The Role of Businesses in Ensuring Responsible Consumption and Production
The Role of Businesses in Ensuring Responsible Consumption and Production
(Article by UNGC)
Responsible consumption and production is fundamental to sustainable development. Thus far, economic growth has been deeply connected to unsustainable outcomes including the degradation of natural capital, the advance of climate change, and violations of human rights. For example, unsustainable consumption and production has, to differing extents around the world, caused greenhouse gas emissions to surge, contributed to severe air pollution, decreased agricultural productivity threatening livelihoods and social cohesion, and heightened water scarcity. Waste production has led to burgeoning landfills with large methane emissions and negative health impacts as well as serious plastic pollution in the world’s oceans. Food production and consumption is also one of the primary causes of biodiversity loss through habitat degradation, overexploitation of fish, pollution, and soil loss.
As producers of much of the world’s output, businesses have a central role to play in advancing responsible production and consumption. They can manage sustainability of their own operations by improving efficiencies, look to source more sustainable inputs, improve the sustainability of products and services at the point of use with credible sustainability information, report publicly on their sustainability performance and that of their supply chain, and take steps to ensure their products are not misused to violate human rights.
State of Food Wastage and Responsible Consumption in Malaysia
- In Malaysia, the country’s population bins up to 16,688 tonnes of food daily, which is enough food to feed 12 million people a day
- According to SWCorp, the recycling rate in the 7 states of Malaysia (Kedah, Perlis, the Federal Territory of Kuala Lumpur, Pahang, Negeri Sembilan, Melaka and Johor) was 30% in 2020 and aims to achieve 40% by 2025.
- Based on a business stakeholder consultation recently organized by UN Global Compact Network Malaysia & Brunei (as part of the technical working committee for Malaysia’s Voluntary National Review) which was attended by 57 participants including PLCs, MNCs, GLCs, and SMEs, all groups placed SDG 12 as one of their top priorities for future business opportunities.
Do your actions satisfy leadership qualities?
- Is your company committed to supporting the achievement of Goal 12? Have you developed a holistic strategy that reflects this commitment, covering end-to-end operation and the wider community?
- Are you committed to learn from your actions and do you have processes in place to improve them accordingly?
- Is your strategy supported by the highest levels of management, including the Board of Directors.
- Do your actions achieve long-term outcomes that greatly exceed those resulting from current industry practice?
- Are your actions aligned with what is needed to achieve Goal 12?
- Is support for Goal 12 embedded across all organizational functions?
- Are staff and board incentives aligned with achieving Goal 12?
- Do you proactively look for opportunities to partner with Governments, UN agencies, suppliers, civil society organizations, industry peers and other stakeholders to inform how to advance Goal 12?
- Do you publicly express your commitment to advance Goal 12?
- Do you identify, monitor, and report on impacts, including potentially adverse impacts?
- Do you mitigate risks associated with your action?
- Do you remediate negative impacts associated with this action?
- Do you engage stakeholders in a meaningful way?
Framework for Business Action
Business Action 1: Design and implement a responsible, circular business model
Today, most business models are based on significant resource inputs, waste generation, greenhouse gas emissions, and energy losses. Businesses can lead a shift away from this linear economy by designing and adopting circular business models. This goes beyond adopting more efficient technologies and sustainable sourcing practices: it requires a fundamental rethink of systems design and the way in which products and services are produced and used in a manner that produces zero waste and minimum impacts. In product design this may imply a shift to offering services, for example mobility, instead of products, such as a car.
A public transport company works with an electric vehicle manufacturer, city and national authorities to introduce a city car concept that is fully integrated with public transport in a metropolitan area. It operates a ”free floating” system where customers can pick up their EV and return it anywhere within the area.
Business Action 2: Significantly narrow or close material and energy loops across own and supply chain operations
Many companies run inefficient, unsustainable production processes with significant resource inputs, waste generation, greenhouse gas emissions, and energy losses; and also depend on inputs from supply chains with large inefficiencies. Prices do not reflect the real costs of these inefficiencies to society, so companies must act responsibly by steering towards more efficient resource flows and sourcing from sustainable supply chains. There is significant scope for leadership by introducing novel ways to narrow or even close material and energy loops in own operations through a ‘reduce, reuse, and recycle’ approach to inputs such as water, raw materials, non-renewable minerals, energy, and packaging. Leading companies can also take action to close resource loops across the supply chain or switch to sustainable supply chains.
An agriculture company develops innovative vertical farming products using closed-loop irrigation systems to provide access to local, fresh vegetables in urban areas throughout the year
Business Action 3: Shift to a portfolio of goods and services that require, and promote, negligible use of resources and produce negligible waste
Today, the use of products and services including food, cars, buildings, appliances, and information technology are associated with unsustainable levels of pollution, use of resources, and production of waste at the point of use. As providers of most products and services, businesses have an important role and responsibility to make their use as sustainable as possible and provide reliable information on their sustainability to buyers. To support this, leading businesses can deploy product and services innovations throughout the product life cycle, for example by designing for minimal resource requirement in use, appropriate lifetimes including through offering maintenance services, and providing for easy dissembling for reuse or recycling.
A financial institution offers mortgage packages at reduced costs tailored to new-build homes and offices that have high energy efficiency performance and satisfy the passive house standard
Business Action 4: Develop, implement, and share solutions for tracing and reporting on sustainability of production and consumption across end-to-end operations and impact on surrounding communities
To allow for global investment to flow to sustainable businesses, and for all stakeholders to understand how they might be impacted by business practices, companies must integrate sustainability information into their reporting cycle. This includes reporting information on environmental, social and governance indicators and the results of due diligence processes related to human rights. These are also essential tools for risk identification and management as well as long-term social, environmental, and financial performance. There is scope for leading companies to develop comprehensive tools for tracing and reporting on the sustainability of end-to-end operations, including impacts on communities surrounding business activities, including through the development of replicable digital tools and processes for inclusive stakeholder engagement and collaboration.
A restaurant chain deploys a cloud-based software tracking system to document pathways for all agricultural inputs, inform quality assessments and guarantee sustainable practices throughout its supply chain
The business case for leadership on Goal 12 includes substantial reductions in production costs for companies with resource intensive production processes. Goal 12 ties the people, planet and prosperity goals together. Action on Goal 12 is strongly interconnected with outcomes on other SDGs related to resource use and the environment, as well as those focused on people. Action on Goal 12 can advance SDGs through its connection with life on land and water (Goals 14 and 15), its impact on the use and contamination of water (Goal 6), associated use of energy (Goal 7) and impacts on climate change (Goal 13). Progress on Goal 8 implies that Goal 12 becomes ever more significant, as current production and consumption rates per unit of income cannot be sustained in the future. Companies that aim to lead on Goal 12 must carefully manage risks that result from this interconnectedness. These include pressures to substitute natural resource use in production with unfair labor practices. Leading companies recognize and take account of these interconnections, especially ensuring that changing production and consumption decisions respect the human rights of potentially affected populations.