Building Sustainable Value Chains From Hemp and Flowers

(Illustration by iStock/Sirirak)

Industrial activities are one of the main causes of the depletion of natural resources. Earth Overshoot Day marks the day when the planet consumes more natural resources than the biosphere can regenerate.

In 2023, this occurred on August 2.

The planet is in the red: Despite industry-led initiatives to use natural resources more prudently—from the use of sustainable labels to improve resource traceability to encouragements for companies to rely on more sustainable natural resources, like the FSC certification for the forestry industry—depletion continues unabated. More than one hectare of tropical forest is destroyed or severely degraded every second. In the OECD countries, less than half of fish stocks are in good condition. And with the increasing use of electric vehicles and renewable energy, known primary metal supplies will be depleted in about 50 years. Examples abound.

Why? One part of the problem is structural: Because industry value chains are both fragmented and globalized, even organizations that operate on a global scale find it difficult to effect change in conservation, at the industry level. Given the increasing complexity of global value chains, monitoring the sustainable use of resources across all of an industry’s stakeholders is virtually impossible.

For example, Patagonia is one of the world's leaders in promoting sustainability in the apparel industry, but it has limited impact on natural resource conservation. Because it only directly operates its own offices, distribution centers, and stores, Patagonia can only rely on due diligence activities at the factories, farms, and mills that it works with around the world. It cannot make decisions on how they operate, but can only suggest sustainable improvements (and if unsatisfied, terminate its working agreements to search for better alternatives if they exist). But while Patagonia can, for example, participate in programs to improve the traceability of goose or duck feathers, the use of responsible wool, and the use of FSC-certified raw materials, making major changes in the use of natural resources would require working to find alternatives to polluting materials or shift to more sustainable processes with each industrial partner, each located at different stages of the value chain. The problem is one of scale: Despite Patagonia’s commitment to conserving natural resources, the fragmented and globalized nature of the apparel value chain makes it challenging for Patagonia to influence other players.

A second part of the problem is that consumption is driven by unsustainable desires. As long as consumers in the northern hemisphere feel the need to give roses for Valentine's Day, flowers will be imported from countries like Colombia or Kenya, where temperatures allow flowers to grow in February. Because of heavy use of chemical pesticides and fertilizers, these consumption habits have dramatic consequences for local natural resources in the countries, that economists have called “pollution havens” (to emphasize the deliberate choice of companies to locate to the countries with the lowest environmental standards). Other industries have similar consequences for the conservation of natural resources. For example, the fast fashion industry discards the equivalent of a garbage truck full of clothes every second by burning or burying them in landfills.

Industries locked into this overconsumption path will continue to provide consumers with the (unsustainable) goods they are willing to consume. The problem is not corporate desire or values: Even Patagonia, for example, which makes tremendous efforts to conserve natural resources throughout its production process, continues to offer new clothing lines each season to satisfy consumers who crave for renewal. Promoting the purchase of new clothes instead of keeping the old ones increases our overall consumption of clothes. According to the UN Alliance for Sustainable Fashion, we now consume 60 percent more clothing than we did 15 years ago.

To overcome these barriers to natural resource conservation, it is first necessary to rely more on renewable resources in industrial processes. The problem is that so far, industries tend to rely on exhaustible natural resources as the greatest source of competitive advantage in order to capture the greatest possible value. They need to find a way to capture value from renewable (or less threatened) natural resources to limit the extraction of exhaustible natural resources and combating natural resource depletion.

For example, to combat overfishing, Poiscaille, a company founded less than a decade ago and operating on the French market, decided to promote the catching of “forgotten” fish such as labrus or tacaud among its network of 250 fishers. This diversification reduces the pressure on traditional fish stocks such as salmon or tuna, with the aim of replenishing them. Similarly, Virgocoop is a French cooperative that promotes the sustainable use of hemp fiber in various industries, including clothing: Switching from cotton to hemp saves five times more water, preserves the soil because hemp does not require pesticides due to the plant's resistance to diseases and parasites, and avoids polluting transportation because hemp can be produced in Europe (which is not the case with cotton).

However, while these shifts in production may conserve natural resources, consumers may find “forgotten” fish less tasty and hemp coarser than traditional cotton. Meeting customer needs requires changing the value proposition models of industries to adapt to the value of renewable (or less threatened) natural resources, as perceived by customers. Put simply: Companies must find ways to make alternatives attractive to consumers.

In doing so, the objective must not be to imitate the perceived value of the previous, limited resource because the renewable resource will never equal the value. Instead, the goal must be to offer a credible alternative to customers. For example, Poiscaille offers customers diversity, by varying the daily catch within its network of fishers, in this way allowing customers to discover new species and tastes and to choose fish and seafood from different geographical areas. It also offers ultra-fresh fish delivered within 48-72 hours thanks to its on-demand selling and direct sales model, which optimizes the value chain, whereas traditional seafood shops’ supply chain can take a week to deliver. In this way, Poiscaille makes “forgotten” fish tasty for customers.

When it comes to hemp, there are specific advantages there, too, that can be exploited: Because the fiber grows locally, local production and processing can be promoted to customers who are more and more appealed by local products because they see in the former a guarantee of quality or sustainability or even patriotism. Furthermore, blending the fiber with cotton compensates for the coarseness, while the clothing benefits from the properties of the hemp: Hemp clothing has a longer lifespan than cotton, antibacterial properties that reduce the need to wash hemp clothing, and is heat-regulating for the body, which makes the fiber useful for sportswear brands.

New Actors, New Value Chains

Triggering sustainable change means integrating renewable (or less threatened) natural resources into industries that rely on unsustainable value chains by bringing in new actors with the capacity to build entirely new value-creation models. These new, sustainable value chains must be built from beginning to end. Thus, Virgocoop has rebuilt the entire hemp value chain in France by promoting the benefits of hemp cultivation to farmers, rebuilding lost know-how in fiber drawing and weaving, and by convincing clothing brands to develop hemp fiber collections. By the same token, the Slow Flower Movement, which promotes locally grown flowers to avoid soil and water pollution in “pollution havens,” has rebuilt local cut flower value chains in eight Canadian provinces and eight U.S. states, from flower farmers to regional wholesale centers to retail florists.

To activate these transformations, we need to focus on the pivotal actors who can initiate and coordinate new value chain production. Brands such as Poiscaille are located downstream, while cooperatives like Virgocoop or nonprofits like the Slow Flower Movement are at the edge of the industry, but they each play a key role. Each pivotal actor first activated the transformations by identifying a business opportunity—as the Slow Flower Movement identified an interest in selling local flowers in the Seattle area—and then coordinated it by mobilizing actors throughout the value chain, be it fishers, transporters, or local distributors in the case of Poiscaille, or hemp farmers, weaving workshops, or clothing brands in the case of Virgocoop.

Small Starts, Big Transformations

However small the changes may seem, we remain optimistic about the transformation of industries towards a more sustainable use of natural resources. The Slow Flower Movement offers an encouraging example of natural resource conservation, and the initiative has been replicated in different countries such as the UK, France, or Australia. Poiscaille still represents less than 10 percent of the consumption of the French fishing industry, but once it represents a non-negligible share of French consumption, it will be able to defend small-scale fishers and impose standards on the market to improve conditions for both fishers and French waters. Finally, Virgocoop is still struggling to develop the know-how within the countries, but once the proof of concept is made, it will be able to transform the European clothing industry. In each case, the only way to stop resource depletion is to reinvent the industries that depend on them.

Read more stories by Guillaume Carton & Julia Parigot.