gamble Technical Centres Ltd
Aron Cramer, Business for Social Responsibility (BSR) Robert Hahn, Sustainable Consumption Institute,
University of Manchester
Mindy S. Lubber, Ceres
Michael Kuhndt, UNEP/Wuppertal Institute Collaborating
Bjarne Pedersen, Consumers International Centre on Sustainable Consumption and Production
John Wilbanks, Creative Commons Jean M. Brittingham, Cambridge Programme for
Sustainability Leadership, University of Cambridge
Natalia Allen, Design Futurist SM
Andrea Thomas, Wal-Mart Stores Inc.
Ted Howes, IDEO Inc.
Liz Goodwin, WRAP

Additionally, thanks are due to the wide network of experts from business, the public sector, academia and civil
society that have participated in our workshops and events and who have contributed to discussions and interviews.
This list below is alphabetical with affiliations at the time of consultation:
Graham Allan, Yum! Restaurants International Richard W. Edelman, Edelman

Dan Ariely, Author Iftekhar Enayetullah, Waste Concern
Dan Atkins, Shaper Group Andrew Erratt, Cisco Systems
Matthew Ayres, Lend Lease James Farrar, SAP AG
Mark G. Barthel, WRAP Alyssa Farrell, SAS Institute Inc.
Christophe Beck, Ecolab Inc. Mike Faupel, The Sustainability Consortium
Martha Bejar, Wipro Technologies Mark Fookes, GPT Group
Sylvie Benard, LVMH Moët Hennessy - Louis Vuitton Ralf Frank, DVFA
Uwe Bergman, Henkel AG & Co. KGaA Peter Glazebrook, Rio Tinto
Michael Biddle, MBA Polymers Inc. Jay Golden, Duke University, Nicholas Institute for
Darren Bilsborough, Parsons Brinckerhoff Environmental Policy Solutions
Keith Bishop, OneSteel Dan Goleman, Author
Olle Blidholm, IKEA Group Ron Gonen, RecycleBank
Michael Blowfield, London Business School Brad Gordon, Intrepid Mines
Tim de Boer, Ketchum Pleon Kelly Groehler, Best Buy Co. Inc.
Chris Bradshaw, Autodesk Inc. Jochen Guntrum, METRO AG
Charlie Brown, Nike Inc. Martin C. Halusa, Apax Partners LLP
Andrea Brown, World Business Council for Sustainable Harish Hande, SELCO Solar Light (P) Limited
Development (WBCSD) Anna Harper, Cultural Shapeshifters
Mary Capozzi, Best Buy Co. Inc. Joergen Ole Haslestad, Yara International ASA
Arne Cartridge, Yara International ASA Raji Hattar, Aramex
Scot Case, UL Environment Inc. William V. Hickey, Sealed Air Corp.
Jorge Casimiro, The Coca-Cola Company Cheryl Hicks, UNEP/Wuppertal Institute Collaborating
Jeff Chahley, Kraft Foods Inc. Centre on Sustainable Consumption and Production
Ed Chan, Wal-Mart China Bill Hoffman, Best Buy Co. Inc.
Dan Cherian, Nike Inc. John Hontelez, European Environmental Bureau (EEB)
Henry Chesbrough, University of California, Berkeley Dieter Horst, World Business Council for Sustainable
Development (WBCSD)
Jason Clay, WWF
Del Hudson, Nike Inc.
Dave Cobban, Nike Inc.
Truus Huisman, Unilever
Maurie J. Cohen, New Jersey Institute of Technology
Joichi Ito, Creative Commons
Cristóbal Conde, Sungard
Mohammad Jaafar, The Kuwaiti Danish Dairy Company
David Cook, The Natural Step
KCSC
Sebastian Csaki, LVMH Moët Hennessy - Louis Vuitton
Richard A. Jefferson, Cambia
Claire Davies, Hill & Knowlton
Elizabeth Keck, Wal-Mart Stores Inc.
Christopher Deri, Edelman
David W. Kenny, VivaKi
Tonny Dierckx, SAS
Frank Kirkhaar, Aegis Media
Paul Dobson, Deloitte
Andrea Koerselman, IDEO Inc.
Erin Dobson, Nike Inc.
Maja Kuzmanovic, FoAM
Sally Domingo-Jones, Hill & Knowlton
Kelly Lauber, Nike Inc.
Renaud Dutreil, LVMH Moët Hennessy - Louis Vuitton
Jerry P. Leamon, Deloitte
Cashion East, The Sustainability Consortium
Jim Leape, WWF

Tristan Lecomte, Alter Eco Ruth Rawling, Cargill

Wolfgang Lehmacher, Formerly GeoPost Intercontinental Gee Rittenhouse, Alcatel-Lucent
SAS David G.Rosenberg, Hycrete Inc.
Chris Librie, S. C. Johnson & Son Inc. Paul Rowsome, Groupe Carrefour
Ernst Ligteringen, Global Reporting Initiative (GRI) Chip Salyards, BMC Software Asia Pacific Pte Ltd
Jack Linard, Unilever United States Inc. Per Sandberg, World Business Council for Sustainable
Eugenio Longo, Sealed Air S.r.l. Development (WBCSD)
Michael Lopez, Alcoa Anthony Scaramucci, Challenger Financial Services Group
Robert Madelin, Information Society and Media (INFSO) Urs Schenker, Nestlé SA
Afzaal Malik, The Coca-Cola Company Birgit Schleifenbaum, Firmenich SA
Armineh Mardirossian, Woolworths James Scott, Metro Cash & Carry International GmbH
Ken Martchek, Alcoa Dov L. Seidman, LRN
Hans-Juergen Matern, METRO Group Sandra Seru, Diageo Plc
John Mayerhofer, SAP AG Andrew Shapiro, GreenOrder
Doreen McIntire, WRAP Paul Simshauser, Australian Gas Light
Malini Mehra, Centre for Social Markets (CSM) Anneke Sipkins, People4Earth
Andrea Moffat, Ceres Stuart Smith, Hill & Knowlton
James Moody, Commonwealth Scientific and Industrial Chris Smith, Procter & Gamble
Research Organisation (CSIRO) Chris Soderquist, Pontifex Consulting
Guy Morgan, Business for Socal Responsability Marion Sollbach, METRO AG
Lars Mortensen, European Environment Agency Steven P. Stanbrook, S. C. Johnson & Son Inc.
Frans W. Muller, METRO AG Mark Stavro, Bunge Limited
Robin Mürer, Apax Partners LLP Anna Swaithes, Kraft Foods Inc.
Karen Myers, CA, Inc. Don Tapscott, nGenera
Fernando Nilo, RECYCLA Chile SA Virginia Terry, Business for Social Responsibility (BSR)
Gregory A. Norris, Earthster (New Earth) Burcu Tuncer, UNEP/Wuppertal Institute Collaborating
Richard O’Brien, Newmont Mining Corporation Centre on Sustainable Consumption and Production
Andrew Ogilvie, Nike Inc. Gregory Unruh, Thunderbird School of Global Management
Velaça Olivier, World Business Council for Sustainable Vijay Vaitheeswaran, The Economist
Development (WBCSD) Miguel Veiga-Pestana, Unilever
Leon Olsen, Deloitte Rutger Verkouw, Global Reporting Initiative (GRI)
Dara O’Rourke, GoodGuide Lorrie Vogel, Nike Inc.
Reed Paget, Belu Water Casey Wagner, Alcoa
Nick Palousis, Shaper Group Mike Wallace, Global Reporting Initiative (GRI)
Jules Peck, Abundancy Partners Stewart Wallis, New Economics Foundation
Francis-Luc Perret, Ecole Polytechnique Fédérale de Ryan Whisnant, Sungard
Lausanne (EPFL)
Joris Wiemer, Global Reporting Initiative (GRI)
Keith Perrin, Autodesk
Roy Woodhouse, Australian National Recycling Company
Yves Pitton, Kudelski Group
Ian Yolles, RecycleBank
Paula Prahl, Best Buy Co. Inc.
Stephen Yucknut, Kraft Foods Inc.
Nadine Pratt, UNEP/Wuppertal Institute Collaborating
Adriana Zacarias, United Nations Environment Programme
Centre on Sustainable Consumption and Production
(UNEP)
Peder Michael Pruzan-Jorgensen, Business for Social
Andrey Zarur, Kodiak Venture Partners
Responsibility (BSR)
Zhang Qi, Nestlé
Fahad Al Raqbani, Abu Dhabi Council for Economic
Development (ADCED) Anthony Zolezzi, Greenopolis
Leo Raudys, Best Buy Co. Inc.

8 Annex, References and Endnotes
C. References and Endnotes
See speech of Professor Sir John Beddington, Sustainable Development UK

1
Conference, March 2009.

Figures are taken from Living Planet Report 2010: Biodiversity, Biocapacity and
2
Development, WWF, 2010.

See Redesigning Business Value: A Roadmap for Sustainable Consumption,
3
World Economic Forum, January 2010, Page 15.

See John Grant, Co-Opportunity, 2010.
4
See Peter Victor, “Questioning Economic Growth” in Nature 2010.

5
See Hazel Henderson and Fritjof Capra, Qualitative Growth, 2009.

6
See The Happy Planet Index 2.0, New Economics Foundation, 2009.
7
8
Talberth, Cobb et al, 2007, World Resources Institute, http://www.oecd.org/
dataoecd/29/6/42613423.pdf.
9
Robert Phillips, Jules Peck. See www.citizenrenaissance.com and see also Tim
Jackson, Prosperity without Growth – Economics for a Finite Planet. London:
Earthscan. 2009.
10
See Report by the Commission on the Measurement of Economic
Performance and Social Progress, 2009, available at www.stiglitz-sen-fitoussi.fr.
11
2010 Roundtable on the Measurement and Use of Data on Social Progress
and People’s Well-Being, Remarks by Angel Gurría, OECD Secretary-General
12
See www.grossnationalhappiness.com
13
SERI (Sustainable Europe Research Institute) www.materialflows.net.
14
See www.citizenrenaissance.com.
15
http://www.happyplanetindex.org/public-data/files/happy-planet-index-2-0.pdf.
16
Leverage points concepts by Donella Meadows.
17
http://www.industrialrubbergoods.com/automobile-industry.html
The idea of the “new normal” is defined in detail in Redesigning Business Value:
18
A Roadmap for Sustainable Consumption, World Economic Forum, January

2010, p 17.
Richard Thaler, Cass Sunstein, Nudge: Improving Decisions about Health,
19
Wealth and Happiness, 2008.

20
Source: Deloitte Analysis
21
http://www.recyclebank.com.
22
Source: Deloitte research
See Barry Schwartz, “Designing Policy to Influence Consumers” in The
23
Paradox of Choice: Why More is Less, 2004, p.17.

24
See www.publications.parliament.uk/pa/cm200809/cmselect/
cmenvaud/243/24305.htm.
25
See John Gerzema and Michael D’Antonio, “Spend Shift: How the Post-Crisis
Values Revolution Is Changing the Way We Buy, Sell, and Live”, 2010
See Common Cause: The Case for Working with Our Cultural Values, WWF,
26
2010 and Weathercocks and Signposts: The Environmental Movement at a

Crossroads, WWF, 2008.
27
See www.citizenrenaissance.com.
28
See Edelman Trust Barometer 2010.
See Rachel Botsman and Roo Rogers, What’s Mine Is Yours: The Rise of
29
Collaborative Consumption, 2010.

8 Annex, References and Endnotes
30
The experimental project involves investing the brand in community-building
projects nominated externally and then supported by PepsiCo.
Study conducted by Wieden + Kennedy for Nike, Innovating for a Better World :
31
Global Consumer Voices and Implications, 2010

See ICC Framework for Responsible Environmental Marketing
32
Communications, 2010
33
See Michael Maniates and John M. Meyer, Eds., The Environmental Politics of
Sacrifice, 2010.
34
Corporate Sustainability Initiative, An Overview of Eco-labels and Sustainability
Certifications in the Global Marketplace, October 2010/Consumentenonderzoek
2010 (Consumer Research 2010), Deloitte Netherlands
35
See A New Era of Sustainability, Accenture/United Nations Global Compact,
June 2010.
http://www.metrogroup.de/servlet/PB/menu/1227560_l2/index.html.
36
37
See for example www.nestle-waters.com/environment/nestle-waters-impact/
global-footprint.html.
See ww2.defra.gov.uk/environment/economy/purchasing/
38
Implementation of Executive Order 13514 signed by President Obama on 5

39
October 2009.
See James Bradfield Moody, The Sixth Wave, 2010. Sixthwave.org.
40
See Redesigning Business Value, World Economic Forum, 2010, p12.

41
42
See The Transparent Economy: Six Tigers Stalk the Global Economy and How
to Tame Them, Global Reporting Initiative/Volans, 2010.
See www.interfaceglobal.com/sustainability.
43
See http://business.carbon-label.com/casestudies/Walkers.pd.
44
See Annex 1 for Inventory of Life Cycle Initiatives

45
See the Center for Sustainable Consumption and Production’s Sustainability

46
Hot Spot Toolbox, Supporting Policies for Business Strategies towards

Sustainable Consumption, 2010.
See www.ahold.com/node/3260.
47
http://www.lca-center.dk/cms/site.aspx?p=378.
48
See http://www.dsm.com/en_US/downloads/sustainability/triple_p_2009_en.pdf.
49
See www.carbontruststandard.com/pages/sme.
50
The Sustainability Consortium, see http://www.sustainabilityconsortium.org/

51
See Henry Chesbrough, Open Innovation: The New Imperative for Creating
52
and Profiting from Technology, 2003.

53
For more information, see UNEP case study, Sustainable Environmental
Education in the Kyrgyz Republic.
See gpnindia.org
54
www.adcouncil.org.
55
See Jason Potts, Jessica van der Meer, Jaclyn Daitchman, State of
56
Sustainability Initiatives Review 2010: Sustainability and Transparency, IISD,

2010.
See http://www.asiaeec-col.eccj.or.jp/top_runner/index.html.
57
58
Directive 2009/125/EC of the European Parliament and the Council of
21 October 2009, establishes a framework for the setting of eco-design
requirements for energy-using products.
More information can be found at www.ecolabelindex.com.
59

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state of the world by engaging leaders in partnerships
to shape global, regional and industry agendas.
Incorporated as a foundation in 1971, and

based in Geneva, Switzerland, the World
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is tied to no political, partisan or national interests.
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The Consumption Dilemma

Leverage Points for Accelerating Sustainable Growth

Report prepared in collaboration

Updated April 2011

World Economic Forum

Tel.: +41 (0)22 869 1212

© 2011 World Economic Forum

No part of this publication may be reproduced or transmitted

3 Consumers: Changing the Terms of Engagement 13

4 Mobilizing Business Opportunities: Life Cycle Thinking 23

5 Enabling Transformation: Innovation in Public Policy 33

The Consumption Dilemma | 3

Robert Greenhill Sarita Nayyar

4 | The Consumption Dilemma

The Consumption Dilemma | 5

Across the value chain:

How does public policy fit in?

• Target green public procurement, creating new incen-

6 | The Consumption Dilemma

The Consumption Dilemma | 7

we mean by growth. To decouple consumption from

The main criticism of GDP, as a measure, is that it

GPI Per Capita GDP Per Capita

8 | The Consumption Dilemma

The Consumption Dilemma | 9

GDP Resource extraction

2.4 From Incrementalism to Many barriers retard economic transformation or

Figure 5: A hierarchy of the effectiveness of leverage points – places to intervene in a system16

High Leverage The Ability to Change Mindsets

•The power to transcend paradigms

Understanding the Goal of the System

The Rules that Set up the System

•The power to add, change, evolve, or self–organize system structure

Drivers of the System

•The structure of information flows

Parameters of the System

•The structure of material stocks and flows (such as transport networks)

10 | The Consumption Dilemma

This report focuses on three sets of stakeholders, and

There are examples, of course – services like Netflix

But how might we start with designing for experience

The Consumption Dilemma | 11

• Emotional: Beliefs, emotions, brand image,

The issue may be as much about where consumers are

The Consumption Dilemma | 13

3.2 Rethinking How to Engage Recycling Incentives to Motivate the Consumer

Using RFID technology, RecycleBank can track

14 | The Consumption Dilemma

3.3 From Behaviours to Values Women as ambassadors of the cultural imperative

The Consumption Dilemma | 15

Engaging consumers as citizens is the reverse. It will

16 | The Consumption Dilemma

3.5 A New World of Consumer 3.6 Engaging for Change

Sustainability has a strong role to play in the new world

The Consumption Dilemma | 17

long after it. At the same time, active citizens provide

• Companies can have an opportunity to lead rather

• Both governments and companies have a role