By Allyssa Kennedy
Account Director | Crossroads
In April, Luna Bar paid the bonus gap between men and women named to the U.S. national soccer teams.
On Sept. 20, millions of students walked out of classrooms across the country protesting government’s collective lack of action to combat climate change.
And earlier this year, Larry Fink, CEO of Blackrock, released a letter to CEOs stating that the investment firm would be looking at how a company’s purpose is informing it’s long-term business strategy to guide Blackrock’s future investments.
All three of these events represent the growing relevance of sustainability, comprising environmental, social and economic issues, on our culture. It makes headlines. It drives financial performance. And this is especially true for brands.
Brands today aren’t just feeling the pull to be more sustainable, they are in a vice grip. Pressures to change core aspects of business, from manufacturing to social activism, are coming from all sides: Consumers are shifting to purchasing brands with sustainability at their core. Top investment firms are pressuring corporations to take on environmental and social issues or risk losing investors. And what’s more, employees desire to work for businesses that stand for and do good.
So what’s a modern brand to do?
Formulating a commitment to sustainability can help brands identify on a purpose that can be woven into every aspect of its business. Although this can not be done overnight, the exercise is a worthwhile avenue to help a brand address demands from stakeholders that not only move the business forward, but also add good to the world.
Brands with sustainability at their core are winning at shelf. In 2018, Nielsen reported that 73% of consumers said they would definitely change their consumption habits to reduce their environmental impact, and 38% would pay higher-than-average prices for products made with sustainable materials.
However, the opportunity for brands to put an emphasis on sustainability goes beyond consumers. Here are some examples of how other companies have risen to the challenge and created new opportunities or better businesses through the lens of sustainability.
Today’s employee wants to work for purpose & mission-led companies. Companies with sustainability cultures enjoy 50% higher morale and 16% higher productivity.
Build trust with customers.
Aligning with customer sustainability programs can build trust through shared values. Walmart’s Project Gigaton asks their suppliers to join them in committing to reducing CO2 emissions by 2030.
Create a supply chain advantage.
Companies with higher emphasis on environmental safety report huge operational savings. Dow Chemical reports a $5 billion saving with a $1 billion investment.
Discover new business opportunities through innovation.
Redesigning products can lead to growth. Nike’s Flyknit technology is a specialized recycled polyester yarn system that minimizes labor and waste. Since 2012, it has saved $3.5 million of waste and generated $1 billion in revenue.
Deliver on investor expectations.
It’s not only Blackrock holding companies to a higher standard. Investment firm Investor AB firmly believes that a sustainable business approach is a prerequisite for creating long-term value and expects its portfolio companies to take on a proactive rather than a reactive- and risk-focused approach to sustainability.
Meet consumer needs.
Like that Nielsen study reports, consumers are shifting to purchasing to brands with sustainability at the core. This is supported further by Unilever who says its 26 Sustainable Living Brands that combine communicating purpose with action on social and environmental goals are growing 50% faster than its other brands and are driving 70% of the total turnover.
Valent U.S.A., a subsidiary of Sumitomo Chemical and provider of agricultural crop protection and enhancement products, lives out its commitment to a sustainable, abundant food supply by supporting its customers’ sustainability goals through products and sustainable agricultural practices.
“Sustainability has long been at the core of what we do at Valent, yet we haven’t always emphasized it in our marketing strategy and sales efforts. Highlighting this focus, by telling the story of our sustainable product portfolio and efforts, helps our customers and ultimately, the consumer, realize we are aligned with their priorities,” says Kara Jackson, Marketing Manager, Sustainable Solutions at Valent U.S.A.
If we can now agree that brands should turn their focus on making sustainability core to their businesses, the question becomes how. The ultimate goal of building a sustainability strategy is to unify company-wide activity within a singular actionable framework that ladders to an overarching ambition or purpose.
The first step is to develop a comprehensive understanding of the current business and industry landscape, including areas of need and opportunity. Most companies already participate in “sustainable” activities that could provide direction for a larger strategy. During this phase, one output may be a materiality assessment in which a brand can plot key environmental, social and economic factors that may impact its business to determine which are most important to its stakeholders.
From there, a brand would craft a purpose statement. What is it that the brand does well that the world needs, beyond its product? The statement must then be supported by goals and KPIs. Lastly, a brand should develop an action plan for how those goals will be accomplished.
At this point, brands might also consider aligning its goals to the United Nations Sustainable Development Goals (SDGs). These 17 global goals outline the greatest needs of our planet to help guide the activities of brands, NGOs and governments for maximum impact. A brand need not have an activity supporting each of the 17 goals, but instead can point to a select few SDGs that its activities ladder up to.
Purpose is a living force behind a brand’s mission, vision and promise. When a brand embraces its purpose, it fuels every aspect of business: from internal innovation to consumer interaction with an end product.
A sustainability framework is the road map.
By looking at purpose through the lens of sustainability, brands can identify their purpose, meet the expectations of stakeholders and remain relevant in the minds and wallets of modern consumers.
Learn more on how to turn purpose into a competitive advantage for your brand here.
Dec 05, 2019
Consumer Products, Finance, More, Purpose, Restaurant, Retail, Sustainability
Please submit your email to download content. Your info will not be shared with any outside sources.