“There is no passion to be found playing small – in settling for a life that is less than the one you are capable of living.” – Nelson Mandela
Consumers today want more. They want to do more, change more and be more active in making the world a better place. They want to do good things themselves, and support companies – big, small and in between – that demonstrate strong ethics and stewardship of human beings and the planet.
In fact, according to the Ethical Consumer US report of 2015 by Mintel, more than 63% of consumers feel that ethical issues are becoming more important. And consumers are strongly supporting businesses that incorporate meaningful values into their core business.
This desire to make a positive impact translates into a key concept in today’s business world: sustainability. Sustainability as a business strategy is becoming increasingly appealing to managers, executives and business owners, and more businesses and organizations are driving change – and success – with sustainable business goals.
Here, we’ll take a close look at sustainability and how it plays out as a strategy for both business and marketing. What do sustainable businesses look like? And how can sustainable marketing help those businesses succeed?
Sustainability in business is the ability of an organization to thrive over time in a way that protects and replenishes resources.
Although the concept may seem new, sustainability has actually been around for decades. The modern-day concept of sustainability was developed from the World Commission on Environment and Development, an organization launched by the United Nations in 1983. The Commission was led by Norwegian Prime Minister Gro Brundtland, and thus became known as the Brundtland Commission.
After four years of work, the Commission concluded that government and industry needed to practice more environmental and social responsibility. The term sustainable development was coined and defined as:
Development that meets the needs of the present without compromising the ability of future generations to meet their own needs
Since then, sustainability in business has driven value. Harvard Business Review reports that companies that have sustainable business practices experience greater risk management, more innovation and better financial performance, including larger profits, more cost savings and improved efficiencies and logistics. Moreover, sustainable businesses benefit from improved customer loyalty.
According to the Clarkston Consulting 2014 Corporate Sustainability Trends Report, “sustainability has emerged to a prominent position in corporate and consumer consciences.”
Among the consumers who are noticing the movement toward sustainability are millennials, who now boast $2.45 trillion in spending power. Forbes reports millennials not only have money to spend, they care where they spend it: roughly 70% will pay more for brands that support a cause they care about.
As the purchasing power of millennials increases and the population of conscientious consumers continues to grow, authentically sustainable, purpose-driven brands and the people-planet-profit model are winning across the board – economically and socially.
A primary sustainability strategy is the triple bottom line. Developed by entrepreneur John Elkington, this approach is about finding opportunities to build competitive advantage across three areas of an organization:
A crucial element of this approach is to broaden the consideration of stakeholders beyond shareholders to all groups that have interest in and are impacted by the organization.
Throughout the years, there have been several new movements in the pursuit of sustainability, in addition to the Triple Bottom Line.
Conscious Capitalism encourages businesses that are, according to The Conscious Capitalist Credo, “galvanized by higher purposes that serve and align the interest of all their major stakeholders.” This movement calls on the power of business and capitalism to cultivate compassion, freedom and prosperity to make our lives more purposeful.
Similarly, the movement of B Corps is advancing. B Corps are businesses that have been certified by the nonprofit B Lab to meet rigorous standards of performance in areas of social and environmental impact. Inc. Magazine regards B Corp certification as “the highest standard for socially responsible business.”
Sustainable business strategies require a level of systems thinking that can only be accomplished by bringing together people across the spectrum of an organization's operations. Such cross-functional teams can provide different views of an organization's opportunities, strengths and weaknesses for a whole-system perspective into sustainability outcomes.
Several companies have embraced best practices of sustainable business with success. Patagonia and Interface are two that have created sustainable solutions while differentiating their brands and winning consumer loyalty.
Patagonia founder Yves Chouinard brought his love of outdoors, concern for the planet and passion for sports together in a company that supplies the world’s top climbers, fishermen, surfers and outdoor enthusiasts with high-quality gear. To be successful and profitable, the company has built its mission on sustainable sourcing, supply chain innovation and valuing relationships with vendors, customers and stakeholders.
After starting his business in the 1970s, carpet manufacturer Ray Anderson realized it was contributing to pollution, and he challenged his company to make carpet sustainably. In a major mid-course correction, Interface reinvented nearly every aspect of its business based on the Mission Zero goal of zero impact on the planet. With their new mission, Climate Take Back,™ the business is committed to creating a climate fit for life while calling on others to do the same.
As the consciousness of sustainability has made its way into the mainstream of business strategies, a new paradigm of marketing is emerging with it.
Sustainable marketing is a critical part of operating a sustainable business. But what does the term sustainable marketing really mean?
Sustainable is the ability of a system to maintain or renew itself perpetually. It can also mean: conserving an ecological balance by avoiding depletion of natural resources.
The term sustainable has branched into sustainable development and sustainable business, setting the stage for sustainability to become a key indicator of an organization’s success.
"In recent years, sustainability has been recast as a broader concept encompassing the social, economic, environmental, and cultural systems needed to sustain any organization. A sustainable organization, and similarly a sustainable person, is prepared to thrive today and tomorrow.” – Adam Warbach, author of Strategy for Sustainability: A Business Manifesto
The American Marketing Association’s definition of marketing is comprehensive, and works well toward building the definition of sustainable marketing as a multiple stakeholder approach:
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.
In our rapidly accelerating digital age, business leaders often lose sight of the three core functions that are needed to create value:
All of these functions are needed to build value. Without any one of them, an organization is likely to fail.
“[Sustainable marketing is the] process of creating, communicating and delivering value to customers in such a way that both natural (resources nature provides) and human (resources people provide) capital are preserved or enhanced throughout.”
Believing that marketing has “great potential as a force for creating cultural change,” Martin and Schouten set out to illustrate that marketing has two imperatives: to market sustainably and to market sustainability.
Market sustainably is an inward practice that ensures all marketing processes are environmentally and socially benign.
Market sustainability is an outward practice that helps bring about a society in which striving for sustainability is the norm.
A good way to practice sustainable marketing is to be committed to honesty in marketing messaging and sustainability claims.
Marketing efforts to make an organization stand out in the marketplace are part of any marketing strategy.
Green marketing means marketing the sustainability efforts of a company to a target audience, as in what a marketing agency might do for Patagonia or Interface. Another example is Starbucks' creation of marketing assets that incorporate sustainability messages (such as the company's fair trade sourcing or sustainable agriculture practices). Like regular marketing, green marketing simply involves executing tactics driven by a marketing strategy.
Green washing is what happens when a brand makes sustainability claims in their marketing messaging that they can't back up in operations.
A well-known example of green washing is illustrated by the the Volkswagen emissions scandal. Beginning in 2009, VW sought to dominate the diesel car market in the U.S. A huge marketing campaign was created to tout it cars' low emissions.
Eventually, the Environmental Protection Agency found that Volkswagen had intentionally programmed the diesel engines to activate their emissions controls only during emissions testing. This allowed the vehicles’ nitrogen oxide (NOx) output to meet U.S. standards during regulatory testing, but emit up to 40 times more NOx with routine driving.
Volkswagen deployed this programming software in eleven million cars worldwide, in model years 2009 through 2015.
As this scandal went public, Volkswagen's stock prices fell, and its executives resigned or were suspended. The Volkwagen Group spent almost $20 billion to fix the issue and conduct a recall program. The 2009 Volkswagen Jetta Diesel Sedan was named “Green Car of the Year” by Green Car Journal; in October 2015 that award was rescinded.
Before there was sustainable marketing, there was unsustainable marketing. Unsustainable marketing began with the mass production of the Industrial Revolution. Marketing was hyper-focused on supply and demand and was carried out at a pace directly linked to unsustainable use of non-renewable and renewable resources. This was tied to increases in pollution, debt, illnesses related to the environment and other negative impacts on individuals and society.
Green washing is considered an unsustainable marketing practice, as it is harmful to consumers and society to make false claims about a product or service.
The next generation brought more unsustainable marketing with aggressive sales and advertising tactics among competitors, which resulted in a "buyer beware" mentality. Consumers began to develop distrust of marketing and sales.
Since then, marketing has turned to focus more on the needs and wants of the customer. Brands have shifted strategy to develop more of a two-way relationship with consumers.
In turn, consumers not only expect brands to behave ethically, they also demand that brands align with their own value-led lives.
Lynda Resnic, the brand mastermind behind Fuji Water and Franklin Mint, wrote in Rubies in the Orchard that a sustainable marketing function is created when there is a coherent business culture, where everyone is pulling in the same direction, digging deep to find value and being truthful in communicating that value to consumers.
This can result in shared objectives for marketing and sustainability. Marketing can then incorporate these objectives and sustainability principles into the marketing strategy.
Incorporate sustainability objectives and practices
When implemented properly, sustainable marketing can lead to outcomes such as:
For business owners who care about creating a sustainable world, the powerful tool of sustainable marketing can both enhance connections with conscientious consumers and drive success across the triple bottom line.
For consumers, sustainable marketing educates and empowers them about ways to support businesses and nonprofits that share their vision of changing the world for the better.
Sustainable marketing, when done authentically, brings consumers and companies together toward shared goals and success, both now and into the future. And that’s ultimately what sustainability is all about.
To learn more about how Yodelpop implements sustainable marketing strategies for businesses and non-profits, schedule a consultation today.