How is business responsible for (re-)defining consumer values in a rapidly changing world?
15 September 2023 – Beth Knight explores the influence of business in shaping consumers’ worldviews and their responsibility to drive change.
From an early age, we are exposed to social conditioning, which affects how we determine ‘value’ and our sense of worth relative to others. This is underpinned by global systems and business models that prioritise financial value and profit maximisation. For example, Gross Domestic Product (GDP) is regarded as the primary measure of a nation’s success based on what it can produce and sell. This concept inextricably links a nation’s sense of wellbeing and prosperity with financial growth – and incentivises production and consumption to create a ‘better’ society [1]. The result…? Arguably, our society has been influenced to embody Oscar Wilde’s aphorism of: “knowing the price of everything and the value of nothing” [2].
What we buy, how we buy and why we buy impacts every facet of our lives. It determines what we think of as important to achieve collective social wellbeing. The most addicted consumers amongst us can demonstrate impulsive buying habits due to the dopamine hit we get in anticipation of a reward [4].
The value we ascribe to external factors, such as material possessions, can be described as ‘extrinsic’. However, our mental wellbeing isn’t improving as we reward ourselves by buying more. Research shows that intrinsic value, derived from spending more time in nature, is more important for long-term collective social and environmental wellbeing [5].
The World Happiness Report (2023) [6] suggests that some of the “happiest” countries in the world need significantly fewer resources to support their lives than the highest-consuming countries. Additionally, consumption habits put the wellbeing of all living things at risk because we are over-producing and over-consuming relative to the levels of extraction and waste that our planet can support [7]. The scary reality is that if everyone globally lived like those highest-consuming countries, we would need at least four planet Earth to sustain us [8].
Every year, we use over 100 billion tonnes of natural resources (11 tons per person) - and projections show that this will double by 2050 unless we change our production and consumption patterns [9,10]. This must be addressed through redesigning infrastructure, policy and incentives, production and consumption models, and a collective shift in our attitudes, behaviours and beliefs to shape our fate for the better.
So, what does this look like in practice…?
At an individual level, we must intentionally examine the values and beliefs that drive our sense of self-worth, wellbeing and buying habits. In parallel, we need business leaders and policymakers to actively drive innovative approaches to production and consumption that enable us to:
Consume differently globally - prioritising products and services based on environmental and social impact, e.g. mindful procurement, pro-active re-use and recycling of essential materials such as paper, plastic, glass, aluminium, and food.
Consume less in some countries to enable others to consume more and raise their community’s collective wellbeing - prioritising products and services for longer life, re-using and re-purposing our resources, selectively editing our choices, reducing demand or stopping production of items such as single-use plastics.
Transparently engage in the shared value we create – moving beyond financial value to demonstrate the social and environmental impact of the resources used in production. And sharing data with consumers that informs ‘better’ buying habits.
The demand for sustainability information is growing - over 15% of consumers question the sustainability performance of products and services when purchasing [11]. This increases the responsibility of business to respond and drive further change. It’s also encouraging to observe the trends reported by market researchers around mass consumption patterns shifting in favour of lower environmental impact and rising social awareness [12, 13, 14, 15].
What can businesses and governments do to drive sustainable production and consumption globally?
At a systems level, businesses and governments need to accelerate their adoption of circular economy and sustainable business models [16]. Various political agendas strive to address our flawed economic logic of never-ending growth on a planet with finite resources. For instance, agreements such as Rio+20, the Kyoto Protocol, the GHG Protocol, the UN Sustainable Development Goals, and the World Summit on Sustainable Development have highlighted sustainable consumption and production.
Businesses must urgently address the social and environmental impact of their ‘value chains’ [17, 18, 19]. This requires courageous business leaders to be sustainability-minded when taking a product or service from design and development through production and distribution to end-of-life handling after consumer use. The Ellen MacArthur Foundation has collected numerous leading practice examples of this, and varying approaches to re-evaluating business value chains are explained here.
This combination of action across the inter-connected business, political and personal spheres of our lives will enable us as a society to take back control of our fate. Amidst a rapidly changing world, we must collectively unlearn how ‘value’ has been defined globally over the last 100 years. And to build a new ecosystem where the value of our collective wellbeing and our planet’s natural resources is paramount to a thriving world.
If this vision of value resonates for you, consider diving deeper into what it takes to become a future-fit, courageous business leader and re-define your stakeholder’s sense of value: Business Sustainability Management 8-week online short course and Sustainable Marketing Media and Creative 8-week online short course.
References:
[1] Cassiers, I. and Thiry, G., 2014. A high-stakes shift: Turning the tide from GDP to new prosperity indicators (No. UCL-Université Catholique de Louvain). IRES.
[2] Wilde, 1892. Lady Windemere’s Fan.
[4] Sapolsky, R.M., 2018. Behave: The biology of humans at our best and worst. Penguin.
[5] MacKinnon, J.B., 2021. The Day the World Stops Shopping: How ending consumerism gives us a better life and a greener world. Random House.
[6] World Happiness Report (2023). World Happiness Report (worldhappiness.report)
[7] WEF, 2019. Why responsible consumption is everyone’s business (weforum.org)
[8] World Population Live Statistics.World Population Live Statistics (theworldcounts.com)
[9] UNEP, 2023. SDG 12 Hub (data.unep.org)
[10] WWF, 2020. Halve footprint of production and consumption (panda.org)
[11] IISD, 2023. Standards and Value Chains (iisd.org)
[12] FAO, 2000. Value_Chain_Handbook.pdf (fao.org)
[13] Forbes, 2021. Is A Complex Value Chain Squeezing Every Cent From A Barrel Of Oil? (forbes.com)
[14] McKinsey, 2020. Building more resilient value chains after the COVID-19 crisis (mckinsey.com)
[15] NielsenIQ, 2022. Welcome to a new era of supplier collaboration - NIQ (nielseniq.com)
[16] CISL, 2020. What is a value chain? Definitions and characteristics (cisl.cam.ac.uk)
[17] Kaplinsky, R. and Morris, M., 2000. A handbook for value chain research (Vol. 113). Brighton: University of Sussex, Institute of Development Studies.
[18] McCormick, D. and Schmitz, H., 2001. Manual for value chain research on homeworkers in the garment industry. IDS.
[19] SustainAbility, UNEP and UNGC, 2008. Unchaining value: Innovative approaches to sustainable supply (unglobalcompact.org).
Image: Bethany Legg / Unspash