Getting ready to embark on the sustainability journey
Today, sustainability has become a trend. Let us quickly review what lies behind the concept before moving forward.
Sustainability originated from the Brundtland Report published in 1987 which defines it as “a [form of] development that satisfies the needs of the present without adversely affecting the conditions for future generations“. Since then, it has been widely used to promote environmental protection programs, but also to support more inclusive economic and social policies worldwide. In 2016, the different dimensions of sustainability have been enshrined into the seventeen Sustainable Development Goals (SDGs) adopted by the United Nations with the objective to build up a livable and just future for all in 2030. They now serve as a framework for world decision-makers including politicians, heads of non-governmental agencies and companies´ leaders, to catalyze sustainability initiatives on-the-ground. Among these goals, SDG 13 on Climate Action has been the focus of much attention. It is a bridge with the Paris Agreement voted in 2015 by which all countries have committed to limit global warming to well-below 2 degrees Celsius at the end of the century.
What is at stake for the private sector in the sustainability debate?
During the past few years, businesses have also been active in setting-up sustainability strategies to reduce their impacts on the environment and to maximize their positive externalities for society. To date, approximately 2500 companies in the world have taken climate commitments, of which more than 600 have committed to set a science-based greenhouse gases emissions reduction target. With growing pressure caused by resource scarcity, digital transformations and persistent inequalities, the meaning of sustainability has progressively changed for the private sector. In his letter to CEOs in 2019, Larry Fink, the chairman of BlackRock, described a company’s purpose as “its fundamental reason for being — what it does every day to create value for its stakeholders […] and the animating force for achieving profits”. It means that investors do not expect anymore companies to produce only financial results. Their environmental and social performance is also scrutinized carefully. More and more, other groups of stakeholders are having the same approach: customers, who are looking for products with a positive footprint for the environment and society, and employees, who are willing to contribute to the greater good through their business conduct. Because every company is primarily aiming for generating profits, they are working on developing the right business case and value proposition to ensure the success of their sustainability strategies. To do so, each industrial sector — from transportation to consumer goods and tech — has started to implement the appropriate internal organization, financial instruments and employees´ incentives according to their specificities. Some of them have launched sectoral alliances like the Step Up Declaration which brings together several key actors from the tech industry including Autodesk, Salesforce, Uber or Wework, in order to “harness the 4th revolution to rapidly reduce greenhouse gases emissions”.
Going the circular way
Among the business models that are promoted today to respond to sustainability challenges, circular economy ranks among the first. This model consists in keeping materials in use for as long as possible by improving their design, by reusing, refurbishing or repairing them, and by recycling them at their end-of-life so that they can reintegrate a new supply chain. Circularity also means optimizing all flows that are involved in production processes, like energy and water. By doing so, it can potentially decouple economic growth (and thus job & wealth creation) from negative environmental externalities. A study conducted by the Circle Economy an Ecofys concluded that circular economy could contribute to reaching half of the effort needed to achieve the goal of the Paris Agreement. Moreover, according to Accenture’s projections, it could help unlock 4.5 trillion dollars USD in new economic growth by 2030, by means of circular supplies, resource recovery, product life extension, sharing platforms and product-as-a-service.
While a growing number of countries are standing-up against waste pollution, the challenge is big for companies which are responsible for bringing consumer packaged goods on the market. Circular economy could turn this situation to an advantage by unlocking potential to make profits from waste reduction, reuse and recycling. At the 2018 World Economic Forum in Davos, leading brands, retailers and packaging companies committed to work towards 100% reusable, recyclable and compostable packaging by 2025 or earlier (including Evian, L’Oréal, Mars, PepsiCo and the Coca-Cola Company). In January 2019, about 30 multinational companies launched the Alliance to End Plastic Waste through which they will invest 1.5 billion USD in plastic waste treatment infrastructures & innovation, clean-up campaigns and education. More recently, Carrefour committed to use only recyclable or compostable packaging for its products by endorsing the French government National Pact on Plastic Packaging by 2025. Some companies have even set-up specific collection channels based on take-back systems (in-store or mail-in) or collaborations with NGOs and recyclers. For instance, Procter & Gamble received a Momentum for Change Award from the United Nations for commercializing Head & Shoulders shampoo bottles made from ocean plastic waste collected on the beach by volunteers. Other brands like Häagen-Dazs, HP, Dove or Colgate are going towards reusable or refillable packaging. To scale-up circular products delivery for these pioneering brands, the American recycling company Terracycle launched a few months ago the platform Loop, an online marketplace dedicated to selling their products.
What now?
The Sustainable Development Goals have set the agenda for 2030. To reach them, we should act collaboratively, and circular economy seems to be the good approach to do so. Beyond being an environmental protection strategy, it is a new economic model of growth which can have a wide array of positive impacts on society as a whole, including job creation and reduced inequalities. Given its role as a platform between producers and consumers, Glovo is in a unique position to work jointly with its stakeholders along the value chain to help them drive their sustainability efforts. We are new at this, but we are convinced that it is the right direction to take. There is a long road ahead of us and time is running out so let’s take up the sustainability challenge now!
