Corporate sustainability has come a long way in the last decade, with many of the most successful businesses, both large and small, implementing sustainability strategies.
These strategies have evolved beyond environmental initiatives such as recycling and planting trees and are starting to stretch more broadly into how business has the potential to positively impact people, communities and the local and global economy.
These strategies reflect the expanded landscape of people’s interests, which have come a long way from the early fringe culture of the green movement. Culture is not a ‘thing’ – it is a moving and evolving thought process, like a river carving its way through the landscape changing shape, speed and colour and spinning off eddies and sometimes creating lakes that get cut off from the main flow. Marketing has to match this fluidity, and the good companies operate downstream at the forefront of the evolving cultural movement. Companies stuck thinking of the sustainability movement as ‘fringe’ or just for those who can afford to buy organic produce as a social badge, risk being left behind by this growing cultural force.
Growing up – a mature approach to sustainability
Companies throughout New Zealand are increasingly adopting sustainability strategies driven by a groundswell of consumer expectations and we’ve seen recently that many New Zealand businesses have moved from being reactionary to acting proactively in this field. No longer is there the sense that businesses are simply complying with the sustain- ability movement out of fear of being ‘found out’ for not doing their part. A newfound focus on the greater good is clearly evident.
New Zealand Post is one of these organisations. Building on their tremendous success in waste and emissions reductions, in 2012 New Zealand Post expanded their sustainability programme to support growing social enterprise in New Zealand.
Air New Zealand is another key kiwi organisation with a comprehensive sustainability strategy – “Supercharging New Zealand’s success socially, environmentally and economi- cally”. Core to the strategy is the recognition that New Zealand’s success as a country is intrinsically linked to the success of Air New Zealand as a business. As one of the country’s largest employers, engaging with their staff was a way of getting valuable ideas and input as well as a commitment from a large group of people to support and contribute to the programme. Yes, some of the ideas suggested were not necessarily mainstream (though great seeds of inspiration for future innovation), but overall what they saw was employees’ common passions and what they cared about, enabling Air New Zealand to design a programme that was relevant and would gain traction.
Sustainability is part of our culture
Shifting consumer behaviour and desires have heavily influenced business’ newfound mature approach to sustainability. If we consider for a moment the meaning of sustainability in a business context, the word has broken free from the previous generation of buzzwords: think ‘green’, ‘environmentally friendly’ and ‘recyclable goods’. It now encompasses a more holistic meaning, taking into account all elements of the world in which businesses operate – social and economic, as well as the environment.
Although sustainability is a global movement, every country has a unique context which influences the way this movement evolves. For example, New Zealanders have traditionally had a high regard for the natural resources of their country: we love to fish and have long-standing fishing quotas, and we have a high percentage of reusable energy.
These things influence how the global cultural trend of sustainable thinking has developed in New Zealand versus how it might develop in a different nation. National influence also extends to sustainable activity that affects all facets of the lives of New Zealanders and the things they treasure – clean water and national parks but also a fair society and economic success to future-proof the economy and punch above our weight in the world.
As an insights agency we speak to thousands of people each year, and we consistently hear and feel a sense of ‘things can’t go on the same way or our kids won’t have what we have’. We hear it when we work in markets where you might expect to, such as utilities, but we also hear it across all markets and sectors from FMCG to tourism, from business services to retail. Listening to people’s interpretation of the cultural current allows us to apply a relevant New Zealand approach to sustainability strategies.
People are becoming increasingly concerned with supply chains, a company’s organisational values, its charitable contributions and how much an organisation gives back to the community. As a prime example we’ve seen the recent success of brands with sustainable stories ingrained into the makeup of the organisation – think Eat My Lunch, All Birds shoes, Snowberry skincare, Eco Store cleaning products, Ten Tree clothing and TOMS shoes. These brands are amplifying people’s interest in sustainability and raising their expectations of other businesses, taking the view that “if they can do it and be successful, why can’t all businesses do it?”
These changes reflect the society we now live in – more connected, more discerning and more exposed to options and choice. No longer is sustainability demanded by a niche few consumers who are looking for green or environmentally friendly products; it has become an expectation in our culture and society.
This expectation has had an impact on decision-making and purchase behaviour, particularly when it comes to the willingness to pay more for products that are sustainable. A reluctance to pay for brands that are failing in this area has emerged – for example Nike, whose labour sourcing controversy was well broadcast a few years back – when there is a competitor with a more sustainable supply chain, even if it does charge a higher premium for its products.
Millennials are one driving force behind the sustainability movement. In TRA’s recent 'Listening Project: Millennials' it became clear that sustainable brands are the ones Millennials admire and aspire to purchase. Millennials, like everyone else, still look to brands to make their lives easier, but they actively seek those that mirror their values and make them feel good about their purchase due to the sustainable stance of the company.
And building on this sustainability evolution, many companies are now looking at how authenticity can help drive even greater consumer and employee engagement with their sustainability initiatives.
Authenticity: you can’t just say it, you have to do it
When it comes to the most successful global brands authenticity is a key ingredient, amplified by the exposure of social media and a transparent information flow between the business and its customers.
Authenticity has a proven positive impact on an organisation’s bottom line. According to a global study by Cohn & Wolfe in 2014, 63 percent of consumers are more willing to buy from a company they consider to be authentic over a competitor. And we find that authenticity is especially important to corporate sustainability. Increasingly, sustainability agendas must go beyond stamps and accreditations and showcase real evidence of what the business actually does.
The UK’s Marks & Spencer recently made the decision to publish its supplier sourcing maps for the factories it uses, giving away potentially commercially sensitive information and inviting scrutiny. But with the company’s strong belief in the importance of being transparent and desire to tell the unique stories of its factories and the communities they support, they felt that telling the authentic truth was worth the risk.
Part of this authentic approach is adding the important human element to sustainability. Making sustainability real, personal and tangible to employees, customers and wider stakeholder groups is challenging. Carbon offsetting strategies, investing in bio-fuels or selecting sustainable suppliers can only involve so many employees or a handful of experts. To get engagement across the board, authentic actions that are emotionally fulfilling are key.
We mentioned earlier that an important part of Air New Zealand’s sustainability strategy was listening to what really motivates employees in the sustainability space. It was clear for Air New Zealand that there was a real desire among employees to be involved. Employees had a clear emotional connection to sustainability rather than just a functional one, so it was important that the company involve them on the journey and incorporate their insights when it came to formulating its sustainability strategy.
Sustainability is not a team or a strategy, it needs to be a mindset
We find that sustainability and commercial goals cannot be two separate things. The true value lies in linking the two and focusing on a common commercial outcome. This means sustainability must be seamlessly integrated into business planning, across teams, people, departments and countries. There’s already a handful of companies leading the way in this respect. For example, Marks & Spencer has a goal that by the year 2020 every department from men’s trousers to ready-to-eat meals will have a sustainability plan and goal.
Businesses are seeing clear results from this authentic sustainability mindset. Unilever’s Global VP Sustainable Business, Karen Hamilton, has said, “sustainability deepens brand equity, drives sales and inspires innovation.”
And the good news is, sustainability initiatives don’t necessarily need to drive cost into the business. In fact, sustainability has the power to reduce costs, drive innovation and create real benefits for people. In Europe, O2 has used its sustainability mindset as a catalyst for innovation – developing products and services that not only meet business sustainability objectives but also drive commercial return in the form of value added products and services: “The biggest opportunities come when sustainability thinking leads you to a powerful customer insight. This insight enables you to build innovative products.”
Closer to home, Air New Zealand has transformed its loyalty programme into a vehicle for wider good, launching a pro- gramme that allows members to donate Airpoints DollarsTM to school fundraising initiatives and thus creating sustainable value exchange between Air New Zealand, its customers and the wider community. The development of this initiative was informed by Air New Zealand’s “Supercharge New Zealand’s Success” employee co-creation sessions, which identified inspiring young New Zealanders and world class knowledge sharing as priority themes, among others.
The power of sustainability is realised when it all comes together
As the cultural shift towards sustainability continues to grow, expand and evolve, those companies that can successfully integrate sustainability into all elements of their business will be in a strong position to capitalise on the evolving cultural currents swirling and gaining momentum in this area. As this movement grows, it will pull in wider applications and issues, so companies need to pay close attention to the subtle clues suggesting when these shifts are taking place. The audience is growing in sophistication too, knowledge and enthusiasm is replacing cynicism and there is real potential for businesses to make a crucial emotional connection with people through sustainability.
The paths of sustainability and commercial objectives need to be authentic, and brands need to demonstrate that authenticity by what they do and how they behave. We are seeing real engagement from customers and employees when organisations operate with a purpose greater than the company itself.