For Admap's April issue on sustainability, Chris Arnold, founder, Creative Orchestra, details how doing good for the environment and doing good for humanity go hand in hand, while it is increasingly evident that it’s also a healthy business strategy.
Climate change is having a detrimental affect upon communities all across the globe and it’s predicted that within 12 years the effects will be so dramatic that it will create significant changes to our daily lives, even in the comfortable West. The fundamental problem is consumerism. The more we consume, the more damage we do. It’s a vicious, escalating spiral.
Consumers are driving change
The brand proposition is now driven, not by planning, but by the consumer. They are now dictating the agenda, and top of that agenda is ethics. From environmentalism, human rights, and animal welfare to community, brands need to demonstrate that they are about more than making money, exploiting people and the planet for profit.
In today’s over-connected world, consumer communities are quick to challenge hype and tell the real truth to each other. A 12-year-old in Oldham or Ohio can bring a brand to its knees with a single social-media post. This really is the age of ‘the customer is king’, and he’ll behead you if you don’t give him what he wants. For companies it’s not about what you say, but what you do. Those that can demonstrate they are truly good will be the successful brands of the future, and those that don’t will find themselves out of business.
From plastic bags to food waste, from turning out lights to car sharing, the consumer has responded with enthusiasm to environmental challenges. Research shows that consumers want to be more ethical and therefore expect brands to uphold the same values, if not go beyond them. Today’s modern consumer wants the brands they buy to have a positive impact on the world.
Brands are responding in different sectors and through different strategies to meet these new demands from society and to be kinder to the environment.
Big brands paving the way
Both Unilever and P&G have been investing for over a decade in changing the whole approach towards business, a slow process that is now paying off. It takes great leadership and vision to make giants change direction. And both have proven the business case that “doing good is good for business”. Unilever stated in 2017 that its sustainable brands grew 46% faster than the rest of the business and delivered 70% of its turnover growth.
The Unilever Sustainable Living Plan has been in operation since 2010 and set ambitious targets to decouple Unilever’s growth from its environmental impact, while increasing the company’s positive social impact. Social benefit is also integrated into education, Unilever’s programmes on hand washing, sanitation, oral health, self-esteem and safe drinking water has reached over 600 million people.
Meanwhile, P&G believe they can be a force for good and a force for growth, and are “taking a more deliberate approach to delighting consumers,” to quote P&G’s Chairman, President and CEO, David Taylor.
“Consumers expect the brands they trust to deliver superior performance and to also help solve some of the most complex challenges facing our world. Our global reach, our understanding of the five billion consumers we serve, and our innovation capabilities give us a unique ability to make a positive difference.”
P&G’s programme, AMBITION 2030, focuses on supply chain, employees, society and brands and seeks to address two of the world’s most pressing environmental challenges: finite resources and growing consumption.
For any brand to deliver ambitious goals they need to work in partnership with governments, NGOs, charities and communities globally. Kraft Heinz and Lego have both used partnerships for successful initiatives.
Hunger impacts nearly 800 million people worldwide, so to make a sustainable difference in the fight to eliminate global hunger and malnutrition, Kraft Heinz have partnered with non-profit organisations, such as Rise Against Hunger, to help provide 1 billion nutritious meals and micronutrient powders that deliver essential vitamins, minerals and iron to people in need by 2021. The initiative is positively impacting the lives of millions of children around the world.
There are 68.5 million people displaced worldwide, among them are 25 million refugees, half of whom are children. The Lego Foundation has recently partnered with Sesame Workshop and given $100m over five years to bring play place learning to refugee children in Syria, Bangladesh and other areas. Early childhood learning (especially in the first seven years) is essential to development, yet less than 3% of humanitarian aid goes towards education.
While many big brands are already on the road to making a difference, some seem to be oblivious of the changing values of consumers.
Brands can act now (become an agile adaptor and innovator), talk about the issues (suffer from active inertia) or do nothing (be in denial). There really isn’t any other choice. The successful brands are the ones facing the future, forcing change and acting now. The laggards will soon find themselves isolated and even boycotted by consumers if they are not aligning their values to those of the consumer – it doesn’t work the other way around.
Changing convenience behaviours
While public opinion demanding greener initiatives is having a powerful impact on brands, it’s complicated by the fact that what people want is not consistent. Many brands are stuck between an economic hard rock and a green place. Consumers want convenience and low prices, but they also want brands to be more ethical and take responsibility for sustainable practices. How many people have stopped using plastic straws but continue to drink water from a plastic bottle? Or buy ethical fashion but then pop into Primark?
One area that consumer trends are at odds with best practice for the environment is cheap clothing. Fast fashion is a massive contributor to landfill, over 11m tons of textiles are binned in the US alone annually, not to mention sweat shops and the environmental cost of producing the clothes – to make the average T-shirt takes 700 gallons of water. Some brands are taking a stand by recycling, educating consumers and moving into areas more traditionally connected with charities.
Canadian fashion-brand Preloved recycles over 100,000 sweaters a year, keeping them away from landfill.
Budget fashion retailer H&M are now selling more and more items, up to a third of stock, made from recycled materials – wool, polyester, cashmere and ECONYL, a 100% regenerated nylon fibre made from fishnets and other nylon waste. Additionally, they are starting to educate consumers about how to look after clothes and reduce the environmental impact.
You can’t write about fashion without mentioning Patagonia, the ultimate ethical clothing brand. Not just concerned with environmentalism and workers’ rights it is now embracing the ethics of tax, channelling tax savings into green causes in response to the current US government’s failure to support green initiatives. Acts like this continue to make it a favourite among consumers.
In making sustainability initiatives an integral part of business strategy, brands are also crossing over into the areas traditionally dominated by charities. Cult shoe brand TOMS is famous for donating a pair of shoes to a child for every pair sold, and to date they have donated over 60 million shoes to children in poor parts of the world. TOMS also support schemes to provide clean drinking water, eye services, and even safe birth kits, and well as branching into more local charitable schemes.
In the UK, Marks & Spencer leads the way with PLAN A 2025. While M&S continues to champion ethical production, improve workers rights and reduce environmental waste, it is also focusing on its consumer communities, believing that they have a responsibility to society close to home. Ambitiously, M&S wants to make a million lives better from mental health to age-related loneliness.
The power of community
One growing way brands can make a difference is to focus on consumer communities instead of individuals, group think is more influential especially when it comes to ethics.
For bricks and mortar stores, reaching local communities is a challenge as most connect via dark social – WhatsApp, community apps and independent platforms. All this is beyond the normal reach of advertising and social media teams. Research by CONNECT2, combined with data from Morrison’s, showed that while 45% of a community may be using social local (locally run Facebook sites), less than 4% may be on the brands’ social media platforms. Brands need to be invited in, they can’t push their way in, but more importantly to win hearts and minds they need to adapt their marketing from a communication strategy to a delivery strategy – giving the community what it wants, not expect it to want what it gives.
As much as many consumers dislike and distrust banks, TSB has led the way in its community support and engagement, champion local heroes and causes. This can create far greater brand advocacy and loyalty than traditional advertising, digital or social. More importantly it creates word of mouth and there is no more powerful advertising than that.
Engaging communities (business to community engagement – B2C2) is an area few have successfully managed – hardly any brand has a senior role to cover this area, but by 2025 it’ll be a common title.
Ethics throughout the business
While corporate ethics used to be the remit of CSR, which rarely had much to do with the real ethos of the business, that has changed.
As Lord John Browne, former CEO of BP, said in his book Connect, CSR was an experiment that failed and that brands need to “radically connect with society to stay relevant.” This has moved the agenda to corporate purpose – the reason why you are in business, just delivering shareholder value does not win over consumers or create brand loyalty.
Many new players are all about the ethics, for example, Bulb was set up to provide green energy at a low price and now has over a million customers. The FMCG market is awash with new ethical brands, from snack bars and drinks to plant based products to cleaning products, doing good is proving to be good for business as they steal away slices of the big brand’s market.
The issue with some big brands is they are trapped in an economic cycle that really defines their purpose as “maximising shareholder value”. Being more ethical is only a strategy when it delivers more income.
The ‘concerned conscientious consumer’ and consumer communities use the dollar in their pocket to make a difference, not just a purchase. The competition for that dollar is forcing brands to revaluate and change their thinking, especially as brand loyalty is something the Millennial consumer is less likely to have. Havas research shows that 63% of consumers claim to buy on belief and value. Meanwhile most wouldn’t care if 77% of big brands vanished tomorrow and 50% will boycott a brand at some point.
Additional research by Havas revealed that brands that have real purpose have outperformed the stock market by over 200% over the last decade.
While many brands are embracing sustainability, and the consumer shares some responsibility, does the push for brands to do more ultimately need to come from politicians?
Environmentalist and natural historian David Attenborough said in late 2018, “In the end the important actions can only be taken by big business, industry and by politicians”. He believes that consumers can only create significant change by convincing business, industry and politicians to act on the public’s concerns.
- Brands that can demonstrate true ethics and values through what they do, not just what they say, will be the winners in the future.
- Be honest. Don’t lie or spin. Consumers will find you out and they will take you to task and may even boycott your brand. But do good and they’ll do the selling for you.
- The consumer is in charge, get used to it. Social media is a powerful tool that can destroy a brand overnight. Being consumer centric isn’t an option but a necessity.
- It’s not just about the individual but about consumer communities – group think is highly influential. To reach a community brands need to rethink their marketing from a communication strategy to a delivery strategy – giving the community what it wants, not expect it to want what it gives.
- Think for the long term, not just till the next sales figures. This isn’t about a fashion, but about the future of the whole planet.