Infine’s founder Tiina Saukko explores both the cornerstones and pitfalls of corporate responsibility in her blog series. In this post, she breaks down the key parameters of a responsible product and how its responsibility can be defined – potentially even automatically in the future.
Evaluating Product Responsibility
A product’s responsibility must be evaluated in the context of the market situation and production alternatives. If renewable energy, recycled materials, and biobased packaging are available, and the product can be produced with good quality, reasonable cost, and near the place of use, then a product produced differently cannot be considered responsible. This is, however, rarely the case, making responsibility a complex calculation involving various expertise. A few general guidelines apply:
Climate
Due to the climate crisis, nothing carbon-based should be burned to make a product, especially not fossil fuels extracted from underground carbon reserves. Also, carbon that could be sequestered instead of burned is significant, particularly in the short term, as we aim to avoid triggering climate-worsening mechanisms.
Climate responsibility is mostly examined through the energy used and measured using carbon dioxide metrics. Carbon offsetting does not reduce emissions directly, and its effectiveness is mainly relevant for developing the carbon market and mindset. As a marketing tool, it helps highlight products and services where all other means of reducing carbon emissions have already been used.
Environment
Biodiversity loss is the root cause of environmental irresponsibility. We are living through the greatest mass extinction in human history, progressing at 100 times the normal rate. To measure habitat preservation, various environmental footprint metrics are used to define environmental burden from different perspectives. There are over ten of these metrics, and the one most suitable to describe the product’s impact is selected.
A simple general rule is that all unnecessary plantations, monoculture forests, open-pit mines, and similar ecosystem-destroying activities should be avoided. For example, coffee produced by smallholder farmers using mixed farming allows them to compost coffee cherries, unlike large plantations that often cause environmental issues. Smallholder farmers view coffee as a cash crop that supports purchasing essentials like medicine and books. The Fair Trade guaranteed pricing model aims to correct pricing distortions and provide a living wage.
Social Responsibility
The previous coffee example also highlights aspects of social responsibility. Social sustainability also contributes to biodiversity. For example, gender equality directly affects population growth, which correlates with women’s status. Equal participation by women in the economy is thus one key to planetary resilience. The textile industry bears much of this challenge as 70% of its value chain workers are women.
A key indicator of social responsibility, albeit perhaps foreign to many Finns, is worker organization. In Finland, trade unions are often seen as institutions with mixed opinions, but in many countries, they are exceptions. Their absence often results in conditions resembling forced labor.
Workers’ rights, including preventing child exploitation, are also part of social responsibility. It’s worth noting that children may assist their parents, for instance, with farm work, but exploitation involves work harmful to a child’s development and education. Social responsibility encompasses all aspects of management, equality, non-discrimination, and fulfilling employer responsibilities. Social responsibility violations are so rare in Finland that domestic production stands out internationally as exemplary.
Ethical Business Practices
I believe every Finnish business leader knows what’s right. The main issue today is that leaders lack enough sustainability information to support business decisions. Consequently, companies tend to look for isolated “sustainability acts,” often leading to suboptimal solutions.
Business can scale rapidly and have a significant impact, so if decision-makers incorporate sustainability parameters into their decision-making, change can happen fast. It also seems consumers are ready to pay for this change. For instance, IBM’s consumer survey found that half of consumers would pay an average 59% premium for sustainability. Of course, there is an element of posturing here, but historically, changing mindsets precedes changing actions.
We also lack a widely accepted standard for a responsible product. As ambitious as it may sound, Infine is working on creating one. The EU taxonomy has already advanced climate considerations, and standards for environmental and social responsibility will soon follow, along with legislation.
Once consumer pressure shifts from the survey stage to actual purchasing decisions, managing sustainability will become part of everyday business for all leaders. Sustainability management is just like any other form of management: directing contracts, guidelines, plans, and culture to ensure sustainability parameters are accounted for.
Tiina Saukko
The author is the founder and CEO of Infine, with over 20 years of experience in product responsibility, responsible marketing, and corporate responsibility.
Infine is currently developing an automated sustainability assessment for products. Soon, we will be able to generate sustainability information from current product data using AI. We are currently in the pre-seed funding round, so if you’re interested in investing in Infine, contact Tiina: tiina@infine.fi, Tel: +358 40 509 59 09.
