Sustainability, more power to the consumer

Sustainability, more power to the consumer

A New York la quindicesima edizione dell’#EnelFocusOn. Con Cyrus Wadia, Sustainability leader, innovatore e scienziato, siamo andati alla scoperta delle scelte dei consumatori, sempre più attente alla sostenibilità dei prodotti che acquistano

As consumers, there is power in each and every one of us that's used whenever a purchasing decision is made. 

In the latest edition of #EnelFocusOn on April 11 2019, we travelled to New York City. Together with 10 influencers from six different countries, we discussed the topic of “Embracing consumer demand for sustainable products.” Now in its 15th edition, the Enel Focus On has passed an important milestone: a total of 10 million people have followed the series of events via live stream.

Consumer demand is power. Actually, it’s a superpower. If we are aware of the environmental impact of what we buy, when we decide how and what to consume, then we can make an impact on the health of the planet.

Antonio Cammisecra, CEO of Enel Green Power, opened the discussion, highlighting the problem that climate change has not been adequately recognized. A survey by KRC Research, conducted in March 2019, demonstrated that still a very low percentage of the population is concerned about the most tangible effects of environmental deterioration, such as water pollution (64%) and air pollution (59%). The survey also revealed that just over half of the respondents were unconcerned about climate change in general. Moreover, Cammisecra stressed that the apparent lack of urgency to take action, even though time is running out, is effectively leaving future generations to deal with solving these problems.

It is essential that action is taken now, but whose responsibility is it to do so? A third of the population of the United States think that it should be governments and supranational organisations, 27% also mention large corporations and 25% say the solution is in the hands of each of us. Most likely the right answer is: all of the above.

 

Renewables, informing the consumer

“Since creating Enel Green Power, we have managed to show the advantages and the necessity of renewables to governments and businesses,” explained Cammisecra. “The company has seen the remarkable growth in the number and capacity of its Power Purchase Agreements (PPA) with the large energy-consuming companies, also called C&I (Commercial and Industrial) clients. The figure increased from 273.6 MW in 2014 to 860.2 MW in 2018 and we now supply clean energy to companies of the calibre of Facebook, Citi and Anheuser-Busch.

It is a challenge that we have risen to successfully, but in the coming years we will have to face another comparable test: convincing an increasing number of customers. We are not yet seeing any clear signs that consumers are basing their purchasing decisions on the environmental impact of the products they buy and this is the area on which we need to focus: changing the mindset of the customers and making them aware of the need to consume products with a low environmental impact. And until this happens, customers must be informed about how each product is made, how much and what type of energy is used to do so and whether – and what percentage of – the materials used are recyclable. Therefore, it is extremely important that companies communicate all of this information. Spreading the message of the need for sustainable consumption in order to be able to leave a legacy for future generations is an enormous opportunity, as well as a moral duty for all today’s companies.

 

Brands and the new generations: the growing demand for sustainability

Our keynote speaker was Cyrus Wadia, sustainability leader, innovator and scientist. For Wadia, “sustainability will be the fulcrum for the growth of corporations in the 21stcentury. Many companies are already investing in it, but no organisation has found the perfect formula, and there’s still much work to be done.” Wadia is one of the most respected voices in the field of sustainability. He has served as Vice President of the Sustainability and Innovation division at Nike and as a consultant to the White House on renewable energies and materials.

According to Wadia, the growing use of digital communications platforms has led to a disproportionate increase in demand for sustainability. Wadia focuses his efforts on Generation Z (those born around the end of the last century and the beginning of this one), a group that has far more exacting requirements when it comes to corporate behaviour. Young people are demanding that brands communicate their values clearly and they expect corporations to use their enormous power to try to change the fate of the planet for the better. Around 90% of millennials say they are willing to be loyal to those brands that have adopted a cause, and they are prepared to change their own purchasing habits in order to reduce environmental impact.

 “For companies, it is a question of vision, and therefore of enlightened leadership,” said Wadia. “They must learn to think about the future not in terms of tax years, but in terms of generations. And they need to start doing this now. The question they need to ask themselves is ‘What world will we be leaving to our grandchildren if we continue to do business in the way we do today?’”

On this front, Wadia believes that corporations can count on an important ally. “Today, technology gives us the possibility to create extremely high quality products, but with an impact that is approaching zero. Production using energy from renewables is fundamental, but it is also necessary to focus on open and sustainable innovation. For example, to develop manufacturing processes that result in almost no waste. This is what Nike has done with some models of shoes. To achieve this requires cooperation and a willingness to become part of an ecosystem that extends well beyond the confines of the company because it is impossible to act successfully alone.”

 

Sustainability produces value

It is not a simple process, nor is it fast. Nevertheless, as Roberto Deambrogio, Director of Communications at the Enel Group, observed, it is a change that will produce value. “Creating genuinely sustainable products is becoming increasingly important and in turn, contributes to accelerating demand: this is what we are seeing with our renewable energy and our products and services based on complete sustainability that promote a new sense of wellbeing and generate even greater demand.”

“We must work on two fronts,” continued Deambrogio. “The big companies must make their productive systems increasingly sustainable. At the same time, they must make consumers more aware of just how important buying goods and services which are produced in a sustainable way is for the future of all of us. In other words, we must create a system capable of promoting a culture of sustainability, and in doing so, generate a virtuous circle of supply and demand.”

Finally, Deambrogio underlined how sustainability always generates value for a company: it facilitates reductions in production costs, increases profit margins, reinforces customer loyalty and, on the financial front, enables access to loans with lower interest rates.

In this overall picture, the use of renewables, which today are far cheaper than energy from traditional sources, contributes to reducing business costs and reducing the environmental impact.

Anheuser-Busch, one of the world’s largest beer producers, is in partnership with Enel Green Power, brewing its Budweiser beer with 100% renewable energy in the U.S. Describing this commitment, was Jodi Harris, the company’s Vice President of Marketing Culture & Learning. She explained, “Our mission has always been to make America the best place to live in the world. We believe that the most effective way to achieve this is by producing great beer, while reducing our environmental footprint.” The leading beer producer has made this message the core of its communications strategy and it has been received enthusiastically by a large number of the company’s customers.

Jodi Harris’s words were echoed by Valerie Smith, Global Head of the Corporate Sustainability sector at Citi, one of the world’s largest financial services companies. “We have pledged to completely decarbonise our activities by 2020. Initially we considered this to be a marginal goal but today it has become a key feature of our growth strategy. Renewable energy is a cornerstone to build any sustainability project that a company – including our own – would want to develop. It is the key element that gives us the power to imagine anything.”

Imagining, in this case, means changing for the better. And it is the capacity for change that is the very definition of power.

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