Guan Chong Today Online 10 Jul 13;
The seriousness of the haze this year has heightened consumer awareness about the importance of sustainable business. Questions of culpability surround plantation owners, who supply major corporations with raw materials such as pulp and palm oil, often used in manufacturing paper, food, beverages and so on.
As consumers, we certainly have the capacity — and obligation — to demand that companies be responsible for ensuring that their entire supply chain is operated in a sustainable manner. To some extent, this has been demonstrated in recent campaigns by environmental groups against major palm oil players.
On Facebook and Twitter, hundreds of thousands of consumers supported a Greenpeace campaign in 2010 against Nestle, which was alleged to have used palm oil products that came from the destruction of rainforests, including in Indonesia. As a result, Nestle committed itself to a global no-deforestation target by 2020, as did other major brands such as Unilever.
Nestle’s partnership with its leading palm oil supplier, Singapore-listed Golden Agri-Resources, and non-government organisation The Forest Trust is beginning to look like an example of how sustainability collaboration can dramatically change operating practices and business models.
We, as consumers, can accelerate progress by urging other major brands to take a similar approach.
A GLOBAL MOVEMENT
Environmentally-friendly consumer behaviour is growing and is becoming a global movement.
According to Nielsen’s 2011 Global Survey of more than 25,000 respondents in 51 countries, 77 per cent rated air pollution as the top concern — showing that such environmental issues are taking a higher priority in the minds of consumers.
In Singapore, according to a recent survey, 48 per cent of the 1,000 participants indicated that it was important for a trusted brand to have environmentally-friendly practices.
The consumer environmental movement began as early as the 1960s; consumers have since become more knowledgeable and competent in choosing environmentally-sound products and companies.
In the United States, consumer opinion polls show overwhelming support for environmental protection: 54 per cent read labels to check if products are environmentally safe, and 34 per cent said they boycotted a company that was environmentally careless.
As consumers’ green concerns grow, businesses have begun to modify their behaviour. In the early 1990s, there were numerous examples of such US firms.
McDonald’s, for instance, replaced its clam shell packaging with waxed paper because of worries over polystyrene production and ozone depletion. Xerox introduced a “high quality” recycled photocopier paper to satisfy business customers’ demands for less environmentally detrimental products.
In Europe, with the media hype surrounding the green consumer movement, organisations such as The Body Shop, which heavily promote environmental responsibility, have obtained great competitive advantage.
MORE PRESSING PRIORITIES?
At the same time, there are many reasons for why consumers’ environmental concerns may not always directly translate into their choices of products.
A focus on issues such as job security, housing, transportation, medical expenses and economic well-being could diminish public attention to environmental concerns. In the face of more pressing personal concerns, one’s “caring capacity” for the environment shrinks.
According to the Nielsen survey, 83 per cent of global consumers say it is important that companies implement programmes to improve the environment — but only 22 per cent will pay more for an eco-friendly product. Many consumers indicated a preference for eco-friendly goods, but a large proportion would set aside this preference to buy whichever product is cheapest.
In Singapore, while there may be growing public concern about environmentally friendly business practices, many consumers are unsure about the steps to take at an individual level.
Only 12 listed companies in Singapore published sustainability reports in the 2011/2 reporting period. Promoting public awareness in sustainability reporting would be beneficial, particularly to encourage companies with superior sustainability reports and those that have good sustainability practices but are not yet reporting.
Government agencies can help promote sustainability awareness among consumers. For example, subsidies or tax reliefs for manufacturers of environmentally friendly products would help make these products more affordable for the average household.
The Singapore Government is not alone in its quest to raise public awareness and promote action on sustainable businesses; there are many proactive individuals and non-government organisations too.
Singapore used to be the world’s second-largest shark’s fin trading centre after Hong Kong.
In 2011, in a collaboration with conservation group WWF, Cold Storage became the first supermarket chain here to stop shark’s fin sales. Subsequently, with effort from activists and the public, NTUC FairPrice, Singapore’s largest supermarket chain, stopped selling shark’s fin products last year.
Public support for such action is strong in Singapore. Going forward, sustainable consumption behaviour will have to be not only about individual decisions about the products and services we purchase — it must also be about the collective effort to raise public awareness. Through social media we can influence fellow consumers.
While the economy seems to have an impact on both consumers’ decisions and the level of capital investment in eco-friendly products and technology development, firms are nevertheless moving towards greater sustainability.
This is promising. As Singaporean consumers, we can do our part, not just in relation to palm oil products but also on other issues of environmental concern around the world.
ABOUT THE AUTHOR:
Guan Chong is a Marketing Lecturer with the School of Business at SIM University
