Samsung Electronics has overtaken Hewlett Packard as the world’s biggest consumer electronics company by volume with $117.9bn sales in 2009. How does this tie into its environmental performance?

A look at the latest the Greenpeace Guide to Greener Electronics (published Jan 2010) scores Samsung down from 2nd place to joint 7th (tied with Sony and Motorola). It was penalised for:

• backtracking on its commitment to eliminate brominated flame retardants (BFRs) in new models of all products by January 2010 and PVC by end of 2010.

• failing to show support for improvements to the revised EU RoHS Directive (Restriction of Hazardous Substances in electronics)

The guide, ranks companies according to their policies on toxic chemicals, recycling and climate change and is scored on publicly available information.

‘Change everything except your wives and kids’

UNEP e-waste map (2002)

Outside of their own gadgets, the South Korean company largely makes chips and LCD screens for other firms such as Apple, making their economic and environmental performance a broader  issue.

This should be realised as being  the  next stage in innovation and competitiveness for the chaebol which in the early 1990s made great strides by stepping up into the chipmaking and high tech world.

This is a great article from April 1994 looking at the ‘quality push’ across South Korean companies such as Samsung, Daewoo and Hyundai in more detail and pointing to the approach needed for the next surge. The language, scale, leadership and commitment are all familiar to current environmental struggles. Here’s Samsung’s then chairman Lee Kun-hee stepping up to the plate:

Lee insists with almost religious fervor that employees undergo ”mind reformation” to become more creative and global in their outlook. Lee wants to shake off what he calls the Samsung diseases, notably a preoccupation with expanding volume regardless of quality.

Sound like a familiar problem?

Steps to accountability / competitiveness

This Vodafone Dialogues e-waste report is a great example of a company being transparent and getting to grips with the problem. This type of engagement using position papers, rich media, external voices etc should (alongside policy, strategy and industry-wide commitments) be a prerequisite for companies serious about demonstrating that this is a problem and they are taking steps to deal with it.

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It seems that the kind of rebalancing that we will see is going to be political rather than the consensual economic kind favoured by developed nations.

China appears to be is in no mood to allow its currency to appreciate and help bankrupt developed economies by stimulating domestic demand,  and that 2010 will be another year of export-led growth evidenced by the recently signed free trade agreement with ASEAN countries which will further lessen the importance of the US market for China.  For James Kynge of FTChina Confidential, Beijing will be…

less inclined to do Washington’s bidding on trade issues ranging from allowing the renminbi to appreciate to the further liberalisation of its foreign investment environment

More of the same

Last year China became Brazil’s largest export market with 13% of all of Brazil’s exports China-bound. Brazil can stick to its tried and tested model of food and resources exports and go along with China, as long as China can keep up its phenomenal run.

Poltically there is little Western government’s can do apart from making loud noises to make China look closer at stimulating domestic demand. As China pushes ahead with its  de-facto development policy, taking Brazil and others along with it, the US and Europe will be further pushed to one side in 2010,  deepening the shift in power witnessed at the G20 and COP-15 meetings last year.

Backyard foes

Brazil, a democracy with elections this year, needs to tread carefully and not trample over Western sensibilities too much (their markets will recover- just not in 2010). So perhaps more visits of Iran’s Mahmoud Ahmadinejad and fiery campaign trail rhetoric are not such if it wants to avoid setting off alarm bells at the HQ of that all important seal of approval market sentiment. It is fair to predict that spooked analysts, uncertain of the new terrain, will be eager to pick up on loose language from both main candidates in the  Presidential race. Note to said analysts: Venezuela and Brazil are not the same countries.

While the strength of the real is making conditions tough for exporters, continued buoyant domestic demand is changing the face and shape of the Brazilian economy. Its predominantly urban, consumption hungry ‘new middle classes’ are driving this change.

Change is coming, but not this year

In the future, Brazil’s exporters will welcome the real depreciating over the coming year, alongside the recovery of developed markets. But for now, Brazil doesn’t need the remnimbi to appreciate – it wants to maintain the status quo.

Economically, China – set to overtake Germany as the World’s largest exporter – wants growth to become more robust the World over (including the US and Europe) before it thinks about appreciation (or tries to sell it domestically according to Andy Rothman CSLA’s chief China economist).

This continuing shift in political power, rooted in economic strength – however strange and new it, at times, seems – is what needs to come before a global economic rebalancing agenda will emerge that is realistic and achievable.

More on China’s exports at The Economist: China’s export prospects Fear of the Dragon

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I was at ExpoBrasil yesterday -a conference looking at local development strategies here in Brazil.It was striking how much expertise there is in this field which, when put alongside better public infrastructure, will work together to help many get out of poverty and at the same time help build this new articulation of prosperity that fits this high growth economy.

Ignacio Sachs spoke about new economic  directions post-crisis for Brazil. He floated this idea that the notion that being tropical is bad for development is now over.

This is an idea that crops up in many spheres, linked to environmental services and, in Brazil’s case, cultivatible land.

However, this all depends on policy. Yes,  Brazil has a lof of hydroeletric power – as it is blessed with a lot of water – but poor infrastructure planning means that  the energy matrix is getting dirtier, moving the economy away from becoming low carbon.

While biomass energy generation could be a great source of renewable energy in the future for Brazil made up of agricultural bi-products, where is it now?

In all these debates and ideas, are notions about new types of economic development. However there still seems to be an impasse between high growth and low carbon, or indeed more equitable growth.

Where I see space for this to change is in the rush to cater for low income sectors pushed by potential rewards and faltering, overleveraged developed economies. As companies adapt to meet these needs, and bring with them high ecological building standards or new green technologies around energy generation for example, new relationships of growth, wellbeing and development are being created.

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This is my 5 minute presentation at Ignite London on Brazil @ Ignite London. For those note familiar with the format of Ignite, you get 20 slides which change every 15 seconds. Apart from the odd misspeak it all went quite smoothly though I didn’t get to talk about Manaus. I tried to give a quick run down (without the economics) of why Brazil is centre stage in a rebalancing world.

The night was excellent with titles of talks ranging from Error 404 Italy as a Country Not Found to Analogue World Design Patterns: A Look at User Behaviour. The format definitely works as you just need to stick to the brief and not go on about yourself, your business or something that no-one cares about. The event was really well put together so everyone was paying attention and enjoying filling up on lots of different bits of info.

Check out the very slick Vimeo channel for all the talks or go the website for more.

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This Comment explores Brazil’s growing importance in the international environmental arena. It examines what Brazil will be taking to COP-15, a close look at deforestation, REDD and corporate commitments to environmental sustainability and asking whether Brazil will seize this chance to take the lead in its role as a bridge between the developed and developing world.

To receive the Brazilintel comment series free of charge email news@i-seeglobal.com with ‘Brazilintel Comment‘ in the subject line. Contact me directly to discuss your own research needs or to sponsor the series  – jimmygreer@i-seeglobal.com/ +447843560399

Check it out on slideshare or download the PDF here

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Pret a Manger, lunchtime destination for many an office worker looking for freshly made, non-supermarket sandwiches, has recently revealed that it sources its chicken from Brazil.

The meat is sourced from Brasil Foods, the mega company formed from the merger of Perdigao and Sadia. Upon arrival in the UK it is defrosted and cooked -  and sold as ‘fresh’ by the sandwich chain. Read the article for more.

This most recent traceability issue involving products sourced from Brazil raises some points for consideration:

1. Understand the dynamic- Brazil exports 3.6 million tonnes of poultry a year to 153 countries, providing four million jobs directly or indirectly along the way. The scale of this industry is enormous and fits into a world where more consumers are demanding meat as part of their diet.

2. Pret, alongside other UK retailers are not currently required to state where they source their chicken from. Marks and Spencer’s and Waitrose use only British chicken which although more expensive gives them, they feel, a competitive advantage over other retailers in a consumer market switched on to provenance and ‘local’.

3. Working hard to win people over – the Brazilian poultry industry, though highly regulated, has come under numerous attacks from NGOs for its lack of transparency around sustainability issues. To face up to their critics and maintain contracts with developed world retailers, the industry needs to work hard to implement even tighter regulations around welfare, working conditions etc.

This shift to dialogue, openness and transparency will become commonplace for Brazilian companies wishing to supply world markets. As footprinting of all products increases with consumers becoming more aware and demanding of retailers,  they will demand more from their suppliers.

See this recent post: 3 short films: NGO, Media and the CEO for a look at sourcing meat and leather from the Amazon

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A LUV shaped recovery for the world economy:

L for the West

U for  the US

V for Brics and the ‘next 11′

In a business and media world obsessed by synthesis and simplification this is a  a good insight into the mind of Martin Sorrell whose Group WPP which is firmly focused on the V stating: ‘brand investment is still in check, particularly in the West’

What does this mean for approaches to sustainable consumption?

For me, it means the focus for anyone interested in frames, identity campaigning and sustainability needs to be exclusively on these V countries attracting companies like WPP in their droves.

Consumers in the West, overleveraged, and worried about employment prospects just cant spend like they used to…

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Quote from FT money supply blog today…

‘The more imminent risk, though, surely is ultra-easy policy in the US, eurozone, UK and Japan helps to fuel asset price bubbles in emerging market such as China, Brazil and India – and small industrialised economies that largely escaped the crisis such as Australia.’

This article from the FT contains a number of Chinese points of view from Beijing think tanks worth getting to grips with as the picture around imbalances doesn’t appear to be getting any clearer.

In the background, another big idea has been gathering support, with much more potential to have an impact soon. A growing number in Beijing are calling for some of the reserves to be channelled to the Bric nations – Brazil, Russia, India and China – and other developing countries. This is not just about snapping up oilfields and copper mines on the cheap, as China has been doing all decade. The stated goal is much bigger: to use the reserves to help stimulate a new cycle of development and trade between China and with the developing world.

It  is clear that China is in it for the long haul in the developing world and that at the moment, it is not really sure how to, nor under pressure to, use its surpluses. Would it make  sense to pump it into, say, Brazilian infrastructure upgrading? Well, yes. Helping to boost consumer demand through civil infrastructure projects, while at the same time improving industrial infrastructure  – and easing of access to commodities – will let China share over the long term in Brazil’s growing prosperity.

The article, though admitting limitations of this type of idea, goes on to explain its current attraction:

Yet the idea is potentially powerful because it goes with the grain of big shifts in the global economic map that are already taking place. China is at the centre of powerful economic new links between developing countries. In the past Brazil’s economy would have been felled by a US crisis but Brazil could in fact grow this year. Fifteen years of sound economic policies have helped but it is no coincidence that China has this year become Brazil’s biggest trading partner. South Africa tells a similar story.

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3 short films to show how the cycle works and why it pays to fully understand what traceability means to your customers and to you.

STEP 1: Results of traceability investigation by Greenpeace

STEP 2: Picked up by mainstream media

Step 3: Response from Jeff Shwarz, CEO of Timberland

visit Greenpeace page for details of full report

Still searching for the other CEO videos on youtube…

See previous post for details of 80% deforestation commitments by Lula administration.

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