Written by Jennifer van Beek and Charlotte Hugman
Our global systems of trade, production and consumption operate in a way they not only put ceaseless pressure on the environment, but also allow extreme persistent socioeconomic inequalities. Through outsourcing and offshoring the trend of decoupling the benefits and burdens of economic growth has been accelerated. As part of a blog series on inequality (check our previous blog), this blog post explores what.environmental burden shifting means. What are the impacts of burden shifting and what can the private sector do about it?
What is the issue?
Around 50 million tons of electronic waste is thrown away each year, and this is projected to double by 2050 . Just as striking, 80% of this waste “ends up in landfill or is disposed by informal workers in poor conditions” . This comes with severe health and environmental implications that are predominantly felt in the Global South where the e-waste is dumped, while the products causing this waste are mostly consumed in the Global North, see figure 1. In the same vein, every year half a million tonnes of plastic waste gets dumped in China, India, the Philippines, Brazil, Mexico, and Nigeria by Coca-Cola, Pepsi-Cola, Nestlé and Unilever alone .
Such dumping practices are certainly not exclusive to waste cycles, but rather occur in a manifold of industries and processes. Environmental burden shifting is seen as an overarching concept that also includes the offshoring of hazardous factories and the unequal dispersion of greenhouse gas emissions . While these practices already illustrate a clear problem, they result from several more complex underlying issues. Burden shifting can be approached as a complex system characterized by “the interconnectivity of economic, political, social and ecological issues across temporal and spatial dimensions” . First, there is a difference in economic power that underlies where the processes occur (the spatial dispersion). In general, consumption of luxury products is concentrated in wealthier countries, while less wealthy countries deal with their production and final waste processing. Moreover, international trade relations facilitate countries in dissociating where a product is made, used and disposed of (its life cycle). This also relates to differences in political power embedded in long-standing Global North-South relations. Additionally, the process of burdening poorer countries with hazardous waste and pollution too often contributes to social as well as environmental inequalities and issues:
- At least 12% of pollution-related deaths are caused by production processes of which the products are exported and consumed elsewhere 
- 20% of India’s and 13% China’s emission pollution come from outsourced operations 
- Over 60% of world clothing exports are manufactured in low-income countries, while high-income countries represent 75% of global clothing retail 
This shows how environmental burden shifting creates and reinforces inequality by bringing the benefits to the already well-off, while placing the burden on the less well-off. Failing to recognise the interconnections and feedback loops poses a great threat to the resilience of vulnerable communities . The urgency to address burden shifting becomes increasingly clear, which requires the Global North to take responsibility for what they now mistakenly regard as externalities that they don’t have to pay for.
Owning the end to end cycle
As said in the words of one of the greatest economic rethinkers, Kate Raworth, “economics is broken”. We need to reshape our economic system to one that avoids extreme socioeconomic inequalities and the depletion of natural resources, while enhancing people’s well-being and restoring ecosystems’ functioning. Foremost, systems of trade, production and consumption should be drastically altered. The private sector has a huge role in this and should be at the forefront of driving such changes.
As a first step, the role of companies in burden shifting should be recognized and understood. The World Benchmarking Alliance recently established an assessment tool to identify companies’ impact in developing countries [see [LINK 1] : here]. This tool acknowledges that companies have an impact beyond their direct operations meaning that the impacts from indirect operations, that happen through subsidiaries, contract manufactures and joint ventures, should equally be considered. Since their operations have a disproportionate impact on developing countries, this is where the focus for assessments and improvement should be. For example, a company that sources its products from a foreign subcontracted factory should still take account of the wages being paid in and the potential pollution impacts of the factory.
Moreover, companies should commit to conducting life cycle assessments in order to expose a product’s impact throughout its entire life cycle . Mapping out this impact is a fundamental first step to avoid burden shifting from one place to another. Finally, companies should engage in sustainability reporting to increase the transparency of their operations and consider their environmental and socioeconomic impacts. Various initiatives provide frameworks for companies to use to understand and report on their impacts.
The Covid-19 crisis showed us the weaknesses of our current market-based systems. A halt in the supply of foreign products left essential demand unmet and due to the slowdown of production and consumption many people found themselves without an income, unsurprisingly, hitting the already less of the hardest. Now more than ever consumers need to rethink what and how they buy, while companies should take responsibility for their true impact, so that each and every one is impacted fairly.
The World Benchmarking Alliance has begun to work on its circular economy transformation, one of seven key system transformations. Understanding how companies globally approach waste across their operations and their supply chains will be at the centre of this work. In addition, the social risks associated with a linear system but also the potential unintended consequences of switching to circular business models should also receive adequate attention during upcoming methodology development.
It’s never been more important to embrace systems thinking and complexity. Through this, we can enable transformational change that leaves no one behind.
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