Overconsumption

The Impaakt Team

9 min Read Time | March 21st 2023

Key Takeaways

When rating the value, consider the absolute impact described - that is, the direct impact related to overconsumption on people’s well-being and the environment.

When rating the severity of a company’s impact, take into consideration aspects such as how many people buy from the company, how deeply it affected the environment, and how long lasting are the company’s tactics to increase consumption.

Keep the score in perspective. When rating, remember companies provide key products and services, like food and clothing, as their key contribution to society. Other impacts arise as costs or benefits from the company’s operations. In this sense, how the company contributes to Overconsumption should be rated as a cost of the company’s core societal contributions.

What are companies' impact on the social and environmental issue of Overconsumption?

The overconsumption of resources at a faster rate than the system’s capacity to replenish them depletes natural resources and increases environmental damage. Excessive consumption worsens climate change and increases pollution while contributing to over 90% biodiversity loss and water stress. Overconsumption is also detrimental to consumers’ health.

Consumerist tendencies, fueled by over-present and targeted advertisement, have been linked to “lower levels of personal well-being”, depression, and anxiety, as well as the loss of social fabric. Research shows advertising “goes as far as lodging itself in the brain, rewiring it by forming physical structures and causing permanent change”, going as far as to influence behavior.

At Impaakt, we delve into the impact of overconsumption driven by the following industries: “Apparel, Accessories & Footwear'', and “Advertising & Marketing''. It is important to recognize that many companies operating in these industries profit from overconsumption by employing marketing strategies that encourage it. For instance, the fashion industry frequently pushes consumers to buy new clothes, accessories, cosmetics, etc., to keep up with the current trends.

Further, fast fashion brands make cheap, fast-produced clothing of lower quality and longevity, meaning the customer will soon get rid of them, only to repurchase quickly. Advertising companies also play a significant role in overconsumption. Companies spend large amounts of money on advertising, encouraging repetitive consumption, increased visits to the shop, and impulse buying. Some of the big spenders are the same ones benefiting the most from overconsumption. Advertisers manipulate consumers to purchase more by tapping into emotions like fear, desire to fit in, passing off products as new and inventive, and leaning on people's aspirations.

The main impacts include

  • Debt
  • Unnecessary expenses
  • Social and psychological damage
  • Waste Pollution and GHG emissions
  • Predatory material sourcing, and depletion of natural resources
Sources: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12

Frameworks

How do we incorporate the topic of Overconsumption into multiple categories within our frameworks?

SDG Choice

Sdg 12

SDG 12 aims to ensure sustainable production and consumption practices. Managing and reporting food waste relates to this goal.

Impact Category choice

Impact category

Products: the impact is generated while using the company’s products/services (Eg: Cruise Lines, Marine Transportation, Coal Operations, Waste Management, etc.).

Investment Leaders Group (ILG) theme:

IGL theme

Food waste best relates to the theme of Well-being: “This refers to enhanced health, education, justice and equality of opportunity for all".

SDG Choice

Sdg 12

SDG 12 aims to ensure sustainable production and consumption practices. Managing and reporting food waste relates to this goal.

Impact Category choice

Impact category

Products: the impact is generated while using the company’s products/services (Eg: Cruise Lines, Marine Transportation, Coal Operations, Waste Management, etc.).

Investment Leaders Group (ILG) theme:

IGL theme

Food waste best relates to the theme of Well-being: “This refers to enhanced health, education, justice and equality of opportunity for all".

Get familiar with the 5 steps to get started as an Impaakt rater

Before building skills for a specific topic, make sure to read our Knowledge Center: Rating for Impaakt. This resource outlines the 5 steps necessary to get started as a rater and provides key information about our metrics. By going through this guide, you will ensure that you are well-informed to provide accurate ratings on any given topic.

How to rate the topic

Value


Value is the absolute impact the topic has on the planet or society. To assess the value you need to think about how positive or negative you consider the topic and the impact described.

The value is linked to the topic treated and not to the company’s specific impact. Thus, the value should hold some consistency across industries.

When deciding your rating on the value, ask yourself:
How negative do you consider impacts related to overconsumption, like debt, unnecessary expending, social and psychological damage, waste, pollution, predatory material sourcing, and depletion of natural resources to be?
Note: Due to the nature of this topic, it should be rated negative or strongly negative.


Severity


The severity is related to the company’s impact. It consists of three dimensions: Scale, Scope, and Irremediability.

Scale

Scale is related to the complexity and profundity of the impact described (i.e., it's related to the extent of the impact).
When deciding the scale, answer the following questions:
  • Did it deeply or marginally impact people’s lives, health, savings, etc.?
  • Did it deeply or marginally impact the environment?
  • How effective and influential have the marketing campaigns been? How profoundly have the company’s tactics to increase consumption been?

Scope

The scope captures the range or extent of the company’s impact and it is related to the quantitative part of the analysis. For this topic, the scope is multi-dimensional and can be addressed from different angles considering what is disclosed in the analysis.
When deciding the scope, answer the following questions:
  • What is the extent of the company’s impact?
  • How many people buy from the company? How many products did the company sell in a year?
  • Other qualitative information like the number of campaigns ran during the year, the number of people that saw the company’s advertisements, etc. can also be considered.

Irremediability

Irremediability evaluates the impact of the company over time (i.e., is linked to the duration of the impact described)
When deciding the irremediability, answer the following questions:
  • Is it likely that the impact will continue impacting people's lives and behaviors in the future?
  • Is it likely that it will continue impacting the environment in the future?
  • How long-lasting are the company’s tactics to increase consumption? For how long are these going to have an impact?

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