Net gains: producer responsibilities in a digital world

Today’s digital society of ebanking and mobile phones finds consumers more empowered than ever before. Does this reduce businesses’ responsibility for the impact of their products? Not if the sustainable potential of these new technologies is ever going to be recognised, Vidhya Alakeson argues.

In 2000 Kia, the Korean car manufacturer, launched its Think before you drive advertising campaign in the UK. The campaign encouraged drivers not to use their cars for short journeys, only for long distance ones. Kia also gave away a mountain bike with every car sold in a certain range and organised walking buses, a network of parents to walk children to school instead of taking them by car. Kia recognised that improving the social and environmental impacts of its own manufacturing and internal processes was important, but influencing consumers to behave more responsibly could have a greater effect.

In 2002, each person in the EU consumed over £9,000 worth of goods and services and produced 535 kilograms of waste. In the face of consumer ‘stuff lust’, it is becoming clear to businesses and governments alike that sustainable development needs as much emphasis on consumption as it does on production. In the digital society, as we move from physical to digital products and services, sustainable consumption becomes a greater priority, as research conducted for the Digital Europe project reveals.

Researchers at the Wuppertal Institute set out to investigate whether a shift from physical to digital products and services would benefit the environment. They looked at two examples, banking and music. In the case of banking, they compared the environmental impact of paying a bill at a bank branch and paying the same bill online. In the case of music, they compared the environmental impact of buying a Compact Disc in a shop, buying a CD over the internet and downloading 56 minutes worth of music (the average length of a CD) over the internet. In both cases, they found that digital delivery could reduce the impact of the product or service.

But it’s a case of could rather than would. The environmental potential of digital products is to a large extent determined by consumer behaviour.

Firstly, the download speed that a consumer uses affects the time it takes to complete a transaction. For example, downloading 56 minutes of music with a high speed internet connection takes a matter of minutes but it takes four hours over a standard telephone line. The more time spent online, the more energy is consumed and the greater the environmental impact.

Secondly, if a consumer chooses to rematerialise a digital product or service by printing out the content or burning it onto a CD, its environmental impact rises. And finally, the ease of consuming over the internet may simply encourage consumers to buy more, wiping out environmental savings.

In the physical world, the material intensity of many products tends to be influenced most by the production phase. This explains why, historically, getting business engaged with sustainable development has focused on cleaning up production.

Moving to a digital world, there is a marked downward shift in the distribution of environmental impact across the value chain, making consumers as much the guardians of the environmental potential of virtual products as producers (see graph above).

Is business off the hook?

Of course not. Business responsibility is still an essential piece in the sustainability puzzle but it does mean that business has an important role to play in strategies that address sustainable consumption alongside sustainable production.

This isn’t just an issue for technology and media companies. All organisations providing some kind of service that can be accessed online, whether it is a technology company offering software upgrades or a white goods manufacturer offering PDF versions of its manuals, need to adapt their strategies.

Consumer behaviour may be unpredictable at times but the very fact that a company is able to persuade consumers to purchase its products over those of any other company suggests that companies have considerable influence over consumer decision-making. Just as drinks manufacturers tell consumers to drink responsibly and recycle glass bottles and aluminium cans, producers of digital products have opportunities to give consumers the information they need to act responsibly. For example, they could encourage consumers away from rematerializing digital content by building a simple question such as ‘do you really want to print this again?’ into the technology. This would give consumers the opportunity to make a positive environmental choice.

But all too often producers use their marketing muscle to influence consumer attitudes and beliefs against sustainable development goals, whilst their commitments to sustainable development (as far as they go) sit with another part of the company.

For example, when Apple added CD burners to their line of iMacs in 2001, they chose the slogan, ‘Rip, Mix, Burn’ for the marketing campaign. It’s shorthand for the process of collecting the best tracks from several different albums and transferring them on to a CD using a computer. Apple could have used its marketing campaign to encourage consumers to keep virtual products virtual, thereby benefiting

the environment. But the company went the other way, encouraging consumers to rematerialize digital products, and inadvertently promoted consumer behaviour that would reduce the environmental potential of the digital economy.

On its own, innovating new digital products and services to replace physical ones won’t be enough; producers also need to inform and communicate with consumers if we want to realise the sustainability potential of the digital economy. The technology exists to make this communications task easier for companies than ever before. Their challenge is to develop greater consistency between their CSR commitments and their marketing messages. Conflicting messages will only erode trust with consumers.

Editorial Comment

Case Study: Digital Europe

Led by Forum for the Future, the Digital Europe project brought together two other internationally renowned research institutions, the Wuppertal Institute (Germany) and the Fondazione Eni Enrico Mattei (Italy); twelve leading European businesses including AOL, Barclays, EMI, HP and Vodafone; and three European regions – Wales, the Ruhr Valley and Piedmont. The project is funded by the European Community under the Information society technology programme

Project case studies looked at issues as diverse as ebanking, social capital and mobile, handheld computing, and regional investment. A book, Making the Net Work, will be published by Xeris in December.

For further information and to download copies of the free reports, visit: http://www.digital-eu.org

Corporate Citizenship Briefing, issue no: 72 – November, 2003

Vidhya Alakeson is principal policy advisor at Forum for the Future. One of her major roles at the Forum is to head the Innovation and Technology team, a research group looking at technology and sustainable development.