Sustainable Business into practice

1. Definition of a sustainable business practice

What is a sustainable business practice? Sustainable business practices are those that allow companies to reduce their negative impacts on the environment while still allowing companies to make a profit. Starting from this definition, there is no single or standard way of turning a business sustainable. A sustainable practice can focus on very specific elements of the business, such as recycling, or be part of an entire and holistic strategy that applies to all the areas of the company, from the eco-conception to the Human Resources management, or distribution strategies.  However, we can overview here some of the major references in terms of business sustainability.

2. The Sustainable Development Goals and their application

We already mentioned the SDG as the major international policy in terms of sustainability. This policy has direct influence on the business sector. The Sustainable Development Goals Business Forum, hosted by the International Chamber of Commerce, UN DESA, and United Nation Global Compact was organised for the 5^th time in 2020, working specifically on the role of the business sector in the achievement of SDGs. In 2017, this Forum recognised the critical role of business in delivering on the promise of sustainable and inclusive development and declared: “The SDGs provide all businesses with a new lens through which to translate the world’s needs and ambitions into business solutions. These solutions will enable companies to better manage their risks, anticipate consumer demand, build positions in growth markets, secure access to needed resources, and strengthen their supply chains while moving the world towards a sustainable and inclusive development path.”

Thus, SDG is often promoted as business opportunity for companies. According to experts, achieving the global goals could open 60 market hot spots estimated at 12 trillion dollars by 2030 in business savings and revenue. At economy level, working on innovation, sustainable production and consumption, resource use and employment, will positively support the industry.

Now, implementing SDG in a business relies on very practical aspects that should be considered. The SDG Compass guides companies on how they can align their strategies as well as to measure and manage their contribution to the realization of the SDGs. This guide, developed by GRI, United Nations Global Compact, and WBCSD, presents the 5 key steps for implementing the SDG in business  (SDG Compass, s.f.).

Source: https://sdgcompass.org/wp-content/uploads/2016/05/019104_SDG_Compass_Guide_2015_v29.pdf

As shown in this infographic, the preliminary step for the implementation of SDG in business will be the understanding of the different existing goals.

Then, and as it is impossible to pursue all the goals at once, even if some of them can be interrelated, it is important to set priorities. For this step, SDG Compass recommend mapping the value chain of the business to identify the impact areas (for instance raw materials needed for textile production, suppliers, logistics, distribution, product use and end of life…). Then you should measure these impacts by selecting appropriate indicators, and use this data collected as a baseline to define your priorities.

Once your priorities are set, you should elaborate on your goals. These goals should be associated with Key Performance Indicators that will enable you to measure your progress and determine your level of ambition. This step should end with an announcement of your commitment to SDG.

Step 4 is about anchoring the SDG within the business and embedding the sustainability goals in all functions. As an example from the guide, if you chose to contribute to SDG nº12 (responsible consumption and production) by phasing out chemical products from your business, this should involve all the functions of your organisation, for instance, the R&D department, the supply chain, etc. Also, the guide recommends engaging in partnerships to reinforce the commitment.

The last step is about reporting and communicating about the SDG performance.

It is to be noticed that this method can be applied to any kind of initiative besides the business field, as to associations or particular projects.

Here are some examples of actions that are relevant to bring fashion businesses closer to the SDG:

Goal 1 (end of poverty): attention to decent work and wages of workers involved in the fabrication processes of the clothes. Work on company standards to protect workers.

Goal 5 (gender equality): On about 60 million garment workers worldwide, 75% are women, thus, special attention to workers security, fight against pregnancy discrimination or physical and verbal abuse in the workplace are fundamental.

Goal 6 (clean water): we have seen that water consumption is an important part of the pollution caused by the textile industry (dying, etc). Improving water management can support this goal.

Goal 12 (responsible production and consumption): Here the textile company can work on avoiding overproduction. An interesting work for instance is the one proposed by the Spanish company Deleite Wear, that reuse Horeca textile waste to produce new uniforms and merchandizing for this sector.

Goal 13 (climate action): care to the agriculture in the case of natural fibres, energy efficiency in the supply chain, local production…

Goal 14 (life below water): Work to avoid water contamination, but also actions to avoid release of microplastics caused during the washing of garments. Use of recycled plastics from the sea to create new fashion products.

Goal 15 (life on land): make sure that you respect animal welfare. Avoid furs.

Source: freepik

3. The circular economy: definition and principles

The concept of sustainable development is supported by and encompasses the concept of the circular economy, since everything circular is sustainable, and that “sustainability” is the final destination reached after having met the objectives along the way.

The circular economy proposes an economic and productive model based on sustainability and the saving of resources and energy sources. Goods are produced, consumed, recycled, produced, and re-consumed, entering a circular life cycle. It is a recent and increasingly widespread concept based on economic principles and other aspects such as the environment. In this way, the life cycle of products is extended.

In that sense, the concept of circular economy covers all stages of the product life cycle, from product design and production process, through transformation and consumption to waste management, recycling, and reuse. For example, an initial focus on designing products that are more resource-efficient throughout their lifecycles can make products more durable.

The circular economy also demands greater efficiency in production processes and here the focus is on seeking to reduce the environmental and social impact of production, such as through promoting innovative industrial processes or more sustainable supply. Thus, the Circular Economy is a global challenge and is considered both a new paradigm and a tool essential to achieve the responsible and sustained exploitation of material and human resources, maximizing the recovery of waste.

Source: Image by rawpixel.com on Freepik

There are a lot of definitions of circular economy, and all of them are correct even if they differ in some aspects. In general, we can point out that the circular economy is that economic model that includes all those activities aimed at:

• Minimizing the extraction of raw materials
• Producing efficiently with the lowest energy consumption, both products and services, with the longest possible life cycle and the lowest carbon footprint
• Achieving a lower carbon footprint.
• Maximizing the recycling of final products. In this case, the trend, as we will see later, must be reducing the waste produced as much as possible and even eliminating it.

In this way, the circular economy is any activity whose objective is regenerative from its design and that is capable of extend the life cycle of products, offering greater value to the user.

4. Circular Economy system diagram

The circular economy system diagram, known as the butterfly diagram, created by Ellen MacArthur Foundation, illustrates the continuous flow of materials in a circular economy. Circular Systems Diagram (February 2019)

Source: https://ellenmacarthurfoundation.org/circular-economy-diagram

There are two main cycles – the technical cycle and the biological cycle. In the technical cycle, products and materials are kept in circulation through processes such as reuse, repair, remanufacture and recycling. In the biological cycle, the nutrients from biodegradable materials are returned to the Earth to regenerate nature.

Technical Cycle

Different strategies can be distinguished that can be applied to all products and/or services of technical materials, such as: household appliances, machinery, cars, etc…

The most desirable under the circular model is to use those circles that are closest to the user: maintenance is always preferable to reuse, reuse before remanufacturing, and all of this is always preferable to recycling.

Biological Cycle

The dominant force in this cycle is biology. On the one hand, these products must be designed to return to the system through chemical processes such as composting.

On the other hand, we highlight the potential of the cascade effect, consisting of using a part of the main product to reuse it and create value as part of another product. E.g. cotton from a clothing fabric can be reused again as sofa padding.

5. Future Trends

Recycling must gradually lose weight in the circular cycle, as it does not maintain or increase the value of the products, and although it contributes to achieving the objectives set out by the circular economy, we must not forget the considerable energy consumption that it entails as a final stage.

In the 1990s, the Eco-design concept was born. Its diffusion is rooted in the movement of some sectors of society towards a consumption of products that are more respectful of the environment.

It arose from the need to minimize the potential environmental impacts of the product before they occur, thus changing the traditional way of proceeding in the industry, which was responsible for avoiding or repairing environmental damage once it had already been caused. In this sense, eco-design began to focus on the principle of prevention as opposed to correction.

Eco-design is called to play an essential role, given that promoting eco-design will achieve other crucial objectives such as:

• increase the durability or life cycle of products and services
• improve and reduce the cost of corrective and preventive maintenance, innovating in business models that convert products into services, and in which maintenance takes on essential value while maintaining product performance.
• increase the rates of repair and/or reuse of a product since it is generally less expensive than manufacturing it again