Sustainable Market Innovation Hub
“Markets have developed into an integral part of the sustainability problem, but recognizing that markets are dynamic also means that we can change their direction so they become part of the sustainability solution.”
Markets are dynamic systems that are shaped over time through processes of human development. As such they are connected to other social and natural systems, like ecosystems, social communities, and the human body. In a market system, the wants and needs of end-users are central. These wants and needs may be at odds with the sustainability of the systems that the market system is connected to. Most people are attracted by things that are not good for the systems around them, nor for themselves: an affluent presence of fat, sweet and salty foods, including (animal-based) meat and dairy, in large quantities at discount prices. Hence, as direct or indirect consequences of decisions made by consumers, companies targeting consumers, suppliers, and competitors, natural resources may become depleted, farmer incomes may drop below the poverty line, human health may decrease, animals may suffer, and biodiversity may deteriorate.
Ironically, the companies that provide consumers with these unsustainable products are successful in the market because they understand what their buyers prefer. As such, some of the most successful companies found themselves later to be some of the most unsustainable ones. Their market success allowed them to become or remain powerful. They may have used their power to encourage unsustainable use of natural and human resources in their supply chains, provide incentives for unsustainable use, ground such practices in agreements or institutions supporting their way of working. Rivalry between competing companies may have further stimulated unsustainable use of resources in the chain and the creation of buyer markets with unsustainable habits, leading to systems in which all market players are trapped in unsustainable patterns based on decisions made in a past when no one did not know or did not want to know the long-term negative consequences for sustainability.
However, markets are dynamic systems, the events can therefore also turn for the good. Companies can be change makers in the behaviours of their buyers, sourcing strategies of their suppliers and in rules of competition in the market. They exercise their influence directly and through a network of stakeholders influencing the key market actors. Sustainable market innovation processes can remove lock-ins, establish among others sustainable practices, provide incentives in market systems for sustainable behaviours and healthy eating. As such, companies are still offering what customers want, but recognize that customers also care for a sustainable and healthy future.