Our economy consumes finite natural resources faster than they regenerate. Our current patterns of consumption are deeply inequitable, leaving many without their basic needs met, while overconsumption threatens our health and produces mountains and islands of waste. Solutions to such problems have the potential to create an estimated $4.5 trillion USD in value across the sharing economy, circular economy and dematerialisation. With this in mind, how can businesses help and start acting today? As part of our ‘Unlocking Systemic Change’ inquiry, we asked:
- How can businesses succeed through social justice and environmental regeneration?
- What is the role of consumption in meeting your business’s environmental and social goals?
- Why haven’t innovative business models been mainstreamed?
In October, Capgemini and Forum for the Future hosted a breakfast roundtable with leaders from across the retail and consumer goods industry. We started by reviewing and validating that great ideas already exist, new and old, to change business models to be more resource-efficient. For example, dematerialisation through digitisation, peer-to-peer, made-to-order, repair and maintain and product as a service alongside others. This was followed by agreement among attendees that for any shift in business model or consumer behaviour towards sustainability to be successful, it would also need to be desirable and equitable. Lastly, we explored the business opportunities in solving these problems.
What we learned
While several consumer goods businesses have made ambitious commitments to resource-efficient business models, and while there is lots of experimentation and learning happening in the sector, the path to scale is yet to be unlocked. This requires a shift of the entire system that goes beyond the business model transformation some are driving.
This requires reworking on both the supply and demand sides. The interconnectedness of supply and demand is key, and articulating the value of resource-efficient business models in the short, medium, and long term is a critical unlock.
At the same time, consumers shifting their behaviour is equally critical and is challenging for businesses to measure. And, beyond completely adapting their positions to translate resource efficiency into commercially viable models and innovation concepts, brands now need to make the change accessible and engaging to the final user.
Business-driven solutions to shifting consumption
For consumer products and retail businesses to unlock a new consumption reality, they need to shape a path to scale for resource-efficient models by ensuring economic viability, a new cultural narrative, and sustainable choices. To delve into some of the nuances of making this happen, change leaders need to take a systemic view both when designing their resource-efficient solution and delivering the change roadmap.
A new consumption narrative is needed, where different lifestyles and values coexist enabling people to embrace a new consumption reality. Examples of brands like Patagonia show us how such cultural shifts are possible. Storytelling is key, explained Corina Kwami, Senior Director of Strategy at Purpose, a global community of campaigners, creatives, and doers. Sustainable choices are yet to become mainstream and this can be achieved through normalising new stories, creating a dialogue across issues, and ultimately enabling the mindset shift that leads to changed actions and habits.
One useful technique is to identify ‘leverage points’ when people are more open to a shift, such as the one experienced during the COVID-19 pandemic. Trying to tell stories people do not want to hear is a waste of time, so choosing moments when people are receptive and open to thinking differently is key. Systems thinking alone is not an inspiring story. Stories need to have a villain and a satisfying conclusion, which might be a relatable benefit such as improved health. Lastly, stories need to centre on people and solutions. These days, people are atomised and crave connection, so there is an opportunity to connect people through new models and dialogues around reselling, repairing, tailoring, or modifying clothes, or reusing or sharing in such a way that people see themselves as part of the collective solution and want to engage in dialogue.
Propositions like dematerialisation, peer-to-peer, made-to-order, and product as a service, need to skillfully blend more than just one ingredient, leveraging cultural shifts to enable behavior change and centre on values and equity principles. One example of this is Too Good To Go, an app that allows customers to explore shops and restaurants in their local area and save “Surprise Bags” of surplus food from going to waste at a largely discounted price. The app simultaneously reduces food waste, changes consumer behaviour, and offers lower-cost food all while shifting the narrative of overstock or wasted food from waste to something valuable.
Insights from Capgemini’s sustainable innovation practice demonstrate that experiments and pilots to bring new types of models like this to life need to engage the full ecosystem rather than just what is under the control of the business. Cross-sector collaboration is key in running these large-scale demonstration projects, where together they can explore the art of the possible, create a wider understanding of the business case, and identify barriers and levers to change such as new technologies or joint marketing to enable scale. One example is the technology platform DXM, invested in by Carhartt and Shahi among others. The platform pairs its “digital tailor” 3D modeling of people’s dimensions with their material and style choices with local manufacturers, thereby reducing material, transport, and stock waste and offering the exact product, fit, and potential price desired.
Finding a laser focus (for example, with certain material flows like plastic) and leveraging innovative financing structures is key to embracing new valuation tools and rethinking established accounting concepts like residual value that can help build the economic case.
Lastly, to enable scale, the entire business needs to join in. At a very practical level, internal teams need to go on the journey of building the foundation to make the right decisions, gain the courage to grab the opportunity of setting the course for this agenda, and finally, take responsibility for their role in driving change. This calls for an evolution in skills, both soft and hard, as well as building an internal innovation-driven culture that champions a regenerative purpose and social equity across the entire business.
About the Unlocking Systemic Innovation series
This inquiry is the second in a four-part series that Capgemini and Forum are exploring throughout 2023 – aiming to find opportunities for collective action and progress on some of the biggest sustainability challenges, including:
- Traceability and Transparency
- Transforming Consumption
- Sustainable Procurement
- Adaptation for Resilient Supply Chains
We are gathering reflections on these topics through the Futures Centre and Forum’s social media channels at regular intervals during the year. We’ll also hold conversations with organisations grappling with these challenges, including trailblazers demonstrating the art of the possible and the ESG co-benefits available in tackling these issues. The insights from each event will be shared in a Futures Centre blog at the close of each inquiry.
- To learn more about the series and/or Forum for the Future’s work helping businesses lead and innovate to shift to radically more sustainable ways of consuming and living that are actionable, affordable and aspirational, please contact Jordan McKay, Forum’s Principal Sustainability Strategist at firstname.lastname@example.org or get in touch via Linkedin
- Click here to learn more and get involved with how Forum for the Future is Transforming Consumption
- To learn more about Capgemini’s solutions for designing and scaling new models of consumption please contact Laura Gherasim, Director of Sustainable Futures UK at email@example.com or get in touch via LinkedIn
- To learn more, you can read Capgemini’s latest report around Circular Economy, here.