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August 29, 2010


Relationship between Business and Consumption Surrounding Environmental Issues

college_awanosan.jpg Copyright JFS

Lecturer: Mikako Awano, CBD Senior Officer, Conservation Division, WWF Japan

Consumption is at the Base of DPSIR Cycle

I'd like to begin with introducing the DPSIR conceptual framework (Driving forces-Pressure-State-Impact-Response) to think about the connection between environmental issues and our everyday life. This framework was coined by the European Environmental Agencies in the 1980s.

Driving Forces in environmental issues simply mean consumer activities. For instance, obviously there were no vegetable gardens and rice paddies before humans appeared on the earth. Humans have been converting forests and wetlands to do agriculture. A much larger scale example is the mining development. In Papua New Guinea, the summits of gold mines around 4,000 meters high have been entirely excavated, which is even visible in satellite images. These make us think that consumption is a strong driving force for the natural environment.

Driving Forces then create "Pressures." The direct impacts on the natural environment, so-called environmental destruction, are a prime example of "Pressures." When a forest is converted into cropland for agriculture, the habitat for wild animals that lived there will be lost. In that case, the Driving Force called agriculture invites the Pressures of habitat loss.

The problem of foreign species invasion is also considered as an example of Pressures. During a transport of goods, insects and plant seeds trapped in a space between packages are sometimes brought into Japan and disseminated. Some species such as American bull frog are introduced to Japan intentionally for aquaculture.

This sort of Pressures leads to specifically the "State" of decreasing number of species. Japanese crested ibis is in danger of extinction not only because of overexploitation but also partly because of the pesticide used in rice paddies. This is also a consequence of our consumption.

I sometimes hear people saying "What is wrong with going extinct? Dinosaurs died out, too." Extinction itself is not an issue. The issue is that the extinction brings "Impacts" of degraded ecosystem services. Ecosystem services are the various benefits provided by the earth to human beings. We have a problem that the ecosystem services including supply service of water and wood, climate regulating service, and cultural service of enjoying forest bathing are now rapidly undermined.

Then what can we do? The answer is "Responses." To solve environmental issues, we need to go back to the story of Driving Forces such as "How can we change consumer behavior?"

Globalized Society Detached from Reality

Current world is so globalized that it is impossible to feel real about the global environmental issues. Edo Period (1603-1868) is often recognized as a recycling-oriented society, but it was possible because of the scale of society in which most of activities happened within close proximity.

Have you ever heard of the phrases, "Circle of Concern" and "Circle of Influence"? For most people, Circle of Concern should be bigger than Circle of Influence. People may think "I wish I could change things this way," but those who we can influence are at most friends and family. It is just a frustrating situation. When it comes to environmental issues, it is reversed. In a society where people are used to eating foods that travelled from the opposite side of the earth, each of us gives more impacts over the global environment than we think.

Furthermore, what is difficult for Japanese is the lack of third sector in a real term in Japan. A university professor gave me a clear explanation. He told me that it was an outcome of an imprinted idea by the new government of the Meiji Restoration through educational system: "It is OK to focus on economical activities and let the government take care of social problems." In Europe and the United States, the civic sector is active along with governments and businesses, but in Japan, it gradually faded out during the past one hundred and several decades.

Another Japanese issue related to this is that a sense of individualism has not yet been established in Japan. I temporary stayed in France and have an impression that French people consciously confront with society in a relationship of rights and obligations. Therefore there is a constant tension between individuals and society. On the contrary, Japan is a society where it has been valued to have no boundary between individuals and society as it is shown in the expression of "Murahachibu (social ostracism from the villagers except for preparing funerals and fire-fighting)." A concept of individuals against society probably would not exist where there is no mental structure of confronting community.

Cost Benefit as a Driving Factor

Then who controls consumption in the Japanese society? Businesses do. Basically businesses create the entire market. For instance, did any consumers say, "Hybrid cars are absolutely good" before the launch of Toyota Motor Company's Prius? Prius was marketed and launched by Toyota itself.

"Environment" is an emerging market for businesses. Prius is now widely discussed due to its recall, but I don't think people who are driving Prius would switch to ordinary gasoline cars. The company succeeded in attracting clients who have strong loyalty. Even though several other companies sell hybrids now, Prius stands out in terms of differentiation.

In addition, businesses must tackle environmental problems to survive. One key to survival is ensuring resources. For example, Coca Cola Co. has been seriously tackling climate change. The change in water circulation due to climate change may result in less rainfall in the area where their plants are located and force them to stop their operation. The company is also seriously working on how to grow sugarcanes, a sweeter ingredient, with less water since it is a very thirsty crop.

Another key to survival is risk management. You may recall that the launch of Sony's Play Station was suddenly banned in Europe in 2001. Chemical substance incorporated into the product was forbidden under European regulation. The company overlooked the substance because there was no equivalent regulation in Japan at that time. The incident must have given the company a significant damage even though the company somehow tried to put itself back together.

In short, regulatory compliance alone is not sufficient. Regulation does not cover the future potentials in the first place. Since it takes about two years to formulate regulation, we won't be able to tackle environmental problems if we make regulation after a problem occurs and the businesses start to comply.

Now let's think from the consumers' perspective. For consumers, cost benefit is critical. For example, consumers show interest in Eco-Point Program for green home appliances not because they are good for the environment but because they are good buys. If a 500ml bottle of mineral water were 300 yen (about US$3.37), would anyone buy it? I don't think so. The benefit is not adequate for 300 yen. I think even those who say "I don't mind paying extra money for environmentally friendly products" in a questionnaire probably go for a lower price when they actually choose a product.

Benefit is, however, not only about money. For instance, brand products sell well in spite of their high prices, because the status of brand is considered to be a benefit. It is the same with Prius. At a high gasoline price nowadays, monetary benefit is substantial, but those who bought it long before must have gained status in just driving Prius.

The key is whether people can consider environmentally friendly factors as benefits or not when we think about environmental problems and consumer behaviors from both monetary and non-monetary perspectives. How much position do these factors hold in our mental satisfaction? While we say "The environment is important" we need to question ourselves about how environmentally conscious we are in the situation of consumption, Driving Forces.

Communication between Businesses and Consumers

Japanese consumers have strong trust in businesses in a positive and negative way. In Europe, businesses, which are not trusted by consumers very much, eager to work with non-governmental organizations (NGOs). In Japan, however, consumers very favorably respond to corporate marketing. It is not necessarily bad. Businesses may have that much potential. So if businesses and consumers communicate each other more seriously, things may change for the better.

Recently I often hear that many businesses are wondering how to tackle biodiversity. Certainly the biodiversity does not have an easy-to-understand indicator like carbon dioxide (CO2) reduction in global warming countermeasures. Environmental problems have a wide range of issues with new problems including biodiversity emerging one after another, which makes communication a bit difficult. Since we can probably never say "We accomplished so and so" in environmental efforts, we can only show interim progress like "This is how we are tackling this problem now and this is how much we progressed so far." In other words, we need to communicate about the process not the outcome.

If we emphasize process, it gives room for consumer involvement. For example, if our opinion is incorporated in a product development, people will somewhat feel attachment to the product. It is the same thing with the communication about environmental problems. If consumers feel that a company listened to their opinions, they will have a friendly feeling toward the company. The company can gain clients with high-loyalty.

Here, however, consumers must not take everything businesses say on faith. What do you associate the words "plant derived oil"? If a commercial of detergent says "We switched to more eco-friendly plant-derived oil," don't you think it sounds better for the environment compared with petroleum-derived oil?

It had become an issue several years ago. A detergent manufacturer promoted a detergent saying "It is environmentally friendly because palm oil is used as an ingredient." But in countries of origin such as Malaysia, very large-scale destruction of tropical forests had been occurring because of that. Some NGOs criticized the detergent company for giving a false impression to consumers. Thus it certainly involves risk when we take what businesses say on faith. Each consumer must have good judgment. On that premise, if businesses and consumers communicate more, the relationship between business and consumption will change toward more environmentally friendly direction.


Mikako Awano has been a staff at WWF Japan since 1990. She was involved with the licensing project of WWF's panda logo and the fund-raising for their activities including charity events and donation campaigns as well as lifestyle related projects such as carbon dioxide emissions reduction campaign and green electricity promotion events. Until recently she was mainly in charge of the corporate partnerships project. For the tenth meeting of the Conference of the Parties to the Convention on Biological Diversity (COP 10) to be held in Nagoya in 2010, she was appointed to the current position in July 2009.