Group 7_A | SDG 12: Responsible Consumption and Production
Ensuring sustainable consumption and production patterns
Authored by: Aparajita Rai BJ21013 | Deepak Sharma BJ21018 | Jishnu Purkayastha BJ21026 | Nikhil Gupta BJ21033 | Pranav Singla BJ21040 | Utkarsh Mani Tripathi BJ21059 | Zach Tom BJ21061
“The world has enough for everyone’s need, but not enough for everyone’s greed.”
- Mahatma Gandhi
Introduction to the SDG
The world market thrives on production and the demand for consumptions is ever growing. But production of any good requires raw materials and other assets and facilities to process the final product. Generally, such raw materials come from natural resources and require labour. However, with production, waste is also produced. Also, a significant portion of the produced goods goes to waste due to lower consumption or due to the end of their usability cycle.
Every year about one-third of all the food produced goes to waste and ends up rotting in bins, landfills, or streets. A similar problem is with electricity. We keep bulbs on or don’t use the energy efficient variants like LEDs. In fact, these energy efficient bulbs are cheaper operationally.
Certain operation practices like Six Sigma are designed to reduce waste production and increase efficiency. Though, the main aim may be to boost profits of firm, the waste and discarded products are also minimised via these practises.
Sustainable consumption and production – It is the philosophy of doing more and better with limited resources and includes the methods to implement them. Such consumption and production is responsible. These responsible aspects come from the fact that the goal also looks at other environmental problems like resource depletion and environment degradation and contributes in achieving lower carbon footprint, leading to a green economy.
The Relevance of the SDG in India’s context
As mentioned before, this SDG is related to sustainable consumption & production, and hence it is inextricably related to the following topics:- 1) Chemical and Waste Management, 2) Sustainable Production & Consumption, and 3) Sustainable Tourism.
1. Chemical and Waste Management:
In 2018, India accounted for around 12% of the global solid waste generated, only behind China, and it generated over 3,230 thousand metric tons of e-waste in 2019, only behind China and USA. This amounts to around 62 million tons of waste produced every year, of which approximately 43 million tons are collected (70% of total). The waste production is estimated to increase to 110 million tons in 2021 [1]. This rapid increase of waste should be a massive concern for India and is a primary reason why India had filled 1684 landfills in 2019 [2].
2. Sustainable Production:
It is not an overstatement to say that India is a global producer, not only catering to the needs of 1.3 billion people but exporting to over 190 countries. Hence, adopting sustainable means of production by inculcating green chemistry and circular economy principles is of top priority. India’s plastic consumption was 18,450 kilotons in 2018, and it is scheduled to hit more than 20,000 kilotons this year, which is a threefold decrease compared to 2010 [3]. This rapid increase in plastic consumption is also a significant cause of concern. India also consumes 31.98 exajoules of energy, of which only 1.43 exajoules or 4.4% comprises renewable energy [4], which is much lesser than the USA (7%) and China (5.37%) [5]. Thus much can be done in terms of sustainable manufacturing and consumption in the Indian context.
3. Sustainable Tourism
In 2019, 17.91 million foreign tourists arrived in India, representing 1.22% of all foreign tourists’ arrivals globally, and is ranked 24th in the world [6]. Tourism also brings in six bn USD in foreign exchange, and inbound tourism expenditure directly contributes to 1.1% of India’s GDP [7]. The total contribution of travel & tourism to India’s GDP was 247.37bn USD [8]. Because of favorable policy changes to trigger tourism growth and its existing share in the nation’s GDP, the country must develop sustainable tourism by promoting ecotourism and non-consumptive tourism.
Thus, this SDG is extremely crucial to the future of the country, in terms of sustainable economic growth and development.
Business Implications and Responses
It takes two to tango. The essence of SDG 12 lies in the credo that sustainable production or sustainable consumption can't be the only solution towards a sustainable marketplace. As per the ongoing trends, consumer demand will outpace the production and distribution progress made by the industries. Thus, there needs to be concurrent progress in both domains, and one can't be seen in isolation from the other.
In this seemingly chicken and egg problem, let's begin by analyzing the implications of SDG 12 for industries and their responses.
Industries follow a two-step method to achieve this target. The first step begins by identifying the "Centre of percussion". This translates into identifying the location in the value chain where efforts will maximise results. The second step is to embrace technology and come up with pragmatic and out of the box ideas to improve the overall value chain.
A sustainable lifestyle can either be self-induced or inspired through subtle nudging from the consumer side. The ensuing paragraphs elucidate these two aspects by citing steps taken by companies to achieve the same.
The first example is that of TATA. One of the Tata group's crown jewels, Jaguar has successfully implemented project REALCAR ((Recycled Aluminium Car) to achieve a closed-loop value chain by partnering with one of their key suppliers Novelis. This helped them reclaim 50,000 tonnes of aluminium which is equivalent to the weight of 200,000 XE body shells annually.
To educate the consumers towards sustainable consumption, Tata Power initiated Tata Power Club Enerji with the sole objective to sensitize students about the energy crisis and the judicious use of inadequate natural resources. (Source)
These are merely two great examples among the plethora of other projects Tata has undertaken towards SDG 12, including an integrated approach to water management at Mithapur, the Hathikuli plantation, re-utilising waste concrete water and many others.
Taking the second example of Reliance Industries Limited, the company which after their strategic pivot to digital, has been working hard at mitigating or at least managing their environmental impact. Some of the major initiatives that the company has taken to are:
1. Commissioning of Continuous Emission Monitoring Systems (CEMS):
To monitor the emissions of total particulate matter (TPM), Sulphur oxides, Nitrogen oxides, and other volatile organic compounds, all the petrochemical and refinery sites commissioned CEMS, which has led to significant reduction in the air emissions from these sites YoY. The company also claims to not use Ozone depleting substances in their production processes.
2. Reducing the material intensity by using 100% recycled products:
It is a universally known fact that PET bottles on account of being non-biodegradable lead to degradation of the environment after disposal. RIL produces a polyester staple staple fibre (Recron Green Gold) from 100% recycled PET bottles and 90% recycled water. This has led to the recycling of over 60kT of polyester waste and more than 2 billion post-consumer PET bottles annually.
3. Extended Producer Responsibility:
The company has been rooting for proper disbursal of e-waste via an exchange scheme that is operational across all the 2000+ retail stores under their umbrella. Under the program, the customers are encouraged to bring their used and outdated electronic devices and in exchange get a discount on a new device from the store. One of the key initiatives under this is also the Jiophone, which post usage, the customers can return for a full refund. The company then takes care of the responsible disposal of the e-waste. This is done in collaboration with Producer Responsibility Organization (PRO).
To quote another example, since its days in glory, Amazon has been facing severe criticism for its packaging. It has been taking incremental steps in this direction by gradually eliminating plastic while ensuring the safety of delivery products. In this line, Amazon has said, "German logistics centre will replace all single-use plastic packages with paper-based bags or cardboard boxes by the end of the year."
These efforts are concomitant with Amazon's increasing transparency and stakeholder responsiveness to delineate the eco-labelling and certification on the page prow to raise consumer awareness and inspire sustainable consumption practices. (Source)
The past couple of years have seen a lot of action in terms of the corporate world turning to sustainability, ESG and all the jazz that goes along with it. But how much of this is due to their own volition and how much of it is being driven by consumer sentiment and market forces? It seems like the entire world is increasingly moving towards sustainable development and the pandemic has only accentuated the process, the consumer of today is conscious of the choices they make and demand responsible action from the companies they engage with. It is no doubt that the billions of dollars being pumped by businesses to meet these sustainability goals are hurting their bottom line in the short term, but sustainability is the new world order and businesses understand that for there to be a bottom line, they need to still be in business.
Analysis – A Progress Report & the Stakeholders involved
It has been conveyed at several instances by the learned scientists worldwide that humanity is heading towards the three planetary crises of climate, biodiversity and pollution, and how it all is linked to unsustainable production and consumption patterns observed today.
The 12th Sustainability Development Goal talks exactly about this. Summarized, the goal talks about doing more and better with less. It talks about decoupling economic growth from environmental degradation, increasing resource efficiency, and promoting sustainable lifestyles, in order to ensure future generations have enough to sustain themselves!
In a business context, below are the key Stakeholders of any goods manufacturing Company:
Each of these stakeholders have differential causal impacts and responsibilities towards the goal. It is good news that key stakeholders are increasingly becoming conscious of sustainability and their responsibility towards it, and have started contributing, but much is yet to be done.
Companies & Producers: Procurement of Green raw materials and production of Eco-friendly and sustainable products, Adopting protocols for responsible Emission and Waste Management and implementing efficient Inventory Management systems and Supply chains is increasingly being adopted. Ola is coming up with a revolutionary line-up of Ola Electric Scooter and is spreading awareness towards responsible consumption of Fossil Fuels in tradition vehicles – This is a great sign!
Also, the impact of rating systems on the Internet and recommendation engines related to social networks obliges producers to develop arguments other than price alone. This has brought significant change in the mindset of the producers – away from merely profit margins and more towards sustainable production.
Consumers & Customers: Customers are increasingly making informed choices today by using several non-financial criteria during their purchasing process. Organic & Green Staples are being preferred in Retails Stores and Supermarts, and so are Electric Vehicles.
However, data reveals that about 14 per cent of the world’s food is lost along the supply chain prior to the retail level. Around the world, 1 million plastic drinking bottles are purchased every minute, and 5 trillion single-use plastic bags are thrown away each year. The global material footprint increased by 70 per cent between 2000 and 2017 [9]. Evident from these figures, responsible consumption has miles to cover from the Consumers perspective.
Where do we stand today on the SDG-12?
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· The Rapid & Unsustainable Growth Rate of Natural Resource consumption
Globally, domestic material consumption per capita, i.e., the total amount of materials directly used by an economy to meet its consumption needs, rose by more than 40 per cent from 2000 to 2017 – from 8.7 to 12.2 metric tons [9]. Over the last two decades, all regions except Europe and Northern America, as well as Australia and New Zealand, have seen a considerable rise. Industrialization, which includes the outsourcing of material-intensive production from developed nations, is largely to blame for rising domestic material consumption in developing regions.
Natural resource use and benefits, as well as environmental consequences, are distributed unevenly between countries and areas. Circular economy techniques that reduce or eliminate waste and pollution, keep products and resources in use, and regenerate natural systems are required for a road to sustainable consumption and production.
Following are the observed trends in the Domestic material consumption per capita (metric tons per capita) between 2000 & 2017 for various regions of the world.
· The Uneven Progress in promoting Sustainable Production and Consumption
Shifting to more sustainable consumption and production patterns is essential for solving global crises such as climate change, biodiversity loss, and pollution, as well as attaining long-term development. The development of national instruments and initiatives targeted at assisting this transformation is on the rise. Under the 10-Year Framework of Programmes on Sustainable Consumption and Production, 83 nations and the European Union submitted a total of 700 policies and implementation activities by 2020. However, in Sub-Saharan Africa, only 50 policies and implementation initiatives were documented, compared to 374 in Europe and Northern America.
As of December 2020, 40 countries had reported on sustainable public procurement policies or action plans (or equivalent legal dispositions) that encourage the procurement of environmentally sound, energy-efficient products while also encouraging more socially responsible purchasing practises and sustainable supply chains. The following figure illustrates the same.
Countries reporting on national action plans or policies on sustainable consumption and production, 2017–2019 reporting cycle and 2020 reporting cycle
· Proliferating E-Waste and its Improper Disposal Continues!
In 2019, the global production of electronic and electrical equipment waste (e-waste) reached 53.6 million metric tonnes, up more than 20% from 2014. In 2019, each person generated around 7.3 kilos of e-waste, with just 1.7 kilogrammes recognised as being treated in an environmentally sustainable manner. Poisonous chemicals are released into the land and water as a result of improper e-waste disposal, endangering both the environment and human health. Rare and valuable raw commodities such as gold, platinum, cobalt, and rare earth elements are lost as a result. E-waste could hold up to 7% of the world's gold at any given time.
E-waste creation is anticipated to increase by 0.16 kilograms per capita every year until 2030, when it will reach 9.0 kilos per capita (or 74.4 million metric tonnes in total). In the last decade, however, the realized annual growth rate of e-waste recycling was only 0.05 kilos per capita. To achieve the recycling of all e-waste by 2030, it will need to be at least ten times higher.
E-waste generated and recycled, 2010–2019, projected e-waste generated and required growth in recycling, 2020–2030 (kilograms per capita)
· Progress to eliminate fossil fuel subsidies remains uneven – A threat to achievement of the Paris Agreement and the 2030 Agenda
Government subsidies for fossil fuels, such as coal, crude oil, and natural gas, encourage the production and consumption of these fuels over the development and use of clean and renewable energy. They contribute to climate change and air pollution, as well as having a negative influence on public health. Due to decreased fuel costs, fossil fuel subsidies fell to $432 billion in 2019, interrupting a two-year increasing trend that began in 2017 ($450 billion) and ended in 2018 ($548 billion). Due to dwindling demand and the oil price shock, subsidies were predicted to drop dramatically in 2020. However, due to a parallel decrease in global GDP in 2020, the reduction in fossil fuel subsidies (measured as a percentage of GDP) is likely to be smaller than predicted.
Many governments have taken advantage of decreasing fuel costs in the previous two years to urge for reforms and the phase-out of subsidies. However, there is still a lot of room for improvement. With fuel prices rising considerably in 2021, there is also a risk of regressing and failing to reach the 2030 Agenda for Sustainable Development and the Paris Agreement's goals.
Fossil fuel subsidies as a proportion of GDP, 2015 and 2019 (percentage)
Suggested Way Ahead
While the achievement of the Paris Agreement and the 2030 Agenda seems to be in threat, it certainly does not mean conscious efforts are not being made with respect to the SDG-12.
The vast untapped potential for Renewable Energy is the way forward to achieve SDG-12. Over the last decade, new renewable power capacity installations have outpaced non-renewable electricity capacity installations globally, regularly exceeding non-renewable electricity capacity installations since 2012. Most of the new renewable electricity capacity was installed in developing countries for the first time in 2018. The large rise in capacity in these countries can be attributed mostly to the uptake of new solar and wind power, which climbed by 72 percent and 22 percent, respectively, between 2010 and 2019. Despite COVID-19, renewable energy capacity grew at an even faster rate in 2020, according to the most recent data.
Renewable energy capacity per capita in developing nations was 219 watts in 2019. Renewable energy capacity per capita in industrialized countries was 880 watts, four times more than in developing countries, indicating that there is still opportunity for expansion.
Following figure depicts the trend of growth of different forms of Renewable Energy Capacities in the developing countries between 2010 and 2019.
Installed renewable energy-generating capacity in developing countries, by technology, between 2010 and 2019 (watts per capita)
As the data suggests, there is still an immense untapped potential for adopting Renewable Energy sources, and the growth in these adoption rates certainly gives hope.
We conclude that while we are on the right track on the 12th SDG and are getting numerous positive figures backing the conscious efforts being made by organizations worldwide in order to bring consumption and production levels in the sustainable ranges, the future demands more efforts and awareness towards meeting the goals we set in the past, in time.
References
[1] https://www.statista.com.xlrij.remotexs.in/topics/5586/waste-management-india/#dossierKeyfigures
[2] https://www.statista.com.xlrij.remotexs.in/statistics/1168458/india-number-of-landfills-by-state/
[5] https://www.statista.com.xlrij.remotexs.in/topics/6902/plastic-industry-in-india/
[7] https://www.statista.com.xlrij.remotexs.in/topics/2076/travel-and-tourism-industry-in-india/
[8] https://www.statista.com.xlrij.remotexs.in/topics/5734/international-tourism-in-india/
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