Blog Post 9

Steve Howard: The Man Who is More Powerful Than a Wind Farm

This week I presented my TED talk. Steve Howard, who is the CSO (Chief Sustainability Officer) at IKEA and a co-founder and CEO The Climate Group, gave the talk. His goal is to make sustainable products available for not only large corporations but for the masses. He started off his talk by naming 3 numbers, 3, 6 and 12.

http://blog.tradegecko.com/ikeas-inventory-management-strategy-ikea/

3. Represents the 3 BILLION people that will be rising out of poverty into the global middle class by 2030. With the 2 billion people already in this middle class, that makes the middle class of 2030 5 billion people. This is an issue because today we are faced with resource scarcity.

6. Represents 6% centigrade. That is the percentage we are heading towards in terms of global warming. The weird weather we are experiencing lately is due to changes of 1% warming. Therefore, a 6% change would drastically change our environment.

12. Represents the 12 world cities that in the beginning of the last century had 1 million or more people living in the city. Today, more than 500 world cities have populations greater than 1 million.

How does businesses respond to these powerful numbers?

       

                Howard explains how companies have to stop seeing sustainability as something nice SOME companies do, and make it a priority in their future business strategies.

This can become a reality if businesses stop viewing sustainability as a “nice-to-do” and more as a “must-have.” By going all in with sustainability in businesses, they are  taking full responsibility for the impacts of the supply chain.

                  Howard has gone all in with sustainability with IKEA. He has made sure that the entire supply chain of IKEA is sustainable by following a Code of Conduct they call, “IWay”. This code of conduct protects human rights and the total value chain promotes a better quality of life by specifying environmental and social requirements for sourcing and distributing. Howard goes on to say how businesspeople need clarity because when they have a clear goal they can get the job done and get it done right. Therefore businesses should make their businesses 100% sustainable, so there is no way around it. They are all in.

http://www.theclimategroup.org/what-we-do/news-and-blogs
/ikea-group-unveils-new-sustainability-strategy/

            Howard explains the importance of making day-to-day operations sustainable. He states how we will always have sun shining and wind blowing. Why not use this natural FREE resource to our advantage more often? Companies should invest in wind farms and solar panels for electricity. A costly endeavor, yes but one that is worth the investment. In 7 to 8 years solar panels pay for themselves. That means for businesses that they are receiving free electricity, a cost they do not need to pay for anymore. What does that means for the consumer? This means that the corporations will be able to lower their cost of production and therefore lower the cost of their products. This makes their sustainable products less expensive and consumers demand affordability in their products.

            This will cause a domino effect, the companies who go all in in terms of sustainability will gain more and more of the market share in their given industry. Eventually driving out less sustainable companies or forcing other competitors to also join the movement towards complete sustainability. For instance, Howard explained how raw materials such as cotton is a very dirty material because of pesticides and uses lots of water. By cutting the amount of water used and using fewer pesticides, they are able to lower the costs of farming. By lowering the production costs of farming they are able to make more of a profit. Farmers are rising out of poverty and are a part of the 3 billion people projected to enter the global middle class by 2030.

            There is no reason to wait, Howard claims that everyone should follow IKEA’s example and lead the change. Make sustainability a must do.

https://www.ted.com/talks/steve_howard_let_s_go_all_in_on_selling_sustainability#t-5520