Posted by: Nathaniel | September 15, 2008

Question of the week: who needs to take the lead on sustainable consumption – producers or consumers?

This month’s Fast Company magazine has a great interview with Jeff Swartz of Timberland. Swartz has long been seen as something of a poster boy for how companies can incorporate values of human rights and environmental sustainability into their supply chain and remain succesful. But as financial pressure mounts on Timberland, the article asks how long he can retain his job if he can’t keep financial return callibrated with social mission.

There’s a lot of great stuff in the article – including his termination of Timberlands relationship with Chinese manufacturer kingmakers – but it’s a comment toward the end about the consumer that really grabbed my attention:

So the consumer shares the blame?

The consumer says, “I’ll have a conversation with you; it will be all on my terms. Your product is going to have to be visually beautiful, technically perfect, and distinctive. And it has to be available where I shop at a price I’m willing to pay.” Now, if it is all of those things, you gain the permission, in the one minute the consumer deals with your brand, to devote about 10 seconds to the issue of values. And if you miss any step along the way, you are talking to yourself, which is a terribly sad place to be.

Its a fair point: people are thrilled about the social values business can create, but only if the product is still just as convenient to find and (more or less) as cheap to purchase. In some ways, it seems to me like a ‘have your cake and eat it too’ mentality where we get the moral satisfaction of thinking ethically even though we’re not willing to make trade-offs (or, to use another word, sacrifice).

The flip side is, of course, while consumers are talking to each other more and more, businesses still have incredible power to speak directly to consumers and shape demand – whether its around a new product line or ethical production in general.

So here’s the question: how do we increase the correlation between the social value of a product produced ethically, sustainably and responsibly with the economic value people are able to put forth. And not just in specific but in general? Who has to take the lead – consumers or producers? And how do they do it?

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Responses

  1. I think you have to consider ability to bring about any proposed change. Going after low-hanging fruit such as companies with brands that coincide with sustainable consumption and targeting social conscious consumers with enough income to spend on the goods and access to resources to be aware of social responsible companies will allow early successes and help to establish best practices. It’s no good to demand that only companies begin to produce products for sustainable consumption when there is not sufficient demand in the general public or enough knowledge about what constitutes a well-made product made in a socially responsible way. It doesn’t help to demand that consumers, a demographically and socioeconomically diverse groups, change that purchasing practices if they don’t have the knowledge, resources and access to products for sustainable consumption.

    You have to focus on both the producer and consumer that have the ability to start making changes now. Companies like Timberland are taking first crucial steps and will be rewarded for being pioneers. Their success can help contribute to adoption of social responsible practices in their industry (other footwear industries), related industries (camping, outdoors and adventure sports), and companies with similar target audiences. Consumers help to drive the demand through brand loyalty, word-of-mouth marketing, and third party advocacy (magazines, social networking sites and other things that review products).

  2. Consumers aren’t in a position to fairly evaluate the social consequences of most of their purchases. With respect to their investments, investors are such a position.

    At issue is the trustee relationship with the stock holders. Social responsibility is a long term investment. Wall Street lives quarter to quarter. What’s needed is a capital market based on social responsibility, not necessarily a green version of the NASDAQ but a clearinghouse of environmental and social responsibility data for potential investors. In this way, the objectives of the trustee relationship with the stockholders will become more inclusive of social values.

  3. As the CEO of a publically traded company, subject to the every 90 days evaluation, you can only “go first” if you hold tight to a deep belief that there will be paying consumers of some scale who “go next.” In the last 15 years or so, my belief that for-profit business like ours can generate shareholder returns in a socially accountable fashion has found mostly derivative proof, rather than direct validation from consumers.

    We’ve watched the food industry incorporate organic farming into their business system, effecting a sharp pivot in the supply chain, and we’ve seen consumers validate that shift by virtue of their purchasing decisions. But in Timberland’s “space” of shoes and clothes, in the same 15 years, mostly what we’ve seen is incrementalism–refinements to existing models, driven far more be activists and “go first CEOs” than by consumers.

    So, codes of conduct exist and are enforced (huge step forward, real progress in the last 5 years), and even better, suppliers/customers are beginning to collaborate to create supply chains where dignity and decency are part of the metrics managed. Occasional outrage from consumers when something really bad gets uncovered, but no brand loyalty or brand preference for responsible supply chain management. None.

    And, organic cotton has crept into the material lexicon, and Zque certified merino wool is gaining visibility, and toxins are beginning to get pushed out of the garments we make and the leather we tan…and all of these are very positive steps, but to date, and I am talking 15+ years later, this is mostly incremental progress, not demanded by or even particularly validated by, consumers.

    Activists? You bet. Governments? Some, not uniformly and not particularly effectively. But consumers?

    15+ years later, this much is clear to me–you can make powerful, “go first” choices to run your business responsibly. But if you can’t make responsibility sexy and emotionally valuable to your consumer, you risk being well intended, even earnest–just not sustainable.

    Our conclusion is, be responsible, and be interesting. Consumers appreciate responsible, but they respond to stimulating. If the food guys could make an odd shaped, non-waxed slightly wormy organic apple sexy–it is up to us to make sexy a great pair of boots, using renewable energy generated at the factory, with a sole made from reclaimed tires from the landfill, in a factory that accords each worker dignity and more.

    The CEO has to go first. But sustainable capitalism is not a consumer benefit. Go first, be sexy.

    Yikes. Sexy, sustainable boots. We’ve got work to do.

  4. […] right now. As Jeff Swartz of Timberland articulated on this blog, consumers respond to outputs – the quality and convenience of the product – not inputs – like the […]

  5. Your webLog is excellent. I m gonna bookmark, gracias. Keep doing on it.

    • Larraine – Thanks for your kind words. We’re excited to keep the conversation going. Can I follow your writing as well?


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