The natural resources that Earth can generate are limited and not all of them can be regenerated. With the current way of production, distribution and consumption of goods and services many of them have also become scarce. To protect the planet Earth not only for current, but also for future generations, consumption of goods and services must become more sustainable. Businesses and consumers cannot go on like today, but we must learn to do more with less. But can we do well by doing better?
The Earth Overshoot Day, i.e. the date when the world population has exceeded the natural resources generated by the Earth in a year, is calculated annually. The date for 2024 is still undisclosed until 5 June, but it will most likely be late July. In 2023 that was 2 August meaning that 1,7 Earths would be needed to provide enough ecological resources to enable the current level of consumption. The development of the day has been quite radical, since fifty years ago, in 1974, the Earth Overshoot Day was on 30 November. [1]
In Finland, the 2024 Overshoot Day is to be April 12. A year ago, the Finnish Overshoot Day was March 31. Pushing the date back by almost two weeks later, is a reason for celebration. Still, it means that if the rest of the world lived like Finns, it would take close to four Earths to provide the required ecological resources. Energy production and consumption, transportation, and food production are the main reasons for the Finnish overconsumption of natural resources. [2] This sets a huge challenge to Finland because heating and subsequently energy is required due to the cold climate, long distances increase transportation requirements, and the northern location is not ideal for agriculture.
Sustainable consumption
To restore the balance between the consumption and the resource generation of Earth, the consumption must become more sustainable. United Nations Environment Programme (UNEP) defines sustainable consumption as “the use of services and related products, which respond to basic needs and bring a better quality of life while minimising the use of natural resources and toxic materials as well as the emissions of waste and pollutants over the life cycle of the service or product so as not to jeopardise the needs of future generations”. [3]
Freedom to choose lifestyle and the way how to consume must remain for the consumers. To influence the decision making on a voluntary basis, fact based and easily understandable information about the implications of the consumption decisions must be available. At the same time, society and authorities can steer, enable, and support sustainable choices by means of legislation, taxation and infrastructure building. [4]
Let’s have a look at Finland and heating as an example. In a country like Finland, heating is mandatory because of cold and long winters. Consumers must have the right to choose the way they want to heat their houses, but the decision making can be supported and encouraged with information about the impacts of different energy sources to sustainability and with legislation or higher taxation unsustainable choices can be ruled out. On the other hand, incentives, e.g., tax reductions or direct subsidies, can be used to encourage decisions for sustainable selections.
Attitude-behaviour gap
The decision-making process of buying, or not buying, sustainably more friendly products is not well-known. In addition to price, past experiences and availability of reliable information may interfere with the process even in the case of consumers who claim to do environmentally friendly selections. [5]
Only very few consumers are found consistently to make sustainable choices. Instead, price is decisive in the decision-making process and overrules, e.g., environmental considerations, and consumers tend not to select the most environmentally friendly option. This is called the attitude-behaviour gap. [4, 5]
Decision making, e.g., for the heating, is usually done based on many different factors, environmental issues being just one of them. Again looking at Finland, electricity plays a significant role in heating costs. Like in many other countries the price of electricity increased significantly in winter of 2023 which made the consumers take the cheapest available electricity contract just to afford warm houses regardless of the way how the electricity was produced.
A valid question is, if the companies act differently. In many cases, money is the best consultant in the decision making and while so, sustainable values may be set in the background also in the board meeting rooms.
Sustainable business
The responsibility over sustainable consumption decisions cannot be left to the consumers only but businesses must be involved. On the other hand, sustainable consumption offers a huge business potential and gives advantages for companies embedding sustainability into their way of doing business. In this way, money works for sustainable decision making.
How can companies do sustainable business then? Doing business in a sustainable way means that no negative impact is made to the surrounding environment, society, or communities. In short, doing well by doing good since solving environmental and social problems by means of business (doing good) gives economic business opportunities (doing well).
Sustainability in business means that the effects the business have on the environment and society target to make a positive impact on at least either of them. Generally spoken, good performance in either area tends to also improve the other area – and business as well. Doing well by doing good. [6]
In practice sustainable business can be, for example, utilisation of sustainable and recycled raw materials in production, reduction of greenhouse gas emissions in the operations, taking care of the personnel well-being both internally but also in the supply chain, supporting surrounding communities, and operating in a transparent and responsible way. On the business opportunity side, sustainability can offer unexploited business models, competitive advantages, and more flexibility in pricing and sales margin setting.
Sustainable business can be driven by willingness to reduce the negative societal and environmental impacts of their action or aspirations to improve financial performance. While doing this, the management must consider both external and internal benefits and disadvantages to the company bearing in mind that the environmental, social and economic goals can be controversial to each other. [7]
One of the first actions in stepping to sustainable business is to define corporate social responsibility (CSR). It describes how companies do business and how they take their stakeholders into account. CSR is a policy of social and environmental actions that come on top of legal requirements on a voluntary basis. [8]
According to the Sustainability in Finland 2023 survey conducted by FIBS (Finnish Business & Society) network the Finnish companies have realised the importance of CSR and embedded it into their strategies. Anyhow, the motivations and targets in CSR policies have proven to be difficult to turn to concrete actions. [9]
Despite taking sustainability more and more into account in development actions, the companies still stick too often to the old ways of doing business. Sustainability is hugely promoted and supported by the government and sustainability related achievements can be seen in the companies. Anyhow, the possibilities are still not yet widely recognized and the skills gap in the domain of sustainability is the biggest hurdle for the future. [9]
Conclusions
It is obvious that the consumption patterns must change to be more sustainable. High consumption countries like Finland can show the way and as a high consumption country has also a moral obligation to take serious commitments to reduce the environmental impact of consumption. At the same time, freedom of choice must keep in consumption as well but the gap between sustainable attitudes and consumption must be made narrower with the help of information sharing, legislation, and infrastructure. Simultaneously, suppliers of consumption products must keep on working to improve their social and environmental responsibilities because the responsibility for the sustainable consumption cannot be left to the consumers only.
References
[1] Past Earth Overshoot Days—#MoveTheDate of Earth Overshoot Day. (n.d.). Earth Overshoot Day. Retrieved April 5, 2024, from https://www.overshootday.org/newsroom/past-earth-overshoot-days/
[2] Suomen ylikulutuspäivä on huomenna. (2023, March 30). WWF Suomi. Retrieved April 5, 2023, from https://wwf.fi/uutiset/2023/03/suomen-ylikulutuspaiva-on-huomenna/
[3] Sustainable consumption and production policies. (2017, October 2). UNEP – UN Environment Programme. Retrieved April 5, 2023, from http://www.unep.org/explore-topics/resource-efficiency/what-we-do/sustainable-consumption-and-production-policies
[4] Honkasalo, A. (2011). Perspectives on Finland’s sustainable consumption and production policy. Journal of Cleaner Production, 19(16), 1901–1905. Retrieved April 5, 2023, from https://doi.org/10.1016/j.jclepro.2010.12.017
[5] Park, H. J., & Lin, L. M. (2020). Exploring attitude–behavior gap in sustainable consumption: Comparison of recycled and upcycled fashion products. Journal of Business Research, 117, 623–628. https://doi.org/10.1016/j.jbusres.2018.08.025
[6] What Is Sustainability in Business? | HBS Online. (2018, October 10). Business Insights Blog. Retrieved April 5, 2023, from https://online.hbs.edu/blog/post/what-is-sustainability-in-business
[7] Baumgartner, R. J., & Rauter, R. (2017). Strategic perspectives of corporate sustainability management to develop a sustainable organization. Journal of Cleaner Production, 140, 81–92. Retrieved April 5, 2023, from https://doi.org/10.1016/j.jclepro.2016.04.146
[8] European Commission (Ed.). (2001). Promoting a European framework for corporate social responsibility. Office for Official Publications of the European Communities.
[9] Summary: Sustainability in Finland 2023 Survey. (n.d.). FIBS. Retrieved April 5, 2023, from https://fibsry.fi/ajankohtaista/summary-sustainability-in-finland-2023-survey/
