20 years ago, the total size of ethical consumer markets in the UK was just £11.2bn. Today the figure stands at almost four times that at £41.1bn; the growing consumer market is a great incentive for businesses to move into the sustainability space. The long-term vision is for this market growth to deliver effective change. But this can only work when sustainability is combined with government legislation, strategic business leadership and the backing of ethically switched-on consumers.
For the sake of financial shortcuts, many business leaders side-line sustainability, seeing it as a tick box exercise in a long list of corporate social responsibility initiatives. Being sustainable is not just a growing trend, it shapes the future livelihood of industries across the board given that eco-conscious consumers now push for it. Companies such as Volkswagen have already fallen foul of greenwashing and dropping the bar in sustainability – this car giant’s scandal is just one example of what can happen if businesses take shortcuts to sustainability; litigation costs and a loss of sales are two sharp stings that companies have to square up to in the long-term.
There is no denying that committing to sustainability is a huge undertaking. It involves a huge strategic push in terms of boosting environmental, ethical or social responsibilities. Overhauling old systems and supply chains to usher in new green ones takes careful consideration.
The following considerations should be top of mind for companies planning their sustainability journey; they offer great springboards about how to start or continue successfully along a sustainability journey.
1. Sourcing material made from plastic bottles is tricky
When we think about recycling, many of us will envision mountains of plastic bottles floating about on river streams and landfills all around the world. It is no wonder then that consumers find it hard to understand why not more businesses are reusing plastic bottles in their products.
The reality is that while plastic bottles may be abundant, the raw materials needed to produce recycled products can be tough to source. This is largely owing to the fact that there are only a limited number of factories globally that have the capabilities and resources to turn these bottles into materials that can be reused.
Plastic bottles go on a long journey before they can be reused in other forms. The bottles are first shredded into small flakes which need to be re-polymerised into plastic chips. The chips then get heated and spun into yarn that is malleable and pliable. The yarn can then be stitched and sewn into a multitude of accessories – from bags to clothing, the options are near endless!
2. Manufacturing sustainably can rake in lots of cash
We often hear from retailers that sustainable product ranges are simply not profitable, given the costs associated with recycling, sourcing the materials, ensuring eco-friendly production, packaging and delivery, the list goes on… In fact, a survey by Economist Intelligence Unit (EIU) revealed that 57% of top executives believe that the benefits of efforts to achieve sustainability outweigh the costs.
But any forward-looking business will appreciate that sustainable manufacturing and operations is a long-term commitment; a mindset that can, in the long-term, result in a vast array of benefits for the business ranging from shareholder value to positive brand image – all of which do contribute to profitability.
Understanding that sustainability is a long-term commitment and not a short-term incentive is key here. Changing that mindset to think about this as committing to the future can make all the difference.
3. Credentials don’t carry weight for consumers
As retailers and manufacturers, we are all too familiar with the credentials such as Global Recycling Standard and the high standard of accountability these credentials hold businesses to when it comes to sustainable practices. These certifications are great at helping consumers and stakeholders understand that a company has undergone third-party verification to ensure it is actually walking the walk when it comes to eco-responsibility.
But do everyday consumers fully know and understand what these credentials mean? More importantly, do they care that the brand of bag or shoes they purchase adhere to these credentials and regulations?
The short answer is no. An average consumer’s purchase decisions are mainly centred around factors such as price point, practicality and brand loyalty. The onus then lies with the businesses themselves to not only ensure they are doing the part in educating consumers on these credentials but also ensuring their products are as practical as they are sustainable.
4. Companies bypass a huge market when they don’t invest in sustainability
H. Lee Scott, President and CEO of Wal-Mart said it best with “sustainability is the single biggest business opportunity of the 21st century, and will be the next source of competitive advantage.”. This quote rings true for any business today.
Too often we see companies only making changes to the way they operate when they feel threatened – but that may already be too late. Take the car industry for example. Prior to Tesla entering the playing field with its revolutionary solutions, other car manufacturers were limited in their innovative offerings. By then, however, they were too far behind.
It is the same with sustainability. Both globally and locally within the EU we are seeing policymakers and regulators taking firm steps towards raising environmental standards. As a business, the last thing you want is to be caught on the backfoot when these initiatives turn into regulations – and it’s only a matter of time before that becomes reality.
When we look at companies that have been around for a while, sustainability was not on the agenda, much less a priority. Understandably, it can be hard for these businesses to make the conscious change towards more sustainable practices, building it into every aspect of their operations.
As the demands of society evolves, any good business must and should respond with products and business models that fulfil these needs. These changing needs must be factored for within their core business strategies in order to ensure they are providing for the needs of their customer base.
5. Eco-responsibility is not just here today and gone tomorrow
Over the past couple of decades, we have seen many a fad come and go (remember the days of Google glasses?)
Sustainability is certainly not a fad and it is here to stay. In fact, over the coming years, we only expect it to further penetrate nearly every aspect of both business and consumer lifestyles.
A recent survey by Nielsen showed that 58% of consumers would pay a premium for an environmentally-friendly brand, but this number jumps significantly, up 72%, for those ages 15 to 20, the future generation.
Eco-responsibility is becoming more prevalent as it moves through the generations and we’re seeing that people are becoming increasingly conscious of their impact on the environment. Businesses have a key role in pushing sustainability forward and setting a bold precedent for going green.
As a business leader and someone able to create change, I consider it my prerogative to help grow sustainability and promote greener supply chains.