Sustainability: everybody talks about it, but few actually practise what they preach.
It’s a massive challenge for every company on the planet. Brands are having to revolutionise their products and processes in order to reduce the environmental and social impact of their businesses, but it’s not always easy for mere consumers to get involved.
Currently, customers – stakeholders in and citizens of a world that is becoming increasingly polluted as a result of bad production and consumption habits – are being forced to pay over the odds in order to go green. People are having to invest their resources to reward the more virtuous companies, while overlooking companies that are less attentive to environmental issues (despite them become easier on the wallet).
Not exactly a bargain.
Sustainability: the right choice for 55% of consumers
And yet customers are happy to do it. According to a study by Nielsen involving 30,000 people in 60 countries around the world, around 55% of consumers (a figure that has increased by 22% over the past three years) are happy to pay the price for sustainability.
This receptiveness translates into a desire to spend more to acquire products and services from companies that truly care about the state of communities, workers and the environment and take active steps to giving something back to society.
Ultimately, sustainability has become a conscious choice, particularly for millennials, 75% of whom are alert to environmental and social issues. Meanwhile, in Asia Pacific, Latin America, Africa and the Middle East, 64% of individuals are interested in responsible consumption. Why? Because it is in these areas that these issues are of the greatest relevance and here that the consequences of socioeconomic inequalities, environmental crises and low wages (specially after 2008 financial crisis) are most tangible.
Sustainability makes sense
So what of companies? Many have finally acknowledged the true potential of the sustainability phenomenon – and are duly changing their plans as a result.
According to the 2018 Global Sustainability Index Institute Report, which analyses 400 big companies from around the world, the importance of the Sustainable Development Goals – a set of measures created and promoted by the UN – has doubled within corporate strategies.
Have companies suddenly become much more sensitive to issues such as climate change, gender equality and the responsible use of resources? Probably not, but they have realised – through their profits – that sustainability makes sense and that operating according to green principles boosts consumption, increases revenue, improves brand reputation and has a huge influence on brand image.
And at the same time, it’s an approach that reduces the risks linked to conventional business management, which values consumerism and overlooks the human and environmental impact of their business.
So, more than a challenge, sustainability is a huge opportunity for companies.
The real challenge will involve the financial system, institutions and the macro-economic environment. These three areas will need to converge and find common ground in order to lay the foundations for sustainable growth models.
Ultimately, the critical factor will be time. Companies will need to hit these targets within the next ten years – or risk being edged out of the market completely.