Your location: Home > Publications > Briefings, consultations, and papers > SERA sustainable consumption seminar

SERA sustainable consumption seminar

Background- The Government's UK strategy for sustainable consumption and production.

In February 2003 Environment Secretary Margaret Beckett announced the development of a UK strategy for sustainable consumption and production, one of the key commitments made by the UK Government at the Johannesburg Summit in September 2002. According to her: 'the strategy will set out the framework for future action by government and business, to drive the transition towards sustainable development'. Five key areas of strategy development have been highlighted:

• Setting out the economic, social and environmental rationale for the long-term policy planning to de-couple economic growth from environmental degradation and resource use.
• Drawing on the two major policy blocks of energy and waste as core elements of a 'sustainable consumption production future'.
• Considering the case for further indicators for resource use as a means to drive long term-improvements.
• Setting out the Government's approach to sustainable consumption with specific proposals to help empower consumers and improve the environmental impacts of goods and services
• Identifying the key policy levers for encouraging sustainable consumption and production (SCP) and set out how a co-ordinated use of tools and instruments could drive such a programme.

The objective of the seminar, chaired by Gareth Thomas MP, was to discuss policy proposals for activating the ethical consumer that could be included in the Government's forthcoming UK strategy document on sustainable consumption and production. The key focus of the seminar was how we can empower and activate consumers and improve the environmental impacts of goods and services. The first stage of the seminar consisted of presentations made by:

-Michael Meacher MP, Environment Minister, highlighting the Government's key policy initiatives towards sustainability including support for environmental information, Integrated Product Policy and a strong commitment to the Organic Action Plan.

-Simon Williams, Director of Corporate Affairs, The Co-operative Bank, presented a comprehensive understanding of the marketplace for ethical goods and services carried out by the Co-operative Bank, providing an insight into the ethical consumer and his/her consideration for environmental and ethical issues.

-Craig Sams, Chair, Soil Association- gave an introduction of the first wave of green consumerism in the late 1980s. He provided a global perspective of success stories in ethical consumption and outlined the benefits of achieving genuine sustainability in organic farming in the UK.

The speeches indicated that to steer the marketplace towards sustainable consumption and production a variety of radical policy measures are needed. The second stage opened with seminar attendees making policy proposals for the government to consider. Proposals included better information for consumers, government implementation and regulation of ethical products and ethical marketing.

Sustainable consumption and production is a hugely important area. It was one of the 5 key actions to come out of World Summit on Sustainable Development and one that applies directly to developed countries like us. We have got to reduce our ecological footprint and prove that we are prepared to play our part in using fewer natural resources.

We are all under increasing pressure to use resources more efficiently, minimise the amount of waste we produce, and improve energy efficiency. Each year we generate 400 million tonnes of waste and that figure is growing at 3% per annum. So every hour of every day we produce enough waste to fill the Albert Hall.

We are not alone in our profligacy. We need to develop a 10-year framework of programmes to accelerate the shift towards sustainable consumption and production, resource productivity and subsequent de-linking of economic growth from environmental degradation, pollution, and waste. This is a big, but important challenge.

In early February, Margaret Beckett announced the development of a UK strategy for sustainable consumption and production. This will be developed over the coming months with a view to publication in early summer and will set out what we are already doing and look at what else we may need to do.

We cannot go on with the old habits of produce, consume and discard. This behaviour is simply unsustainable.

The invitation mentioned that one of the subjects that this seminar will address is "better promotion of the eco-label". As a Government we strongly support the European eco-label. We believe that reliable environmental information has a vital role to play in sustainable development, by empowering consumers to exercise well-informed choices and promoting the market for environmentally improved goods. The eco-label is part of our commitment to providing better environmental information for consumers as well as helping to encourage consumers to take account of environmental issues in their everyday buying habits.

To date the UK has spent a huge amount of money running and promoting the European eco-label – over £5 million. How many people in the street know about it? Despite a lot of debate, take-up Europe wide has been low. It is not working. We are working to change this, and I hope we’ll get some good suggestions today about how to approach the challenge.

I believe that promotion in isolation has prevented consumers seeing what the eco-label can do and what it covers in comparison with other labels. Consumers need to be shown what different labels mean. And that is what we have been doing through information materials like the new Shopper’s Guide sponsored by Defra, which shows all the green labels that we want shoppers to be looking out for, and asking for.

Our experience in running the scheme is that some businesses tend to obtain the label and then hide it under a bushel, not referring to it in advertisements or making very much of it on their products, and then get disillusioned if the label hasn’t made a visible difference to their sales.

Businesses using the eco-label need to be aware that the label will only promote the product if the product promotes the label - it’s a symbiotic relationship, and this is what we tell all potential applicants now.

Labelling is a step in the right direction but we must also start to identify novel and innovative ways of satisfying customer needs using different business models. One approach, which is gaining increasing attention, is substituting services for products. To date there have been relatively few examples – Xerox providing photocopying instead of photocopiers being the most prominent. However, a more recent example is the chemical management service, which involves a service provider managing the storage, use and disposal of chemicals on the customer’s premises. In this way experts can minimise risks, whilst also being alive to opportunities for minimising use.

This approach is partly reflected and being stimulated by producer responsibility legislation e.g. Waste Electrical and Electronic Equipment (WEEE), on batteries and hopefully on junk mail. For example, packaging regulations that have set certain businesses targets to recover and recycle a growing percentage of their packaging waste as well as voluntary agreements with newspaper manufacturers which has seen the recycled content of newspapers increase massively. In addition we are also exploring other innovative ways of meeting the associated reduction targets.

We have been participating in developing policy on IPP at European level and welcomed the debate launched by the publication of the Commission’s Green Paper in 2001.We believe an overall vision for IPP now needs to be developed to show how it can help deliver major EU environmental strategies and enable decisions to be made about priorities. We are looking forward to the publication of a new EU Commission Communication shortly.

Through a focus on products, the IPP approach has enormous potential to help to identify the product sectors most associated with high-level objectives for sustainable development, and the most significant life cycle impacts in these sectors. It also helps policies to be developed in a co-ordinated way, selecting the set of tools, which is going to be most effective for delivering the outcomes needed.

We have appointed the Advisory Committee on Consumer Products and the Environment (ACCPE), to help develop this approach and propose ways of implementing IPP in the UK. The Committee has come up with a number of important recommendations, which are feeding, into our thinking.

Procurement: Defra is leading a major Whitehall initiative on public procurement of sustainable food, which will include organic. This has huge potential given the range of institutions from schools to prisons.

Supermarkets: Looking to get together with the major supermarkets to see how they can implement the commitment that most of them have made through the British Retail Consortium (BRC) to source more organic food from British suppliers where it is feasible for British producers to supply at acceptable levels of quality and price. I have recently started having meetings with all the major stakeholders to pursue this with them.

R&D: The Department is launching the new LINK programme with £5 million worth of support for R&D over the next 5 years. The scheme matches industry funding for research related to industry’s needs. We are preparing a fully referenced report on the environmental advantages of organic farming, which will be submitted to a refereed journal for publication.

We have taken a number of steps to help us meet the difficult targets set out under the Directives for Landfill, Packaging, and Waste Electrical and Electronic Equipment (WEEE).

These include the Waste and Emissions Trading Bill which is currently going through Parliament – which will introduce allowances to reduce the amount of waste sent to landfill. This draws a line from where we are now and where we have to get to on waste and allocates allowances to each local authority.

Essentially, these are some of the things that will be in our SCP consultation paper.

The delivery of sustainable behaviour in the consumer marketplace requires the active participation of all key players; i.e. government, businesses and consumers. The Co-operative Bank has been tracking consumer ‘demand’ for ethical goods and services for over ten years and, in its business operations, seeks to meet the needs of consumers in a sustainable fashion. We bring to this discussion the experience of an ethical business and the knowledge of a business that has developed a good understanding of the marketplace for ethical goods and services through the development of our research project – the Ethical Purchasing Index. My overall view is that ethical consumerism as a new consumer option has been a niche sector for too long and, without intervention, is likely to remain as such into the foreseeable future.

We don’t really have time here today to get sidelined by the semantics of what is ‘ethical’ and what is ‘sustainable’. You might contend that the motivation to pursue sustainability as an ideal can ultimately be boiled down to a matter of self-preservation whilst drives towards ethical consumption relate to matters of justice. We have chosen to define our interests under the banner of ‘ethical consumerism’, embracing, as it does, everything from organics, fair trade produce and green energy to the humane treatment of animals and we would advocate the broadest interpretation of sustainability – one that accommodates issues of human rights, animal welfare and corporate responsibility.

We set about establishing the Ethical Purchasing Index (EPI) to introduce a measure of sobriety into an over-hyped market. The EPI is a hard-nosed evaluation of true sales of ethically marketed goods and services in the UK that is based on available sales data. It is something that helps us understand the ethical marketplace better, although we accept that it does not provide a comprehensive snapshot of ethical behaviour in the marketplace. In 2002, the EPI documented annual growth of 19% - which compares to GDP growth of 2.1% - taking the total sales in the marketplace for ethical goods and services to £6.8bn. However, despite spectacular growth in certain sectors – 74% in green energy for instance – the EPI reveals that market share remains small in the vast majority of sectors.

The low level of consumer awareness of the issues surrounding sustainable consumption is only exacerbated by the lack of promotion by in business of the good work it has done in pursuit of sustainability. Businesses are very happy to use community activities to gain publicity and recognition, but appear to be far less motivated by the sustainability agenda. Awareness of sustainability among business is low and few have effectively embraced sustainability in the make-up, production or promotion of products. However, there are exceptions, notably Café Direct and those products carrying the Fair Trade (FT) mark. These products have achieved significant moves towards the mainstream, made possible by the adoption of the type of techniques used by larger market players, such as paid for advertising campaigns. The 2002 EPI , showed sales for FT coffee and tea for instance accounted for 2.3% of the market.

One thing that we have learnt is that ethics alone does not sell. Ethical positioning needs to be supported by excellent customer service and quality. There needs to be at least parity with market leaders in terms of quality and possibly price, this would then lead to competition in quality. The bank has been is careful to ensure that ethical positioning is supported by other features, such as first class customer service, accessible service channels and high quality products, that address the needs and wishes of our customers. The marketplace for ethical products and services is not only small, it is also fragile. The relationship between the consumer and the market is largely based on principles and trust – after all, most of us would not be able to prove for ourselves that an organic product is exactly that, for example. It is important to note that this bond can easily be broken. As Simon Caulkin from the Observer put it, "If, as in the case of the Co-op [Bank], a significant part of achievement is the result of its ethical stance, even a cigarette paper’s difference between what it says and what it does could be fatal." One slip has the potential to undermine not just one business, but also its ‘labelmates’ and perhaps even the broader ethical agenda.

Risk does not come without reward, so I would say that businesses, therefore, need to have courage. I speak from a business that in 1992 launched an ethical policy and since, has secured nine consecutive years of record profits!

So, to conclude. Will consumers alone deliver sustainable consumption? Our research would suggest that the answer is probably no. Growth is at such a rate that in most sectors, it would take years for products to command significant market shares. Do consumers have a significant role to play? The answer is an emphatic ‘yes’. Consumers have demonstrated their ability to be powerful catalysts for change – for example, they have played an instrumental role in encouraging businesses to consider their environmental and ethical impact (even if the imperative for such changes in behaviour tends to be derived more from consideration of reputational risk). The bank’s ethical policy is a brilliant example of how a business committed to sustainability, is listening. The sustainable elements of our business approach are reflected as much in our product make-up e.g. our ‘green mortgage’ as they are in our operations and our communications.

Business needs to better embrace the sustainability agenda. Sustainable goals should permeate everything it does and should be effectively communicated – consumers need to be aware that these issues are taken seriously. Government also has an important role to play. We’ve seen that consumers have an important role to play in the adoption of sustainable products, however, we’ve not seen them move into the mainstream without government intervention.

The pursuit of sustainable consumption and production requires a tripartite commitment – consumers, business and government alike are required to push it forward.

I’ve been involved with the Soil Association since the late 1960s and founded Whole Earth Foods and Green & Black’s chocolate. In 1993 I set up a trading relationship with the indigenous Maya of Southern Belize that led to the launch of Maya Gold, the first product to obtain certification by the Fairtrade Foundation. The reason I mention that in this context is that we had developed the product purely as an organic product and then found that the deal we had with the Maya automatically fulfilled all the sustainability and ethical requirements of the Fairtrade Foundation’s standards.

Maya Gold was a commercial success and Green & Black’s has gone from strength to strength. So we know that fair trade, like organics, is commercially viable. Just a few of the unforeseen consequences of our 10 year relationship with the Maya include a fivefold increase in secondary education, increased migratory bird populations, reduced pesticide pollution of the rivers, and an increase in Maya political power. Not least about $100,000 more than before is going into the local economy each year. In 1993 ODA (Overseas Development Agency) advised the Maya strongly not to go organic and to be careful in dealing with Green & Black’s. This year the ODA’s successors, (Department for International Development) Dfid, are generously supporting our capacity building initiative to help quadruple the income of our partners. So times are a-changing. But what about closer to home?

The organic market is powerful and sustained. It has grown at 35% per annum, without anybody’s help, for at least two decades, forcing its way up like a weed through the pavement, despite unsupportive agricultural policy instruments.

Last year the Soil Association entered into discussions with the Fairtrade Foundation. If fair trade works for Third World producers, why not apply the same standards to UK producers and ensure fairer pricing? It was the hot topic at our recent annual conference and discussions with the Fairtrade Foundation seek to find a way to implement such a scheme without undermining their role as a developing world NGO. Consumers want fairness and are prepared to pay the price.

However, there is one major obstacle.

The $1billion a day that goes in direct and indirect agricultural subsidies is undermining the world’s economy, doing as much damage to the developed world as to the developing world.

A farmer in Mexico can grow corn profitably for $4 bushel, while the less efficient US farmer has a production cost of $5 bushel. So you’d think that Mexico would export corn to the USA. In fact the reverse is true because the USDA subsidises the US farmer with an extra $2 bushel to make sure that he can always undercut the Mexican farmer’s price. 100’s of thousands of Mexican farmers have gone bust, unable to sell their own corn in their own country because their government isn’t as rich as the USA and isn’t allowed to keep American corn out under WTO and NAFTA rules. The same story happens world-wide and not just with corn.

When the price of commodities is set on the Chicago Board of Trade against the background of US subsidies it means that ALL the world’s food and textiles are priced artificially low. These low prices depress the value of the 85% of production outside the US and the EU by as much as $1 trillion a year, depriving developing economies of the capital formation that is essential for social stability, the development of infrastructure, debt repayment and to buy goods and services. They wouldn’t need aid if we were fair.

But how can we possibly drop subsidies? If subsidies were dropped, land prices would collapse and most farmers would go bankrupt. Subsidy commitments run deep – I’m planting 7 acres of top fruit this October because Michael Meacher announced a £600 per hectare annual grant if I do so. He can’t just change his mind and hang me out to dry without some transitional support. But think about this.

If we had paid every landowner in Britain the total value of his or her land back in 1992 on condition that the land was never entitled to subsidy again, the cost of that offer would have been paid off this year and we could all go forward with lower land prices and higher farm incomes. If we’d done it in 1982 the Exchequer would now be £50 billion better off.

Jules Pretty at the University of Essex has shown that, if all farmers went organic, the environmental benefits and pollution savings would be equal to the annual expenditure on farm support. Changing policy instruments to reward the delivery of environmental and social goals instead of subsidising environmentally damaging production goals could thus, neatly, pay for itself. Win-win instead of lose-lose.

Organic farming invigorates the rural economy, generates employment and local food links and uses half the carbon per unit of food produced compared to conventional agriculture.

Organic consumers eat less meat and less fat and their lifestyle choices extend to include recycling and energy conservation. They are more likely to shop at farmers markets and support box schemes. They purchase sustainable-produced non-food products. They eat more fruit and vegetables and wholegrains. They cost the NHS less because they think preventively about health. They may start on the organic way because they don’t want to risk feeding pesticides to a new baby, but they carry on because they know it’s the right lifestyle choice. They never regress. They are true radicals. They ‘walk the talk" of sustainable living.

Our company pays about £20,000 a year to the Soil Association for certification and a further £20,000 to the Fairtrade Foundation. It’s money well spent. These organisations lead the opinion-forming process, using the slenderest of resources but winning the argument because people know they are right and trust their names on our labels. The government should do more to support such NGOs. It should encourage healthy eating. It should steadfastly mandate clear labelling so that aware consumers can make informed choices about GM, pesticides, trans-fats, additives, hormones and country of origin. It should move subsidy from production to environmental benefits – and not at the tiptoeing between pillars rate under CAP modulation. It should tax aviation fuel at the same rate as fuel for land and sea transport.

If food is exported from a country that subsidises that food then the full (Producer Subsidy Equivalent) PSE should be charged. This one measure alone would transform the economic prospects of all the world’s farmers. Oh, if only one developed country had the guts to break ranks at Cancun and call for justice in this area. But it won’t be the US, Germany or France.

The GM argument would evaporate – GM agriculture is totally dependent on heavy subsidies. Without them it doesn’t make sense. Even with them, it doesn’t pay. American farmers need 5 times the level of subsidies they needed in 1996 when GM crops were introduced. Monsanto is on the ropes, technically bankrupt. GM just extends the lifespan of a failing agricultural paradigm

Fair trade for all farming will inevitably lead to fragmentation of large holdings and a decrease in farm size. This will repopulate and revitalise rural economies. Britain’s entry into the CAP in 1973 led to thousands of smallholdings being absorbed into large holdings and the associated housing being sold off as second homes. There needs to be a relaxation of the planning constraints on legitimate homebuilding on farmland.

Organic producers have nothing to fear from a radical and honest approach to free and fair trade. There is much to gain from an orderly retreat from the short-sighted interventionism of the last 5 decades. The Soil Association welcomes government policy that moves towards true sustainability.

• Ethical procurement by the public sector is essential. This sector should be leading by example and utilising products such as organic produce and renewable energy.
• The debate should not be about consumption per se but how consumption can be reduced.
• The government should issue triple bottom line reports, which should provide a strong sense of accounting between health, well-being and economic indicators.
• The Green Tariff has been slow to grow even though it has captured a market of £1million. Businesses need to take incentives and identify opportunities in risk, branding and reputation management.
• Opinion polls suggest that the general public is genuinely supportive of ethical goods, this enables the government to be more bold in its approach. There should be an increase in public information about goods and clearer labelling.
• The EU/Eco-label is flawed. The information provided on labels is not adequate. Labels are most effective when they are designed with the product in mind. Customers like to know what issues are being addressed. The Yes/No label works well, for example the labelling for timber is black and white giving consumers one level of choice. The retailer procurement policies are an essential tool and yet are underplayed. Environmental Impact Assessments of products produced in the UK is mandatory, and yet there is no EIA required for imported products.
• Inclusiveness and a holistic approach to sustainable decision-making is needed, with all government departments working together. The consumer also needs to be actively integrated into policy-making. Government should assess public values and interests to assess relevant labelling schemes.
• The old green movement ethos suggested that ethical purchasing meant compromise, sacrificing benefits for the greater good. Ethical consumption does not have to mean compromise. Bedzed clearly produced lifestyle benefits, which were fashionable and cutting edge. The ethical product needs to be of high quality to emphasise the lifestyle benefits and enhanced quality of life it will bring alongside its positive ethical values.
• Budget and convenience in daily life is the main motivator behind consumption habits. Disadvantaged groups in society lack control over their quality of life, although these have a low environmental impact since they consume less. Individual decision-making is never going to drive the sector. Trust in the government and business is low. Schools are a great source for awareness-raising as parents are much more likely to take an interest when educated by their children.
• Loans are available to low-income families on benefit to purchase second hand products, which are energy inefficient. This does nothing to promote green tariff. Instead, more should be done to encourage positive purchasing by low-income families.
• Consumers don’t want more factual information on product labels. What is needed is clear labelling with short cut information that outlines the benefits and why it is beneficial to the environment.
• Consumers are getting the wrong pricing signals, for example low cost European flights do not reflect the negative social or environmental impact that they have. Each government department should have a strategy document, which encourages annual sustainable consumption reporting. The government must make bolder use of ‘sticks and carrots’ in tackling waste and further implementing variable charging. Ministers should adopt more ‘green lifestyles’ thereby set examples of sustainable living.
• Social and environmental issues come second and third to economic drives. There should be a curb on advertising negative products to vulnerable groups such as children.
• The government needs to demonstrate that sustainability is essential through policy and procurement.
• Environmental reporting for companies must be made essential and government should do more to instigate effective monitoring processes with penalties attached.