Sustainability within companies: a marketing strategy or good intentions?
As of now (2020) pretty much the entire world has heard of climate change and sustainability. Probably a lot more than once. And whether you’re a believer or a denier of climate change, it is affecting your own life more and more. Not only the climate change itself, but the taken measures and actions to reduce climate change probably even more so. This is not confined to the political level but is everyday’s business among consumers, businesses, entire industries and countries. As a result, sustainable living and sustainable enterprise, also referred to as 'corporate social responsibility' (CSR), are becoming increasingly important. It is becoming essential for companies to start doing business in a sustainable way. This has several factors.
First of all, it is demanded by the consumer. Choices for a certain product are increasingly influenced by the extent to which the company in question operates a sustainable business. Secondly, it is demanded by the industry/competition. More and more consumers are making considerations for a certain brand (partially) based on the degree of sustainability. Logically, an increasing amount of companies are trying to meet today’s sustainability standards. If you, as a company, do not go along with this, the customer will increasingly opt for the competitor.
Finally, more and more political rules and measures are being imposed around sustainable entrepreneurship.
In brief, companies have to respond to sustainable entrepreneurship. However, this raises the question: "Are companies becoming more sustainable because they want to save the world, or is it mainly a marketing technical/branding consideration?
In this article, each of the above factors will be explained. In doing so, attention will be paid to the effect this has on companies.treamer here
︎︎︎CLAUDIA ROERDINK / SOCIETY
What does the consumer want?Although value and ease of purchase are still the most important factors in purchasing decisions, sustainability is starting to play an increasingly important role (Gallop, 2020).
For example, it appears that consumers find companies more sympathetic (76%) if they actually contribute to a sustainable world. In addition, around 33% indicate that they are more likely to make a purchase if the brand in question is committed to sustainability (Consumenten kritisch over duurzaamheid bij bedrijven, 2019). This is also stated by Gallop, 2020; "Consumers - particularly Millennials - are increasingly looking at brands that embrace purpose and sustainability, and are more attuned to the environmental impact of their purchases". However, only 29% of consumers think that companies actually do this. "More than four out of ten consumers indicate that they distrust sustainability claims and are fed up with advertising about sustainability (Consumenten kritisch over duurzaamheid bij bedrijven, 2019)”. This is also due to the fact that companies are presenting themselves as more ‘green’ then they really are to win over consumers and improve their social image. This is called greenwashing.
In addition, research suggests that 'purpose' is not necessarily the factor that causes consumers to make a purchase (Revet, 2019). Although the majority indicate that they would like brands/companies to be sustainable and socially responsible, only a small percentage of these consumers actually make a purchase because of a certain sustainability policy. Therefore, on the one hand, there is a growing demand from consumers for sustainable products and companies, but on the other hand, it is not necessarily the decisive factor when considering a possible purchase. In addition, many consumers distrust the sincerity and intention of companies when it comes to sustainable entrepreneurship. CR6]
All things considered, being a sustainable brand is crucial nowadays. Not only because of the climate impact, but also to accommodate the changing way in which consumers rethink brands and make purchases on that basis.
"More than four out of ten consumers indicate that they distrust sustainability claims and are fed up with advertising about sustainability”.
Leading, following or lagging behind.
As has just been discussed, it is becoming increasingly important for consumers that companies are committed to sustainability.
In fact, the consideration (to purchase) for a certain brand/company is increasingly dependent on the perceived degree of sustainability within that company. Having said that, it is therefore important for brands to respond to this. This trend has been going on for years and some brands have recognized this earlier and responded to it more effectively than others.
This ensures that certain companies are ahead of the curve, but also that other companies are lagging behind.
A good comment to make here is that it is often very difficult for established, older companies to make their existing business model and internal processes completely sustainable. This is because, for example, they already have existing factories, suppliers and working methods. If this is made more sustainable, the entire working method will often have to be changed.
In addition, research shows that for established companies with a strong reputation, relatively little (extra) profit can be achieved when the social goals are emphasized. This is particularly a good strategy for market challengers to enter the market (Revet, 2019).
For example; Tony's Chocolonely and Vegan shoe brands (Veja).
Because these types of companies are built up from 0, they can make CSR-oriented decisions during all reviews instead of changing everything afterwards.
Political influenceThe reconsiderations made by companies about CSR are not only intrinsic. In fact, more and more measures are being imposed by politicians concerning, for example, CO2-neutral business operations. This forces companies to cooperate, even though they might not have done so of their own accord.
An important example of this is the climate agreement. This is an agreement in which all kinds of plans are set out for a sustainable world, with the aim of 'limiting global warming to well below 2 degrees Celsius'. With a clear view of 1.5 degrees Celsius (Ministerie van infrastructuur en waterstaat, 2020).’ Because of this, companies are extrinsically influenced to work internally on a more sustainable company.
Unfortunately some companies choose not to move towards a more sustainable business model. Or even worse, choose for greenwashing. Which makes political influence necessary.
“And at the end of the day, all that matters is that companies set sustainable goals and follow up on those goals”.
In this article, it has become clear that corporations simply cannot get around CSR any more. Whether it is because the consumers are demanding it, they don't want to lag behind their competitors or because new rules and regulations force them, companies are becoming increasingly looked upon regarding CSR. Some companies try to make an easy buck by greenwashing and portraying their business model/product more sustainable/green then it really is. With this method they try to fool the consumer and make more money. Luckily, this trend isn’t going unnoticed and the companies are getting exposed (Truthinadvertising.org, 2020).
Of course it is not all fake and bad, there are a lot of companies who exactly want to make a difference and try to do so with their business. As previously explained, these are mostly young companies. They revolve their entire business model around a certain sustainability/social goal. And whether or not they do this because they saw an untapped market, or because they genuinely want to make a change, they exactly do the things they say. And at the end of the day, all that matters is that companies set sustainable goals and follow up on those goals.
So, when considering a certain brand, try to look a little further than their ‘big promises’ about sustainability. They are still companies and for some companies the only goal is to make more money.