Sustainability is more than just a buzz word in marketing, it’s driven by government targets and consumer sentiment and is here to stay. But other than avoiding getting left behind and doing the right thing by the environment, what are the financial incentives in being more sustainable? And how important is sustainability to your marketing and PR efforts?
According to a study from HSBC, 86% of companies expect their sales to grow over the next year from a greater focus on sustainability. While less than half of businesses (41%) expect increased growth of up to 5% over the next year, for a sizeable minority the opportunity is far greater. More than a quarter (28%) expect sustainability to boost growth by between 5% and 10%; and one in six (17%) expect increased growth more than 10%.
Why? While pressure from external influences, including government, supply chains, and the media is mounting, the single largest influence is from consumers. For almost all businesses, purchasing trends have shifted enormously. Gone are the days of marketers simply stating a product’s benefits and revenue rolling in. Consumers now have sophisticated needs and changing trends call for a different approach.
Consumers are actively engaged in the brands that they choose to buy from. They scrutinise and analyse the company’s values and their expectations of brand integrity are extremely high. In short, a brand must not only have a clear set of values but a narrative, culture, and actions to support them.
To complicate matters, not all markets play by the same rules. For example, in China, luxury brands have grown 50% in 2020, despite massive losses in all other global markets. Why? Consumers have developed their own rules for how to access and engage with brands. These rules, which include consumers purchasing from influencers and online channels including WeChat and Weibo do not work elsewhere, globally. What works in China can damage brand equity elsewhere, so a localised strategy is essential.
So, why does sustainability matter and how can companies get all stakeholders, including investors on board?
1. Sustainability boosts growth
According to Forrester Research, companies that state they are growing say they see the greatest opportunities from improving sustainability performance. Most businesses recognise it will create short and long term commercial opportunities, boosting growth.
2. Get your marketing aligned with consumer trends
Sustainability is a big trend in the packaged goods and fashion industry as environmental concerns are increasingly top of mind for consumers. The U.S. sustainability market alone is projected to reach $150 billion in sales by the end of 2021, according to Nielsen. In Hong Kong, where White Orchid Insights (WOI) is based and serves several players in this space, there is a growing community around sustainability and the brands that genuinely and authentically operate in this space. But be careful before you state sustainable claims in your marketing. Consumers are well-informed and “green-washing” (the process of conveying a false impression or providing misleading information about how a company’s products are sustainable) will not be tolerated. This does not mean you need to stay silent on the topic if you have improvements to make in your sustainability plan. Start by defining a strategy to become more sustainable, ensure it’s fair, accurate, and transparent, and be sure to include it in your marketing and communications plans. Your customers will respect and value your honesty and effort, even if your sustainability programme is a work in progress.
3. Time to future-proof your business
Resources and waste removal will become exponentially more expensive. Businesses that have planned sustainable solutions will avoid rising costs and potential pitfalls if certain resources should become scarce. Whilst this may seem a far off reality, tax incentives and penalties are already in place for certain practices. The sooner you can future-proof your business, the better.