Scoping Mission of the Colombian Coal Sector, report for the Dutch Parliament

Responsible coal mining has become a major topic on the Dutch political agenda. For at least the next 15 years, coal will continue to be an important contributor to the country’s energy mix. Hence, the Dutch government is keen to support and strengthen responsible practices in the coal supply chain, in particular in the main sourcing country, Colombia.

At the request of the Embassy of the Kingdom of the Netherlands in Colombia, The Terrace and BSD Consulting were selected to do a “Scoping Mission of the Colombian Coal Sector”. The objective was to understand the situation on the ground in the coal mining regions of Cesar and La Guajira, where the operation of large-scale and open pit coal mining destined for export is concentrated, and to define the outline of a possible contribution of the Netherlands.

Our team travelled to Colombia to visit the mining regions and to speak to all relevant stakeholder groups (Colombian government, mining companies, labour unions, local communities, NGOs etc.). Over 50 interviews were undertaken to ensure that the defined proposal for a Dutch contribution is adjusted to Colombian reality and to local stakeholders’ needs. Many concerns were expressed regarding a large variety of social and environmental issues, influenced by a difficult political context with 50 years of internal conflict.

The Scoping Mission has concluded a contribution by the Dutch government to take on the social, environmental and labour challenges in the coal mining areas is feasible and desirable. This should be done in close cooperation with relevant Colombian stakeholders. The Scoping Mission recommends a contribution based in four possible work streams:

a. Mediation of a dialogue to solve conflicts between stakeholders;

b. Through continuous dialogue, encourage the Colombian government to be more proactive in addressing social and environmental challenges in the coal areas;

c. Support reliable and independent data collection of environmental and social impacts caused by local industrial development;

d. Support thematic projects that address pressing challenges in the mining region (e.g. to improve water management).

The final report has been sent to Dutch Parliament by Minister Ploumen (Foreign Trade and Development Cooperation), in preparation of the Minister’s visit to Colombia in late November. The report “Scoping Mission: Understanding the Context of the Colombian Coal Sector” can be downloaded here.


What to do with unexpected clients? - And how not to lose them

“You are not really going to ride that ugly car, are you?” Since I admitted to buying a Mitsubishi Outlander I get overwhelmed by disappointed reactions from friends and family. Because they are car lovers. Petrol heads.

I get their point, but…

The diesel guzzlers they love to drive are not very sustainable and a more environmental friendly car had been on top my wish list for quite some time. The Mitsubishi Outlander seemed the ‘least dreadful’ version of all hybrid cars on the market. A little less ugly and dull than the others, so to say. Take into account the tax benefit on top of that and the choice was easy.

Reluctantly though.

Brands are part of our identity

We all have our preferences for specific brands. Whether it is conscious or unconscious. We search for a brand with features that are in line with our own desired personality. By choosing a specific brand, we are associated with a target group to which we would like to belong. While one person does not want to be associated with a Japanese car at all, the next will not stop talking about the amazing technical features of the same car.

But what if ‘your’ brand does not deliver the kind of product or product features that are very important to you? What if none of the brands you prefer offer a sustainable choice?

That will force you to step out of your comfort zone and look at another brand. This brand then has the challenge to connect with these new, unexpected clients. And to keep them, without losing their existing clients.

11.000 sold cars without test-drive (but “Mit-subsidie”)

Mitsubishi is a strong player in the hybrid car market. A few years ago, the Japanese brand said to have the ambition to focus on the production of sustainable SUVs for an affordable price. In 2020, 20% of their cars will be electric or plug-in hybrid. Electric driving will become one of the pillars of their worldwide sales strategy.

And it is already paying off, so it seems. Last year the brand took the semi-electric Outlander PHEV to the European market. Aided by the significant the tax benefit (the Dutch nickname the brand ‘Mit-subsidie’ – with subsidy) there was a big run on this car. No less than 11.000 cars were sold without the future owners even taking a test-drive.

Awkwardness in the showroom

Mitsubishi is known for its user-friendly cars for an affordable price. The dealers have adjusted their sales pitch entirely to this message. But how do you approach this new group of sustainable buyers? They clearly have no idea, so it seems when I walk into the showroom with my wallet already pulled out.

Dealers seem to be ashamed for the relative high price of the sustainable Outlander. They think it is a waste of money to pay for the extra features and have almost nothing to say about the sustainable qualities of the car. With every unanswered question, I get more uncomfortable.

The green ambitions of the management have obviously not yet reached all layers of the company.

But as long as there are no serious alternatives, Mitsubishi will profit from this situation. However, there is no reason to sit back and relax. Other European brands will follow suit with their own affordable hybrid. And if Mitsubishi’s unexpected clients still do not feel at home with their new brand, they will go straight back to their own familiar brands.

Know your customer

Bringing a new sustainable product to the market has a lot of consequences. One of them is that you may gain a new target group. The group of consumers that makes choices based on the sustainability of a brand is growing. This group is focused on innovation in the market and they like to be well informed.

As a brand you need to be prepared for this. Being the first with an innovation only gets you one step ahead on short term. If you want to keep those customers in the long run, you need to make an effort. You have to understand your customers. What motivates them? What are their wishes?

This means that your sales people should learn how to handle different target groups. Which clients is motivated by price and which clients do you seduce with the technical aspects of the product?

Learn their language. If new clients feel understood, they might (unexpectedly) become a regular client


Baby you can drive my car: business opportunities in the sharing economy

A new economy is on the rise. A growing number of companies are gaining interest in an economy where collaboration is essential. This emerging economy has many names, from Collaborative Consumption to lease-society, from peer economy to maker movement. But it all comes down to the same thing: we share. This exchange is not only limited to tangible objects, but can also include the exchange of skills or services, for example a shared car drive.

Sharing is not a new phenomenon. But due to the Internet and other innovations the scale on which the sharing economy is operating is much bigger today. Where does this renewed interest in sharing come from and what are the opportunities for companies?

From hyper consumption to sharing economy

We live in a predominantly capitalistic society. Our way of consuming is based on a fascinating system. In order to sustain itself, it needs to grow. In order to grow, it needs to be fed with more consumption. Psychologically it works like this: people want to own more as they acquire more, which is of great convenience for business, they’ll produce and sell in an equal pace. Within the past century, we saw the unprecedented rise of individual property, credit, and commercials. Together they resulted in a system of hyper consumption.

Entering the 21st century - certainly after the start of the economic crisis of 2008 - we see a shift from a consuming, individual society to a culture where a growing number of people are starting to collaborate. During the crisis, people began to lose their trust in large organizations who seem to appear only as greedy, hungry monsters only looking for one thing: profits. The new emerging economy offers a new perspective to these people. Shared access overrules individual ownership, reputation is the new credit and commercials are replaced by the quality of the community. These three pillars are the basis of the Sharing Economy.

Shared access

In the sharing economy, it’s about ‘access’ over ownership. We have to make a mind shift, instead of owning a product; we’re using the services a product provides. In other words, we don’t need the light bulb, we need the lumen. Like mushrooms in autumn, companies with a sharing philosophy pop up everywhere. On the popular platform of Airbnb, people rent out their spare room, air mattress or backyard tree house to visitors. On peerby, neighbours lend out their toolkits. Do you need advice on your business plan, or do you want to learn Spanish? Konnektid will connect you to a person who can help. And for easy transport, you can always borrow a car via Snappcar. These platforms offer consumer-to-consumer sharing services. A typical B2B platform is Floow2, where heavy construction vehicles and business equipment are being shared. B2C platforms, such as Netflix, see their list of customers grow. Important in the sharing economy is your community or network. The bigger it is and the more whufffie you have, the more access to goods, skills and services are being offered. Which leads us to explore the whuffie-factor.

 Share stuff, gain whuff!

You probably wouldn't lend your car as easy to a stranger as you would with your garden tools. In essence, the exchange comes down to a relation of trust. Trust is mainly build on the reputation of both the lender and the borrower. In the sharing economy, reputation is your capital: it’s social capital. And its’ currency is called Whuffie. Whuffie originates from the book Down and Out in the Magic Kingdom by Cory Doctorow. In this novel, money no longer exists and people pay with whuffie. Whuffie is obtained through sharing goods, skills or other services. The good thing is: the more you share, the more whuffie you receive. For companies, social image or whuffie is just as important. Examples of companies who have already joined the sharing economy are Bosch, with a leasing model for washing machines and refrigerators, and Achmea, who have started their own sharing initiative: WeHelpen.

Community

Whuffie is a strange currency because it’s not directly visible. It is measured only in your relation to other people. You need to build a community of trust with the people or companies around you. Only trying to sell your product will not work. You will have to reach out to your customers and make a real, long-term connection, for example through a leasing system or after-sales services, so they will come back. But also think of the numerous opportunities there are online. The web is getting bigger and bigger and there are an increasing number of websites and apps that offer sharing opportunities all around the world. The sharing economy is a local community on global scale.

Together, we have created a glocal community where people can share items, save money and have more contact with each other, online but even better in real life. For companies, the sharing economy has created new markets via access versus ownership; it sparked the consumer mind-set of we and together instead me, me and me; it has extended customer relationships from ‘point in time’ to ‘point across time’ and created word of mouth through a user community.

The sharing economy is growing. Not only new individuals, but also institutions as the municipality of Amsterdam (Amsterdam Economic Board) and Brussels have shown interest and discuss the possibilities of how to best facilitate the sharing movement. This shows that the sharing economy is not just a flash in the pan but is here to stay.

Author: Fien, intern at The Terrace. In the coming months, she will submerge herself into the world of the sharing economy.


Black Friday: because shopping is fun, but should it be greener?

In Europe we look with wonder at the millions of Americans who line up in front of Walmart to get their hands on a good bargain the moment grandpa puts down his fork after a convivial turkey dinner. ‘Black Friday’, the day after Thanksgiving, marks the official start of the holiday shopping season in the United States. Retailers use the hype created around the tradition by offering appealing discounts that move consumers to camp outside of stores waiting for the early openings. This year, the National Retail Federation estimates 147 million Americans will start their holiday shopping during the Black Friday weekend, boosting sales of retailers who hope to clime out the red numbers into the black.

So what exactly is moving American consumers to give up their precious night’s sleep and spend hours on end queuing up to spare a few bucks? Fact is that for many, bargain hunting the day after is just as much of a tradition as the turkey and pumpkin pie on the night before. The rush of finding that two-for-one and being able to give your family members that extra special present under the Christmas tree can be a truly satisfying experience.

However, not everyone is thrilled about the exorbitant expression of American consumerism that heralds the holiday season every year. Reoccurring stories about fights and stampedes of frenzied shoppers have led to a somewhat tainted reputation of the tradition. In recent years, retailers themselves have become the cause of resentment due to their decision to move up opening times to 9 and even 8 p.m. on Thursday, nibbling their way into the sanctity of Thanksgiving Eve. Both employees and families are starting to grow weary of the relentless efforts of retailers to maximize their profits at the cost of family tradition.

The upside to all this fuss is that an increasing number of citizens and companies are seizing the discussion about Black Friday as an opportunity to push for positive change. Last year, Patagonia published their surprising and inspiring “Don’t Buy This Jacket” ad on Black Friday, encouraging consumers to think about the environmental impact of their behavior. This year, too, the call to use Black Friday as a moment to vote with your money and choose for sustainable alternatives is growing louder.

That definitely sounds good to us. Almost as good as a slice of pumpkin pie.

Written by Leontine Gast and Jacobien Crol