A Trashed Economy
March 16, 2009 at 10:59 am 2 comments
Frank Brandauer
The impact of the economy on business and the EHS profession has shifted our discussion from “how to survive a really bad year” to “how to provide EHS value in a reset worldwide business model”– a question that is likely to define the reality of most EHS managers and professionals for a generation to come.
So what then is this new reset worldwide business model going to look like? One hint can perhaps be seen in an interesting article in the LA Times (1/25/09, “As the Economy Slumps, So Does Trash”). It describes how changing life styles, consumption patterns, construction, recycling, etc., has resulted in landfills seeing a 30% decrease in waste tonnage as well as revenues from associated tipping fees. One of the article’s primary conclusions is that “People aren’t producing as much garbage because they’re not buying as much.”
While this trend demonstrates a direct environmental benefit in terms of the consumption of raw materials, recycling and waste disposal, the more profound message is that people are and will be buying less now and into the foreseeable future. It would appear that we are just starting to see some of other the consequences of a more “economically sustainable” world.
Even as industry uses, makes and sells less & budgets and resources shrink, we know that the majority of EHS risks, liabilities and requirements (both legal and stakeholder) will remain. So how does EHS operate in this new business reality, or is it really to soon to know?
Entry filed under: Emerging Issues, Wall Street. Tags: Consumption, EHS Management, EHS Profession Trends, EHS Trends, Environmental Economics, Reset Business Model, Sustainability, Waste Reduction.
1.
Stephen Evanoff | March 16, 2009 at 1:17 pm
Frank, thanks for highlighting another big picture issue.
Trashology is indeed a good indicator of a less profligate lifestyle emerging, mostly out of necessity rather than choice. I think the answer to the question, “Is this an indicator of a fundamental change, or just a temporary phenomenon,” is “Yes, it’s the beginning of a fundamental change”. My sense is that it’s the beginning of a long-term trend in consumption and a shift in expetations for businesses. In my opinion, one of the main drivers will be the Millenial Generation that is beginning to enter the work force. From my reading and experience with an 18 year old at home, they are sophisticated consumers, who are skeptical of businesses claims, who expect businesses to make substantive environmental protection commitments part of their core values, and who verify these claims, and who make purchasing decisions on this basis.
If I were a consumer products company, I would pay very close attention to this generation. Corporate environmental initiaves that won awards yester-year will get a yawn and “so what” from The Millenials. They will raise the bar for environmental performance expectations.
2.
David Williams | March 16, 2009 at 1:43 pm
One big question that only time will answer is “Will the Millenial Generation sustain this mindset over time or will it slowly fade as they age?” Other large groups of people who were committed to change have lost that collective drive. Lots of people who were committed to living simpler lives, getting closer to nature and promoting a peaceful, harmonious world are focused on paying the mortgage, paying for college educations and trying to survive the latest round of layoffs.
If life were more focused on acquiring terrific experiences rather than acquiring terrific stuff, a tremendous change would happen. Seems like it would be a lot more fun producing experiences than stuff anyway.