The world is on track to both quadruple its GDP and to triple consumption of natural resources by 2050, according to new research by World Resources Institute. Experts project Earth will be home to 9 billion people in three decades, with the global middle class totaling 3 billion by 2030.
And business growth is grow in kind, as it capitalizes on the fast expansion of consumer-driven markets. “The problem is that the planet’s natural systems and finite resources cannot keep up,” WRI concluded in its report released last week. A change in current business models is essential in order to avoid added stress on the environment.
WRI researchers dubbed unchecked consumption “the elephant in the boardroom,” and the NGO said it hopes to “normalize the topic” so companies can begin to explore alternative models. Just 15 years ago, climate change was the big corporate elephant, but now over 200 multinational companies have set greenhouse gas reduction targets. An alternative to growth driven by greater and greater consumption is the next challenge for business leaders.
“The hard truth is consumption is a critical issue for companies to be sustainable in the long term,” Kevin Moss, global director of WRI’s Business Center said in a statement. “Business models that rely on unchecked consumption and unlimited resources cannot last – they will be replaced by better models that deliver more value with the resources available.”
Fast fashion: A case study in unchecked consumption
WRI points to fast fashion as an example of how business growth driven by unchecked consumption is just not sustainable. Take the U.S., where the average household spends about six times more on clothes than people in an emerging economy like Brazil. The amount of clothes the average consumer buys increased by 60 percent from 2000 to 2014. And they now keep the clothes half as long.
Fast fashion companies like Zara put out 50 to 100 micro seasons a year. And that creates “an enormous amount of waste,” says WRI.
The global apparel industry is worth anywhere from $900 billion to $3 trillion, depending on the figured cited. But the toll the industry has on the environment is clear. It accounts for 10 percent of the world’s GHG emissions, uses 1.33 trillion gallons of water for dyeing processes annually, and sends about 48 billion to 144 billion square yards of fabric from factory scraps to the landfill every year. Just one mill can use 200 tons of water for every ton of fabric during the dyeing process, and release up to 72 chemicals into the local water supply.
The fashion industry needs a radical shift, says WRI . Clothes designed to last longer would both limit environmental impacts and create jobs. Patagonia’s Worn Wear program employs 45 people who make about 40,000 repairs on clothing a year. In 2008, sustainable design consultant Kate Fletcher coined the term slow fashion. A good example of a slow fashion company is U.S. based Zady. One of the company’s t-shirts is made in the U.S. by environmentally and labor friendly suppliers with U.S. grown organic cotton spun by a family cooperative.
Companies need to start addressing unchecked consumption
WRI gives three recommendations for companies:
- Do the math about their dependency on natural resources and the limits on business growth.
- Take a leadership role by changing the conversation with key stakeholders.
- Transform their business to one that can thrive in a resource-constrained environment.
A good place for companies to start is to have a conversation about the ecological limits of consumption-driven business growth. Most companies are simply not talking about it.
A recent Danish study found that only around 5 percent of companies refer to ecological limits in their corporate responsibility (CR) reports. And when companies did refer to ecological limits in their CR reports, they failed to specify references to either ongoing or planned changes in their activities as a result of recognizing the limits.