Procurement Professional is the official publication of CIPS Australasia

#80 - The world's shoppers are still buying green - part 2

16 Oct 2009

A prevalent debate at the moment questions is CSR or corporate sustainability still relevant for corporates during times of economic turmoil and stress? Can we afford to address it at all? Can we afford not to in the long run? 

Former NZ Prime Minister Helen Clark laid down her policy at the CIPSA regional event in Sydney way back in June 2007. “Consumers in future will punish organisations that do not offer a sustainable option” she said, adding that sustainability was not an option, nor a compliance issue, nor even a risk issue any more. But was an issue of business common sense to meet changing consumer demands – in this case towards sustainability.

She was right and the world’s shoppers are still buying green. The Green Pages site offers new evidence all the time   [http://www.thegreenpages.com.au/  and see The Buyer's Blog #5].

This quotation though is originally attributed to Hilary Clinton, or President Obama’s chief of staff, Rahm Emanuel – who also said “Never waste a good crisis”.

Maybe that is what Cadburys thought in launching the ‘fairtrade’ choccy bars. All their Dairy Milk chocolate will be ‘fairtrade’ approved by Easter 2010 they say  [http://www.fairtrade.com.au/cadbury-announcement/cadbury-fairtrade-q].   This guarantees that the coca pickers at the tip of their supply chain in the Ivory Coast will get a fair wage for their work and no longer a measly few cents per day for their back-breaking toil in the harsh sun. Cadburys are saying there will be no increase in price in their choccy bars as a consequence. In the past, though, and elsewhere in the world, suggestions of around a 25% price premiums have been mooted and researched for ‘ethical choccy’ bars (think of a 25% price increase as from $2.20 to $2.75 for example = just 55c).

Now Starbucks too are on the band wagon, as they recently doubled their sourcing of ‘fairtrade' coffee beans to 18 million kg per annum. They say they want to ethically source all their coffee beans by 2015 [http://www.time.com/time/specials/packages/article/0,28804,1921165_1921239_1921193,00.html].

Consumers want more ethical products. And the suppliers are learning. And consumers don’t mind paying more if that’s what it takes. Think of organic produce in the supermarket – which still sells, even now. In the end, markets segment. Those consumers willing to pay more can and will. 

Ethical sourcing and provision is the central theme behind the B4MD message [www.b4md.com.au] and the work World Vision have been doing to promote ethical sourcing at the end of corporate supply chains as a solution to alleviate third world poverty [www.worldvision.com.au ].

Clearly leading consumer brands have latched on to the habits of shoppers who are still buying green, despite the harder economic times. The issue of sustainability is clearly still relevant. Moreover, buyers will likely pay a premium in future for a more sustainable choice. We have been asking the right question all along. Just not getting the right answer. Corporate companies can afford to address sustainability, because ultimately many customers are prepared to pay for it.

How long will it take for the message to filter all the way through corporate supply chains I wonder?

The Buyer – posted 16th October 2009