SUSTAINABILITY
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THERE ARE ALSO FASCINATING QUESTIONS AROUND WHETHER WE WILL SEE AN EMERGING TREND TOWARDS ‘HIRE AND SERVICE’ MODEL
There are also fascinating questions around whether we will see an emerging trend towards a ‘hire and service’ model. So a customer might buy a vacuum cleaner on a rental basis rather than own it and the company will maintain it for them, extending its life. In clothing, we have seen M&S launch their ‘shwopping’ scheme where customers take old clothes to a charity shop and receive a small credit which they can then spend at M&S again. This initiative combines the concept of recycling with that of helping charity and doing social good.
Vincent Neate Partner, UK Head Of Climate Change and Sustainabilty
T: +44 (0) 7694 3256 E:
vincent.neate@
kpmg.co.uk
Vincent heads up KPMG’s Climate Change and Sustainability (CC&S) practice in the UK and Europe. He leads a cross- sector team with a particular focus on FMCG. Vincent’s subject matter expertise crosses a wide spectrum of issues arising on the CC&S agenda including energy effi cient and security; water and resource scarcity; demographics; environment and biodiversity; human rights and supply chain; climate policy and fi nance; and the business model in the future that will be very different from the world we operate in today.
So CEO tenure actually becomes an aspect of a company’s sustainability. It’s all about making connections, linking things up.
Another thing we fi nd is a disconnect internally. The chief sustainability offi cer may never have spoken properly with the CEO or CFO. They may simply be seeking approval for budgets rather than really discussing what impacts sustainability can have on the business strategy. Dialogue needs to be opened out across the business. Our sustainability room is a way of trying to facilitate that amongst our clients.
The consumer goods industry is in many ways at the forefront of the sustainability agenda as it caters for an increasingly global market and as technology expands the possible. Take a manufacturer of washing machines. What kind of machine should they be producing? Short-life machines that last for say three years, that are cheaper and readily recyclable? Or machines that can last for ten or twenty years and are more expensive, perhaps with upgradable parts and components?
These ideas are breaking down the concept of ownership and making the life of a product more fl uid and extendable.
In developing markets, we have seen washing powder begun to be sold in sachets or by the scoop. This makes goods more accessible for those on low incomes with relatively little spare change each week for ‘luxuries’ like soap or washing power. While in developed markets, the rise of concentrated products that last longer and come with less packaging is already well-established.
Is all of this sustainability or good economics? In the best of worlds, it’s both.
Companies need to fi nd ways of aligning commercial strategies with a sustainability approach.
And consumer markets companies need to be right at the heart of the debate.
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
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