Corporate sustainability in 2017

I’m in the jury for the ‘Best Swedish Sustainability Report’ award and we are announcing the 2017 winner tomorrow. Because of this jury work, I have been reading a lot of sustainability reports this summer and see some current trends.

On the positive side, companies increasingly work with sustainability in their core operations. Compared to when I started my research in this area eight years ago, there is much less reporting on how much money companies give to charities. These days, companies understand that their main focus should be on the social and environmental impact of their business operations. This is where they can really make a difference. Anyone can give money to a charity, but only the company can make demands on its suppliers and reduce the carbon footprint in the operations.

Another trend is that companies increasingly connect their work to the UN sustainable development goals. This can of course be seen as a way for companies to ‘glorify’ their work. Nevertheless, the UN goals may help companies to think about the global challenges and their role therein. It’s a way to connect everyday work to a bigger picture. Similarly, some companies describe how their work contributes to the Swedish state’s sustainability plan ‘Agenda 2030’ (which, in fact all Swedish state-owned companies should do).

Still, there is more work to be done. Sustainability, in its essence, is about the long term perspective. According to the 1987 definition, it’s about future generations. In this respect, the old criticism that companies’ sustainability reports are not really about sustainability at all is still valid. When you set goals for 2020 you are not considering future generations. When you mainly report what you did last year you do not see the longer time perspective. As a company you should ask how your business operations will affect the life conditions of future generations. If there is no unpolluted water left, how will it affect future generations? No biodiversity? Unfortunately, very few companies think in terms of such time perspectives (yet).

Still, there are reasons to be optimistic. A few companies stand out and show that things can in fact change fast. Swedish textile company Ellos isn’t known for their sustainability work. However, in two years they have gone from sourcing only conventional cotton to 46% ‘better’, organic or recycled cotton. By 2020 it should be 100% and, at this pace, they will definitely make it. If all companies went from 0 to 50% in one to two years it would help the environment tremendously.

From 2018, all large Swedish companies will report on sustainability (a Swedish adoption of the EU directive). I am excited to see how this will affect business practices.

 

Is expensive fashion more sustainable?

You might, as I once did, think that you avoid the sustainability issues in fashion because you don’t shop at H&M, Gina Tricot, Dressman etc.

The short answer is no, expensive fashion is not necessarily more sustainable. Luxury production in Europe should guarantee better working conditions and less chemicals, but only a few luxury brands still produce in Europe. Those who do might only produce certain parts of the collection in Europe. And ‘Made in Italy’ can these days mean made by Chinese in Italy. Even when something is made in Europe, the fabric may be imported. Luxury brands often source their materials from outside of Europe and then we have the issues with conventional cotton and synthetic fibre etc.

There are also environmental issues with the chrome and heavy metals involved in tanning of leather. If you do want a new luxury bag, check where the leather came from, that it can be tracked to sustainable farming, and for vegetable tanning. I found that Swedish brand Palmgrens had a longstanding relationship the Italian farm the leather derived from and used vegetable tanning processes for a certain bag. Thus it’s the last bag I’ve bought, before my current year of no-shopping, and I don’t feel I compromised on design just because I focused on sustainability.

Another issue with luxury brands is that they don’t consider the environmental impact of care. Many put dry cleaning on the care instructions (as on this Ralph Lauren jacket, made in the Philippines) which isn’t environmentally friendly. And, in many cases, the items are better cared for by hand washing. I don’t know how many times the dry cleaner couldn’t remove stains and when I try at home, as a last resort, it works perfectly. Money and chemicals wasted.

The luxury conglomerates seem to lack a thorough understanding of sustainability issues. For example, when LVMH reports on biodiversity, they write about how they finance biodiversity research rather than how they take biodiversity into account in their sourcing of raw materials. Now I am all for funding research, of course, but certain issues we already know a lot about, such as pesticides and biodiversity. We can act on these today.

Similarly, it is admirable that Kering has developed the Environmental Profit and Loss account (which I often teach to students) but more important is how they handle their everyday sustainability challenges. I searched for organic on Kering’s website and only found ‘organic growth’.

Taking the opposite road, many cheap brands are not as diligent about working conditions and where things are made* but are instead rapidly increasing their share of ‘better’ or organic cotton and renewable fibre. They hardly ever prescribe dry cleaning. But then again they don’t make clothes that should last.

Thus while some brands are working on social issues and others focus on some of the environmental, few brands cover all the necessary issues. Those who do are generally those that started their business with a sustainability focus. These brands are generally slightly more expensive than fast fashion but usually much cheaper than luxury brands.

So the answer is no: price is not a good indicator of sustainability.

* The Inditex group (Zara, Massimo Dutti etc. ) is an interesting exception. Around 60% of their suppliers are located in proximity to the headquarters in Spain.

When stakeholders oppose the company’s plans: the case of Schiphol airport

A key part of companies’ sustainability work is to communicate with parties that are affected by the company’s operations. This is generally called ‘stakeholder dialogue’ (see Edward Freeman’s definition from 1984).

Engaging local communities, environmental groups, customers and investors early on may prevent critic, and even boycott, of the business later on, when it might be too late to turn back. It can also provide valuable input and reveal opportunities. However, these different groups can, and most likely will, also have conflicting ideas and needs. So what can the company do when the stakeholders’ demands conflict with the corporate plans as well as with other stakeholders’ needs?

A NHH and CEMS student of mine, Elizaveta Sokolova, wrote her master thesis on precisely this issue. She used the case of the Dutch airport Schiphol and their stakeholders (local residents, regional authorities, the Dutch state, airlines, Friends of the Earth and more) to investigate how the airport handles the conflicting demands. The conflicts concerned for example birds that get in harms way around the airport, access to the airport and noise from the airport. Elizaveta found that even when the stakeholders do not disagree on the final goal, they can disagree on how to achieve the goals.

In Schiphol’s case, the stakeholder dialogue revealed the complexity of the issues. It also created a feeling among stakeholders that the problem is shared and only coordinated efforts can bring a solution. However, when the conflicts were too divisive, the airport decided to end, or at least limit, the dialogue. To read the full thesis, you find it here.

I asked Elizaveta, who also participated in the ‘Measuring sustainability’ course I teach at NHH, a few questions for the purpose of this blog:

You seem to have a keen interest in business and sustainability. What interests you most in this area? 

On the first glance, it seems that sustainability stop business from faster expansion and revenue growth. However, being more conscious of the impact that a business creates on people and environment allows to make the growth more sustainable, less dependent on external factors such as new policies or fuel/electricity/commodity prices. Finding examples of how this idea works in real life is what attracts me the most.

What is the main point we as readers can learn from your thesis?

The Schiphol airport example that I describe in my thesis shows that changing business towards sustainability and including diverse stakeholders for consultations is never easy: opinions vary. However, this approach leads to well-rounded final decision.

Writing the thesis, what was the main learning point for you personally?

For me personally, it was difficult to understand how to find a common ground on an issue when stakeholders’ opinions are literally opposite. The answer is: willingness to compromise and understand the opponent’s concerns.

Now that you have finished your master here at NHH, what are your plans for the future?

Now, when I have finished NHH, I am implementing the knowledge I got about stakeholder engagement in practice: I work at The Global Fund and deal with sustainability and transition. It requires a lot of negotiations and communications with different stakeholders, so the communication experience and theoretical background I got while working on the thesis is very beneficial.

Thank you Elizaveta for sharing your insights and good luck with your new job!

Sweden to become a ‘circular economy’

The Swedish government is investigating how it can promote a ‘circular economy’.  Now, what is a circular economy? While it is not so well defined, I’d say it’s an ambition to keep materials in a loop. Nature tends to work with cycles (the carbon cycle for example). Businesses, the circular economy proponents say, should mimic such systems. In a circular economy,  waste should become input to new production. In addition, there’s the idea that sharing and renting is better than owning things (I’d like to see some evidence for this).

The Swedish government’s investigation into the circular economy resulted in a 400 pages report, released last week. The report suggests tax deductions for rental, second hand and repair services, which sounds like more of what the Swedish government has already done. Other suggestions are for example to increase access to carpools and to facilitate prevention of waste (the latter is always a good idea).

When I encountered the ‘circular economy’ concept, I was initially a sceptic. It might be an academic instinct to question terms the industry has invented. ‘Isn’t this just a new fancy concept for recycling?’. Lately, however, I have slightly changed my mind. The more I learn about the waste issue the more it seems necessary that companies ‘design out waste’ (as the circular economy proponents put it). We need to have a plan for what happens to the materials and products when they are discarded. We need to make sure that our products are safely recyclable and can potentially be recycled more than once. If the circular economy concept is helpful for businesses (or states!) in order to work on these issues, then that’s more important than the lack of definition.

I also find the circular economy system diagram useful. The ways in which materials circulate are put into a hierarchy where maintaining products (such as mending) is more desirable than recycling. This seems very reasonable.

Now my research area is really the measurement of such initiatives. And, as it happens regularly, I got a really good question from a student some week ago: “How can we measure whether a business is circular?”  While businesses are quite different from nation states, the Swedish government’s report has in fact suggested some indicators for whether a country is ‘circular’. The proposed indicators measure the amount of recycled materials, the use of raw materials and the amount of waste produced. These are standard indicators that companies disclose in their sustainability reports. In a business setting, such indicators are nothing new. However, they might be more difficult to calculate on a national level. The government report suggests no indicators for the sharing, renting or repairing ideas of the circular economy.

Clearly, this is an area that needs some more work. Now if the Swedish government would want some help with measuring their circular economy ambitions, I am here to help 😉

A month without shopping

It’s been a month since my no-shopping commitment. Abstaining from shopping has been easy. Possibly because I had already quit habits such as reading fashion magazines and window shopping.

What’s more challenging is to wear what I own. All of it. They say women only use 20 per cent of our wardrobes (some say 30 and others 44 per cent). Supposedly, men are even worse and only wear 13 per cent of their wardrobe. The minimalist and decluttering initiatives tell us that’s a good reason to get rid of the unused 80/70/56 per cent. What they fail to mention is that throwing things out contributes to more textile waste. The longer we wear something, the better it is for the environment.

Personally, since I’m not shopping, I’m stuck with what I have. So if I want variation, I need to wear everything in my wardrobe. I have to turn the 80 per cent that’s currently collecting dust into things more wearable. Fortunately, there are some easy strategies for doing so.

Mending. Somehow I never learnt to properly mend clothes. I do remember my mom mending my torn pants as a kid but I never really adopted this habit myself. Having things mended for you is, sadly, sometimes as expensive as buying new things. Luckily, there are lots of help to be found on the internet. Wornvalues has a great tutorial for mending knits, for example. Katrina Rodabaugh has a tutorial for elbow patches. Cotton and curls for how to remove pilling and removing stains on shoes.

Second life sewing. Clothes beyond repair can be turned into ‘new’ things. Traditionally, we made rugs out of left over textiles. Aiayu, does so with their textile waste. But you can also make clothes. I removed the torn sleeves from a shirt and thus making it sleeveless. Using the left over fabric and another torn shirt, I made Willow tank, for example. All you need to know is how to operate a sewing machine.

Refashioning. For clothes that are wearable but where you don’t like the style or the size, refashion them. Make the hem a bit shorter or cut off the collar. I’ve been following Wornvalues tutorial for making a cardigan out of a former v-neck sweater that I never wear. This way I get a ‘new’ red cardigan without shopping. Cotton and curls have a tutorial for making jeans slightly bigger, which seems useful.

Dyeing. You can simply dye a garment if you don’t like its color. This natural dyeing book is on my wish list. I’m planning to dye a boringly white dress.

Embellishment. One of my new year’s resolutions is to start embroidering. This is a great way to make some garment a little more fun. There are again lots of inspiration on the internet on how to embroider clothes, for example Elisalex of By Hand LondonTessa Perlow or these collars by Nadya Sheremet.

Styling. If truth be told, there are also items that are absolutely wearable as they are but that I still don’t wear (typically stockings with pattern). In these cases, I have to challenge myself to put on the garments that are not in the comfort zone (but that I at some point thought was a good idea). I find that the key is to figure out new combinations. What I would love is some super inspiring blog for how to wear not-so-easy-to-wear things in ones wardrobe. How to combine items we already own but rarely wear to look really stylish. However, the styling blogs and Instagram accounts I encounter typically try to get us to buy things from different brands. There’s just much more available ‘inspiration’ to buy things and so much less for taking care of what you’ve got. But it does exist and the above are some of my favorites.

Got recommendations for blogs that style what we already own or other take-care-of-your-wardrobe tricks? Please share !

Antibiotic resistant bacteria found in children

New research findings this week report that one in five of kindergarten kids carry antibiotic resistant bacteria. This was in Sweden, one of the countries with the lowest antiobiotic use in the world (Norway is one of the few better performing countries). Until now, Swedes could feel safe knowing that relatively low national use in humans and animals is enough to keep antiobiotic resistance at bay.

But we live in a globalised world. Our import of food from countries with extensive use of antibiotics keep increasing. We also travel extensively and pick up resistant bacteria when doing so, particularly if we take antiobiotics in countries where resistant bacteria is common.

There are some aspects here we as individuals cannot control. National and International politics have to work on lowering antibiotics use for example in China and the US.

But there are also things we can do. Antibiotic resistance is one of the most important arguments for buying Swedish or, even better, Norwegian food. While some think antibiotic resistance only concerns meat and is avoided by going vegetarian, unfortunately it is not as easy. All vegetables has to be pollinated and bees used for this purpose are also treated with antibiotics, just like animals. Resistant bacteria are found here too.  So to limit the use of antibiotics and hence resistance, we should buy food from low antibiotics countries. The question is not so much which foods we buy as the amount of antibiotics the producing country allows. 

By importing more and more food from countries with high antibiotic use, as we’ve done the last decades, we contribute to the antibiotic resistance problem.

While it is easy to make conscious choices in the supermarket, a lot of the imported foods are consumed when eating out. We can always ask though, which country the food comes from and let it inform our choice.

Norway this year strengthened the requirement to consider social and environmental aspects in public procurement.  I hope schools, hospitals and public work places will take this opportunity to consider antibiotic use when buying foods for schools and hospitals. Because these are the places that will most likely suffer from antibiotic resistance when it increases.