Businesses are paying more attention than ever to their sustainability performance and not just the bottom line. This is a good thing, but companies still operate in a competitive landscape, and competition undermines our collective capacity to have an impact and make a difference: If I have a strong social purpose and my competitor does too, in the current system, one of us “wins” by realizing that purpose more than the other, rather than achieving the best performance as a group. It’s the classic “prisoner’s dilemma” challenge.
Sector-wide initiatives – companies and organizations across a sector working together – are one way to address this, because a co-operative approach can help address sustainability issues common to them all, while also providing mutual business benefits. Strategic collaborations are one of the three core principles of corporate social innovation, which is about ‘fuelling breakthrough changes in how businesses operate so that they can achieve social and environmental value creation alongside financial profit.’
What Successful Collaboration Looks Like: the Sustainable Apparel Coalition
Sector-wide collaborations address both general issues of sustainable fashion, and specific issues like a single fibre type e.g. cotton. The Sustainable Apparel Coalition (SAC) draws members from every level of the global apparel supply chain. They aim to transform the apparel, footwear and textiles industry through ‘pioneering assessment tools, system-wide collaboration and supply-chain transparency’. Their vision is impressive: the SAC foresees ‘an apparel, footwear, and home textiles industry that produces no unnecessary environmental harm and has a positive impact on the people and communities associated with its activities’. That’s quite a claim for an industry that faces complex challenges like outsourced supply chains and deforestation for leather, not to mention terrible tragedies like the Rana Plaza collapse in Bangladesh in 2013, which claimed the lives of more than 1,100 people.
Inspired by Patagonia’s purpose to use business as a force for environmental good, Walmart and Patagonia inspired other big clothing companies to join the SAC in 2009. Target, Gap, Levi’s, Li & Fung, Nike, H&M, Marks & Spencer were all at the first meeting in 2010 because they recognized the potential of aligning their forces.
The founding companies shared a frustration that they had all created their own codes of conduct and inspection regimes for supplier factories. This had led to ‘audit fatigue’ for suppliers who had to meet several slightly different requirements for their various customers. SAC members were keen to avoid repeating this mistake, so the focus of the SAC has been creating the Higg Index – named after the elusive Higgs boson particle (although somehow the ‘s’ got lost in translation).
The Higg Index is a suite of standardized assessment tools to measure environmental, social and labour impacts at every stage of the lifecycle and value chain. It is at heart a tool to help companies score and benchmark themselves against each other, with the shared ambition to improve, so raising the floor across the whole industry. The shared standard is successful in overcoming barriers to co-operation for a few reasons:
- Each company acknowledged that no one actor in the system can address all the sustainability challenges of the sector.
- A shared standard changes competition of the ‘I win, you lose’ kind into competition that encourages the pursuit of shared goals.
- The companies are also sharing information, and transparency breeds deeper trust, which is essential for successful collaborations.
- The Higg Index started small and remained agile, which some of the members of the early team who worked on it cite as a key success factor. It then drew in members from across the whole value chain: retailers, manufacturers, brands and so on.
Post-competitive capitalism might look like entrepreneurs, activists, NGO leaders, government officials, and association leaders all respecting one another’s roles in fostering advancement. It all sounds a bit utopian but it is happening already. The SAC talks openly about ‘shift the existing industry paradigms’ – a system-level change, not tinkering around the edges.
What are Post-competitive Brands?
What do these considerations mean for a company’s positioning? I may define a distinctive market position vis-a-vis ‘competitors,’ but defining my purpose in a broader, systemic landscape (or ‘sustainability context’) gives me a new frame for a positioning strategy—companies can and should be thinking ‘does my current purpose statement capture this effort and tell this story’? It may well not. But surely the opportunity is there to really strike a chord with people.
And here we go back to the first inspirations of the SAC. Patagonia’s mission statement is to ‘build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis’. This is what led to their conversations with Walmart, and from there to the formation of the SAC.
Patagonia was famously established by a man who loved climbing and surfing and wanted to make great sports equipment with minimal impact. Social purpose is hard-baked into the company. However this is by no means a pre-requisite for defining such a bold mission for your company.
The post-competitive brand position showcases not only the value proposition and ‘sustainability cred’ for your company, but also shows how you are a “team player” in your sector and industry – the kind of corporate entity that earns the respect of their peers and customers.
Big ideas. Bold statements. Considered collaborations. These are some of the signposts we need to see more of in the coming years if we are to negotiate the environmental and social issues that we collectively face. And part of the solution will be companies that are wiling to be brave, to revisit their mission as they change, and see past the zero-sum competitiveness, fear, and scarcity that underlies the old view of business and its role in society.
Adam Garfunkel is managing director of Junxion’s UK operations. He tweets @adamgarfunkel1 about corporate responsibility, sustainability and inspiring social change.