If I were to ask you think about the term “environmental sustainability”, what words or images would come to mind? An activist chained to a tree? A ‘cultural revolutionist’ with bongo and daisy chain necklace in hand? A logo of Earth colored entirely in green with leaves sprouting from its crust? All somewhat likely.
A more uncommon association may be that of the corporate executive, in business dress with laptop case and hand extended to the side, shake-ready. However, we may be reaching a time when these two worlds collide.
Sustainability is being incorporated into many companies’ CSR (Corporate Social Responsibility) programs. Recently there has been a rise in brands promoting sustainability in their marketing (Nike for one has a vast section dedicated to this on its website), as well as sustainability-focused brands entering (and succeeding in) various markets (e.g. Method and Natura). Since 1999 there has been a global benchmark of sustainable companies published: the Dow Jones Sustainability World Index. Others have followed, including Global 100 by Corporate Knights, a Toronto based advisory firm. Both indices are heavily weighted towards a company’s commitment to environmental responsibility.
Now, I’m not expecting all businesses to change their dress codes to ensure employees adorn psychedelic-colored clothes or that acoustic guitar-led sing-a-longs become a part of board meetings. Rather, companies recognize that their impact and position on the environment could impact on their performance in the market.
Some reasons for the growing influence of sustainability within companies are:
● Increased pressure from buyers to match the changing needs in the population at large. People want to use brands that align with their beliefs, and for a growing number, a strong stance on sustainability is a key part of their personality. As the impact that humans have on the environment becomes a more central part of the global discourse (including most recently with the news coverage of the UN Climate Change Conference in Paris), is it feasible that sustainability will be an important consideration for the majority of consumers (and b2b buyers) in the near future? Considering that the most environmentally-focused consumers millennials, the chances are high.
● Increased pressure for companies to differentiate their position in competitive markets. If this can’t be done on a product level, then it must be achieved on a brand level – and often brand differentiators are the most powerful.
● Increased pressure from environmental agencies and charities for companies to be more transparent about their carbon footprint, including the impact of their suppliers / value chain.
● The intrinsic benefits felt from being environmentally-focused. Firstly, there may be cost savings (e.g. from recycling waste products of manufacturing / redesigning packaging); secondly, it is likely that employees and company owners are also environmentally- focused.
While the motivating factors prompting an increased focus on sustainability will differ from company to company, it is worth considering whether this position is of any benefit. B2B International often includes a test of a brand’s environmental credentials or position on sustainability in our surveys, and more often than not we will see it as a very weak driver of brand satisfaction or loyalty.
Despite this, it is unlikely that brands have been making this shift for no reason – without a financial incentive, it is unlikely that any of the factors previously lifted could motivate a brand to make wholesale changes. In fact, Nielsen has reported that 55% of consumers are “willing to pay more for products and services provided by companies that are committed to positive social and environmental impact.” Half of all global consumers have purchased a product from a socially responsible brand.
Any company worth its salt knows that segmentation is a key element of marketing to and targeting customers, and a sustainable position isn’t going to appeal to everyone. We often find that people’s stated beliefs don’t necessarily translate into behavior – particularly on a socially conscious subject such as the environment. However, all parts being equal when comparing two brands, it could be that sustainability is the tipping point in brand selection, and in markets where product differentiation is minimal, sustainability could be the edge that some brands desperately need.