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SB’19 Paris, Day 2:
Virtuous Value Chains, Next-Gen CSR and Redesigning the #GoodLife

Our second day in Paris was chock-full of rich panel discussions with brands trading stories of the evolution of ideas and lessons learned — and still to be learned — on the long, windy road to creating a sustainable consumer economy.

By Tom Idle and Sustainable Brands | Published 5 years ago | About a 14 minute read

Image: Pierre Blaché

Businesses can help people live a good life. But what does that really mean?

An underlying and ongoing theme of this and other Sustainable Brands events around the world — how to help people lead “the good life” — took centre stage once more here in Paris.

As session moderator Rob Cameron, CEO at the advisory firm SustainAbility, said in opening the conversation, money is often a key to unlocking happiness and helping people to lead a good, healthy and sustainable life. For centuries, companies have worked tirelessly to develop products that can be manufactured and sold in a way that is economically sustainable for the business, and affordable for the consumer.

But, as Giulio Bergamaschi — global president of Biotherm, part of the L'Oréal Group — asked: In a new context of resource scarcity, global warming and mass biodiversity loss, can the planet afford affordable products?

It has been a key factor in the success of Biotherm, a business with moisturising products built on one key ingredient which is both natural and scarce: Plankton. Back in 1952, the business found a way of taking plankton from the sea, and applying a bio-fermentation process to it in the laboratory that multiplies and amplifies it.

“We used science and innovation to take something natural and make it widely available without causing any harm,” Bergamaschi said. “You can’t be truly affordable if you’re not affordable for the planet. And you can’t just think about the cost to the company. You must also think about the cost to society and the planet.”

Listening to customers’ concerns and demands in terms of social and environmental issues can be used to “bring you up” and help to create positive change, he added. “We have to use the influence of our customers to help us improve.”

Fellow panelist Alicia Combaz agreed: Citizens have more power to participate in helping to get things done that will help them to lead a happier life.

The organisation she co-founded, make.org, is built on the fundamental belief that politics is not enough anymore to drive real action. Instead, it asks individuals to submit ideas as part of mass consultations. This can throw up a range of things they want to change in the world – from access to healthy diets, to the end of violence against women – and asks its huge community to collectively build a plan to make things happen.

“There is something wrong with our democracies right now. So, we need to take the energies from people to do something for our democracies, to make them sustainable,” she said.

For Joanna Yarrow, head of sustainable & healthy living at IKEA, it is business that has the defining role in allowing people to live better lives. Established 75 years ago, the Swedish furniture store has long held a vision of creating better lives for normal people by selling them affordable products. The company’s Live Lagom project, which helps customers and staff make small changes to how they live their lives that will make them – and the planet – happier, embodies this vision well.

Yet surprisingly, Yarrow revealed that IKEA products are only “affordable” to a quarter of people in the markets where it has stores. This has prompted the retailer to devise new ways of transacting with customers by rethinking ownership, sharing or leasing products, and providing services rather than simply selling people more stuff.

But this journey demands a new narrative, she asserted.

“In the 21st century, it is very clear that sustainable living cannot be a luxury. If it’s niche, or elite, or for ‘the few’, we are not going to be sustainable,” Yarrow said, adding that radical changes are needed within business over a very short period of time. “We need to widen the conversation, make it relevant, attractive and affordable – at a scale and speed we could not have envisioned even five years ago.”

Bergamaschi agreed, highlighting the specific challenge of making sure that consumers in Asia – where much of the economic growth will come from in the future – see sustainable products as desirable.

CSR … Sustainability … Purpose: What’s the difference and why does it matter?

CSR has long held different meanings for different organisations. For many, it started as a separate programme, to generate social or environmental benefits in the areas in which the company operated, but was separate from its core business activities.

At a roundtable discussion during Wednesday morning’s Fair and Inclusive session, Virginie Helias, Chief Sustainability Officer at P&G, claimed the very title of CSR causes a problem. She explained: “‘Corporate’ sounds disconnected from the business and the brands; ‘Social’ suggests philanthropy, which is not sustainable; and ‘Responsibility’ means it is the right thing to do, but according to who?”

Borne out of a sense of responsibility, it is no surprise that CSR has such a responsibility focus. Thomas Kolster, CEO and founder of Goodvertising, claims that this is the difference between CSR and sustainability: “CSR is stuck in the responsibility framework, whereas sustainability is about possibility.”

Andrew Wilson, Executive Director of Purpose at Edelman, asserted that it is not a case of CSR being wrong, rather that it has not done enough: “CSR is necessary but not sufficient. We now have unprecedented levels of urgency, with a dramatic shift in power and politics, so that business has to change.”

An imperative for this change is speed, Kolster said: “What young people want is for change to happen much faster. The new leadership is moving from being a missionary to an enabler. Most of the company commitments to achieve something by 2030 or 2040 are not moving fast enough.”

As sustainability becomes embedded into core business operations, the focus for engaging with consumers has shifted to purpose. Wilson explained how he helps brands identifies purpose. “I ask companies, ‘What would the world miss if you weren’t here? What is your unique contribution?’ Purpose should be the intersection of your business strategy, your impact on people and planet, and your ability to bring change. If all three are aligned, you have a strong sense of purpose.”

The next stage is to extend a company purpose to individual brands. Helias said: “We have just launched Ambition 2030, aiming to enable and inspire positive impact on the environment and society — for example, by asking consumers to reduce their carbon footprint. Each of the brands are defining their own ambition. Herbal Essences’ ambition is to enable people to experience natural products and protect biodiversity. The brand is endorsed by Kew Gardens, the world leader in botanical science, which is important to provide tangible proof of becoming an agent of change.”

Tangible proof includes action — not only words — towards supporting people to adopt a more sustainable lifestyle. REI first took the decision to close all of its stores on Black Friday in 2015, launching the #OptOutside campaign. Wilson viewed this as a great example of living purpose: “They knew that consumers had bought their stuff and instead of encouraging them to buy more, they encouraged them to go outside and use it. They didn’t name the enemy. They just said, “Let’s go outside and enjoy ourselves’.”

So, does purpose mean that all companies now have to become activists?

Kolster disagreed: “I don’t agree with activist brands. Sustainability is about inclusion, not exclusion. Brand activism is a hero trap. Nike and Apple can break any rule in the marketing rule book because they are that brand. Don’t ever copy the legends.”

Purpose, therefore, goes beyond what companies can do to make their products sustainable and is more about helping consumers make their lives more sustainable.

Kolster said: “The question of who can help customers becomes so pivotal. The greatest achievement is to get people to change their behavior — making the consumer the hero, not the brand. Looking at people’s lives is the secret to building strong purposeful brands.”

Supporting consumers with their sustainable purpose is a more personal extension of ensuring responsible business. However, as with CSR and sustainability, the interesting question remains: How do you measure the impact of purpose?

It’s Time to Start Loving Waste, Not Hating It

Tom Szaky, the shaggy-haired, enigmatic founder of TerraCycle, made a really good point as the afternoon’s first Virtuous Value Chain session kicked off here at Sustainable Brands Paris.

Addressing the packed auditorium, he asked: “How many of you here dreamt about working in garbage when you left school?”

The absence of hands being held aloft raised an interesting point about our relationship with rubbish, and the lack of creative and innovative minds that have been applied to solving the world’s waste problems.

“We’re built to be repulsed by waste, so nobody ever wants to work in it,” he said. “But it’s the only industry that will own everything soon — everything you see, from the floor, to the lights, to the clothes you’re wearing; it will soon be the property of the garbage industry.”

The fireside chat and roundtable discussion that followed was thankfully stuffed full of innovation.

Virginie Helias, P&G’s chief sustainability officer, took to the stage for an impressive double act presentation with Szaky, in which they presented the newly launched Loop project.

Co-developed by the consumer goods giant and TerraCycle, Loop is a shopping platform that enables people to buy everyday daily items in packaging that is durable and recycled. Operating on a subscription model, users simply send back their used packaging and replenish their shampoos, washing tablets, etc as and when they need them: “It builds on the idea of the milkman who would deliver reusable bottles and then pick them up to be refilled. Well, Loop is the milkman reimagined for consumables,” Helias said.

Just like the milkman, Loop cleans the empty packaging you send back so it’s ready for reuse, instead of ending up as waste after a single use.

Clearly excited to be able to work with a giant business such as P&G to really make such a system work, Szaky said Loop challenges the concept of ownership. “You buy shampoo, but you also get a bottle that you don’t want,” he said. “Yes, reuse is about durability when it comes to packaging. But it’s also about great design.

“Plastic is not the evil. The evil is using something once.”

Loop has been a real journey for Helias and her team. She needed external advocates to sell the concept internally and win support. “We took Tom on a tour of the company, going into each business to explain the idea,” she said.

Then, making a public announcement as to its ambition – at the World Economic Forum in Davos – created a real sense of urgency. “We researched the idea behind Loop with consumers for two years,” Helias explained. “This is about reinventing consumption. We’ve made it responsible, but also irresistible. Now, we want more brands to join in.”

Next, it was adidas’ turn to present its own innovation in solving the waste challenge. Alexis Olans Haass, the company’s director of sustainability for global brands, held in her hand an early version of a new FUTURECRAFT trainer. Unlike other similar products that are made from 12 different types of material in 70 different parts, this new product is made of just one: a version of thermoplastic polyurethane, or TPU.

And that’s because adidas wants to create a truly circular trainer, with each new pair made from the last. It’s not quite there yet, as Haass refreshingly admits, as the company tries to increase the percentage of recycled material going into the production. But to make the product work and to get it onto shelves, a new business model is required, as well as a different mindset from consumers.

“The word ‘education’ sounds parochial, but creating a new business model will include education of consumers,” she said. “It’s more about creating incentives, so that people have continuous reminders and the right information to make it easier for them to send their trainers back to us, so that we can reuse the material. It needs to land as a concept with Average Joe.”

In wrapping up, Szaky made the point that waste infrastructure must also play catch up: “We need recyclers to want the shoes — not just for recycling of these materials to be technically possible, but also practically possible.”

How to value, and identify, the virtuous value chain

When it comes to virtuous value chains, it appears the virtue can be identified in a variety of ways. The ‘How to value the virtuous’ roundtable on Wednesday afternoon introduced three concepts of virtuous value chains, from the historical, to the technological, to virtue being the reason for existing at all.

According to Ynzo van Zanten, Choco Evangelist at Tony’s Chocolonely, at his company the virtue existed before the value chain. He said “The company’s mission is to make an impact, and chocolate is just the way we choose to do it. We are not a chocolate maker. Callebaut makes the chocolate. We are an impact maker.”

Launched 14 years ago in the US, Tony’s Chocolonely chocolate is made by Swiss chocolate maker Barry Callebaut, with cocoa beans from Tony’s Chocolonely partner co-operatives in Ghana and Cote d’Ivoire. It is marketed solely on its mission: Together, we make 100% slave free the norm in chocolate.

van Zanten confirmed: “We only do marketing towards our mission or purpose. We want people to get triggered by what we are about.” Empowering people to believe they can make a difference, the company’s website calculates how many cocoa beans are in each chocolate bar, to help illustrate the impact a purchase has made.

Providing an example of a more historical virtuous value chain, Carlo Galli, Head of Sustainability at Nestlé Waters, spoke about the history of preserving water resources. He said: “The brands are historical brands, like Perrier and San Pellegrino. For years, it’s been about sustainably managing the water resources. When you manage a water source for so many decades, you have to transfer the knowledge from person to person. This is the concept we have to sell to the consumer.”

Galli stressed that while a single company can achieve water management, water stewardship is an inclusive stakeholder approach. He explained: “The story started when we understood that working on efficiency in our factories was not enough. We discovered that we should be more collaborative. We saw an opportunity with the Alliance for Water Stewardship (AWS), created a common language for water stewardship, and committed last year to be AWS-certified through all our factories.”

Poignantly, the roundtable was held on Fashion Revolution Day, the six-year anniversary of the Rana Plaza factory collapse in Bangladesh, which killed 1,138 people and injured another 2,500. That led to the Fashion Revolution campaign, urging consumers to ask brands, ‘Who made my clothes?’

Neliana Fuenmayor, founder and CEO of A Transparent Company, recognises the activism amongst young people. She said: “We are seeing this urgency, where digital natives are using the power they have of the internet and the phone in their hand. They are saying, ‘We are not going to wait until we have jobs and titles to change the world — we are going to do it now’.”

Fuenmayor brought her experience in technology to fashion supply chains. She said: “Having been involved in tracking fish on blockchain, I decided to bring this to fashion. In 2017, we tracked the first garment on blockchain to see how it could help transparency. It took at least a year for the fashion industry to take it in. Now, there are a few pilots happening in organic cotton. We believe blockchain can help data be verifiable.”

For Fuenmayor, it’s about remembering the three T: “Traceability, transparency, to gain trust. Brands are always looking to gain trust. For traceability, you need the information to be verified. If you are tracking from a cotton seed to the final T-shirt, you need smart labels to prove this. At the retail stage we use QR codes, and in two years’ time we will see more of contactless.”

Three approaches for three industries, all seeking to achieve a virtuous value chain.

Tom Idle

Content creator extraordinaire.

Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.