SDG #12: Responsible consumption and production | Strategic Risk | Deloitte

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SDG #12: Responsible consumption and production

Sustainable Development Goals Blog Series

On January 1st, 2016, the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development officially came into force. Over the next 15 years, with these 17 goals, countries will combine efforts to end all forms of poverty, fight inequalities and tackle climate change. In this article we aim to familiarize you with SDG #12: Ensure sustainable consumption and production patterns.

By Erica Kostense Smit and Robbin-Jan Haar | 15-01-2018

What?

SDG #12 relates primarily to promoting resource and energy efficiency both in consumption and production. This implies that the societal responsibility for SDG #12 does not only relate to businesses, but also to consumers. Doing more with less sounds as a simple return on investment. Returning less follows the societal trend towards a circular economy, which is key in maintaining our current standard of living. There are huge opportunities to improve energy efficiency, reduce landfill, increase recycling and reduce water spillage globally, yet they may hardly be known. This blog tackles some of these opportunities related to SDG #12.

Why?

For businesses, there are multiple reasons to get engaged with SDG #12. Please find below two of them:

Increase savings
Many organizations start reducing their carbon footprint not only out of an idealistic drive, but also simply because it reduces costs. In western businesses, quick wins often have been established: adjusted heating systems or lease contracts that involve electric cars. However, we still see many examples that not all opportunities are detected and utilized. Office waste, for example. In the Dutch practice alone we have seen percentages of residual office waste in comparable client situations that range between 10% - 60%. This can actually cost the organization a large sum of money. Lighting would be another example: the UN indicated that by switching to energy efficient lightbulbs alone, 50% to 80% of light-related energy could be saved1. These are just simple mainstream examples but there is a world out there loaded with possibilities to reduce both costs and carbon footprint at the same time.

Create economical and societal value
A trend is noticeable in which organizations focus on adding value in the eco-system. Within this approach, responsibility is taken by organizations on social, ecological and economic impact. From source, to end use. By creating better insights in areas of influence, positive effects can be increased and negative effects reduced in- and outside of the boundaries of the organization.

How?

There are three actions that businesses may take in order to contribute to the realization of SDG #12 right away.

1. Economic and societal value
You need to know the potential in order to see the potential. Many companies simply do not know that their energy consumption is above par or where their waste is going to. Can we benchmark recycling rates? Do you know where your waste ends up? And what part of production is most damaging to our environment? For that reason, it could be very insightful to conduct a Life Cycle Assessment (LCA) for your main products or services. This way, you know where in the supply chain the highest CO2 reduction can be achieved. Technologies such as Internet of Things (IoT) combined with dashboarding can give your organization real-time insights in your performance on SDG #12, even across your supply chain.

An organization is as sustainable as its third parties. If that third party is the warehouse you have contracted with packs your products in boxes double the size of the goods you sell: your organization may not be as sustainable as you think. So, when you know your own facts and figures, it may be time to get to know these from your suppliers and clients as well.

2. Energy efficiency
Besides the obvious, and still not completely utilized opportunity of upgrading to renewable energy sources and efficient heating and lighting plans for an organization, the supply chain offers a broad ranges of improvements. An example of influencing the eco-system on energy efficiency, which has become more pressing in current society, is the issue of online delivery and returns for e-commerce retailers. The average ecommerce-wide return rate lies between 25% to 40%, while the return rate for brick-and-mortar stores averages around 9% 2,3. One may argue that returns are made too easy compared to driving back to a store, parking your car or stalling your bike, and waiting in line in front of a counter where you have to sign a receipt before your return is accepted. Yet consumers demand online retailers to make returning their goods easy, and retailers are also incentivized to do this. The reason for this is that fast and easy returns lower the risk of selling against reduced profit margins4.

Returns can be made very efficient and relatively emission-friendly from a supply chain point of view, yet the real issue with returns starts with the consumption of the product. Return-awareness may therefore be one solution to the problem, as it encourages potential web-shoppers to rethink their consumption.

3. Resource efficiency
The same challenges for energy efficiencies are valid for resource efficiency. Luckily, with the growing attention and awareness of the circular economy, more and more companies see the need and benefits of embracing “circularity” in order to preserve resources. Very often we see that this can be a difficult concept to grasp. Implementing a whole new circular business model can also be challenging. In fact, a recent study showed that the barriers to implementing a circular economy are predominantly of a cultural nature.


However, we feel that every step in the right direction is valuable. No matter how small the environmental benefits, since it also contributes to awareness. This in turn influences the culture as well. So, whilst asking yourself the necessary questions whether your current business model is sustainable in a circular economy, there might be actions you can take right now. For instance: does your purchase department take circularity into account? Do they have mandate and budget for this? Is it stimulated? How are recycling rates in your company? Below average perhaps, and if so, why? Have you asked your recycler for insight into your waste streams? Is the design and marketing department aware of the impact their choices have on, for example, recycling possibilities of products?
Sometimes it can be as simple as making a plastic bottle translucent instead of black so it can be recycled. Another example would be to provide extra bins in order to avoid that people use coffee cups as mini bins during the day, in order to throw it all out as residual waste at the end of the day. Very often, you personnel will have multiple suggestions for small improvements. Listening to these and taking action might have a bigger impact then you can imagine.  

 

Reporting is key to enhance impact

Regardless of your organization’s size, profits or industry, we believe reporting on your organization’s SDG #12 performance might just be the start in enhancing more sustainable consumption and production. It might just be the start of putting SDG #12 into action, making an even larger impact than before. Wonder how you can enhance your impact? Get engaged with SDG #12.

Sustainable Development Goals Blog Series

This blog is part of the Sustainable Development Blog Series: a blog series that highlights the 17 SDGs one by one on a biweekly basis. In these blogs you will find more information about each SDG, why it is important for your organisation to contribute to the achievement of it, and specific examples of how you can do that.

More information?

For more information about the Sustainable Development Goals and what your organisation can do to contribute, please contact Anne Huibrechtse-Truijens via ahuibrechtse@deloitte.nl / +31882882071

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