Sustainable consumption and the Fourth Industrial Revolution

Sarita Nayyar, Managing Director of the World Economic Forum, USA, ponders how nations can develop without damaging the environment and widening inequalities

Emma Watson’s gown, made from recycled material for the Green Carpet Challenge.

So far, economies and businesses have benefited from cheaper and better imports and improvements in efficiencies in production. And growth has come from selling at a greater scale and has been achieved through volume.

Unfortunately, in the past 50 years, 60% of the earth’s ecosystem has been depleted and natural-resource consumption is expected to rise by three to six times by 2050. The population is expected to reach over nine billion people by 2050 and the global middle class is expected to triple by 2030. With this in mind, how long can we sustain this development model without further damaging the environment and aggravating existing inequalities?

The Fourth Industrial Revolution will provide some of the solutions, with a further increase in the efficiencies of the value chain through data analysis, robotics, sensors and 3D printing. We are already seeing the impact that this revolution is having on business and society.

Previously, there was a greater incentive for companies to always produce more to decrease the cost of each product as quantity increased, but huge gaps between forecasting decisions and consumer demand create an estimated 30% waste in all manufactured goods. There is waste created at every step of the supply chain: the energy used to produce and ship the goods, the packaging and the waste of land in the landfill.  and today’s hyper-connected consumers will help bridge this gap.

Avery Dennison, a packaging and labelling company, has come together with Evrything, a London-based internetof- things start-up, to create over the next three years a web identity for over 10 billion pieces of apparel. This partnership will enable companies to track products for supply-chain purposes and to decrease waste. It will also empower customers to check the manufacturing history of these products and provide them with recycling options.

The possibilities of combining recycled materials and high fashion were highlighted by actress and campaigner Emma Watson who, at this year’s Met Gala, wore a gown made from recycled materials and organic cotton to promote the Green Carpet Challenge (a platform pairing glamour and ethics to raise the profile of sustainability, ethics and social welfare). But these technological advances are only one part of the equation: the consumer will also need to re-evaluate their lifestyle and their environmental, social and economic impact. They will need to assess how they choose and use products and services.

“Huge gaps between forecasting decisions and consumer demand create an estimated 30% waste in all manufactured goods.”

Even as consumers demand better accountability from companies, few change their own consumption patterns. This demand seldom translates into sustainable consumption. Most consumers are blocked by availability, affordability and their own scepticism. Transparency offered by technology and consistent and effective customer service can alter the public perception about green claims.

These barriers are slowly being broken down by companies incorporating data and analysis provided by this new industrial revolution. They are producing better products with maximum societal value and minimizing environmental cost. Nike is such a company, the Nike Flyknit Lunar 1+ design reduces waste by 80% compared to traditional Nike running footwear. Nike Free Flyknit has 35 fewer pieces to assemble than Nike’s Air Pegasus+ 28 runner and that equates to a considerable reduction in terms of waste. Nike has perfectly combined the need of their customers with sustainability through innovation. Companies are also marketing to influence and raise awareness, encouraging and enabling their consumers to choose and use their products more efficiently and sustainably. The World Economic Forum has created the Positive Change Effie Award which recognizes and rewards brands which emphasize sustainability in their marketing programmes.

And the new generation’s consumption patterns are also changing: millennial consumers are increasingly looking for products that make them look and feel good, and which are also good for the planet and society, according to the findings of the Forum’s Engaging Tomorrow’s Consumer project. The #WhoMadeMyClothes campaign is tied to the Rana Plaza factory collapse and calls for a renewed customer focus on supply-chain transparency and the millions of people who are a part of the industry’s enormously complex value chain.

“The possibilities of combining recycled materials and high fashion were highlighted by actress and campaigner Emma Watson who, at this year’s Met Gala, wore a gown made from recycled materials and organic cotton to promote the Green Carpet Challenge.”

Governments and civil society will also need to engage and encourage the removal of “unsustainable” products and services from the marketplace. This editing process will be critical and will also be fuelled by the new pace of change and disruptive companies. Places like Taiwan are part of the booming upcycling of e-waste. Taiwan headquarters several major technology companies such as Asus, Acer and HTC, and produces more electronics per capita than anywhere else. Their commercial efforts (which returned over US$ 2.2bn dollars in 2012), combined with a government fund and increased consumer awareness, have helped clean up the country. It now has one of the highest household recycling rates in the world, at roughly 42%, up from 5% in 1998, according to Taiwan’s Environmental Protection Administration.

The government also started the Taoyuan Environmental Science and Technology Park, an industrial complex that offers incentives for recyclers of glass, plastic and electronics, and also uses advanced technologies and invests in research and development to increase the island’s reuse rates. The W Taipei hotel has embraced this initiative and each year turns 300,000 plastic bottles into coasters, games, key- and changeholders.

Organizations like the Cradle to Cradle Products Innovation Institute are helping companies manage resources and address the impact at the local level. But companies, international organizations and governments still need to establish how they can work together to improve their water management. These disruptions will multiply as our existing expansionary development models clash with the natural limits of the planet.

To achieve a future where the consumer will be better equipped to lead a more sustainable lifestyle, based on informed purchase, businesses and governments need to come together. We must take the necessary action today and explore new models of consumption to ensure the needs of future generations and prevent the continued degradation of our environment.

• This article is published under the terms of Creative Commons Public License Version 3.0. It was originally published by the World Economic Forum.