In continuation of our series on impactful brand strategies, and following Personalisation at Scale, let’s explore the next component: Sustainability and Ethical Practices. We teach our clients that understanding the customer journey in developing strategy involves understanding the of your target audience.
Consumers are increasingly aware of the environmental and ethical impact of their purchases, influencing brands to prioritise sustainability and transparency. 93% of global respondents said the pandemic had influenced their views on sustainability according to a report from the IBM Institute for Business Value (IBV). Eco-conscious brands are securing lasting loyalty and carving out a unique position in crowded markets. The shift towards conscious consumerism is undeniable, and as brands navigate this change in consumer consciousness, the importance of integrating sustainable and ethical practices into their core strategies has never been more critical.
The Rise of Conscious Consumerism
Over the past decade, there has been a marked shift in consumer behaviour, driven by growing awareness of global environmental challenges and the ethical implications of production practices. Research from Harvard Business Review reveals that 65% of consumers want to buy purpose-driven brands that advocate sustainability . In his latest co-authored book, Marketing 4.0, Philip Kotler emphasises the urgent need to transform marketing practices toward a more human-centric approach. The focus, he argues, should shift towards building customer loyalty by deeply connecting with their values and needs. He notes, “Marketing’s job today is to sell materialism and consumption. Tomorrow’s marketing will be fundamentally different.” This shift is not just a passing trend but a fundamental change in how consumers view their purchasing decisions.
Sustainable marketing involves socially and environmentally responsible practices that address current consumer and business needs while safeguarding future generations’ ability to meet their needs. Unlike traditional marketing, which often focuses on immediate consumer satisfaction, sustainable marketing emphasises long-term strategic planning and societal benefits. Traditional marketing faces criticism for contributing to high prices due to distribution costs, excessive advertising, and deceptive practices.
Additional critiques include high-pressure sales tactics, poor product quality, planned obsolescence, and inadequate service to disadvantaged consumers. Marketing’s broader societal impact includes fostering materialism, cultural pollution, and prioritising private goods over public welfare. It also affects other businesses through competitive practices, acquisition of competitors, and creating barriers to market entry. How do we change, adapt or adopt?
Consumerism is a movement aimed at enhancing buyer rights and power relative to sellers, with traditional rights encompassing product safety, accurate performance claims, and informed decision-making. Environmentalism advocates for protecting and improving the living environment, promoting strategies like pollution prevention, product stewardship, and clean technology.
Sustainable marketing integrates these principles, focusing on long-term consumer and societal benefits rather than immediate satisfaction. It emphasises ethical practices, where companies prioritise both current and future customer needs while balancing profitability with environmental and social responsibility. Ethical norms such as honesty, fairness, and transparency guide these practices.
Additional Reading:
The Comprehensive Business Case for Sustainability by Tensie Whelan and Carly Fink. https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability
The Business Case for Sustainability
Procter & Gamble faced losing market share to eco-friendly competitors like Kimberly-Clark. The maker of Tide and Crest struggled to maintain its dominance in key categories such as skin care, razor blades, and laundry detergent, as sustainable brands that emphasise natural and environmentally conscious products increasing appeal to consumers. Despite being the world’s largest consumer-products company, it lacked the maverick appeal of these newer, more purpose-driven brands.
Adding to the pressure, P&G has been criticised for its unsustainable reliance on virgin forest fibre, contributing to deforestation and biodiversity loss. This criticism has intensified following a 2020 shareholder resolution urging the company to address its deforestation practices. In contrast, competitors like Unilever have made bold moves by acquiring sustainable brands such as Seventh Generation and Dollar Shave Club, and introducing more eco-friendly products. P&G’s reluctance in prioritising sustainability not only jeopardised its market position but also posed a significant threat to the environment.
As P&G’s sales in core categories slipped, the company returned to acquisition mode, with Chief Executive Officer David Taylor hinting that deals could be a strategy to bolster the company’s portfolio and appeal to younger, environmentally conscious consumers. Procter & Gamble (P&G) has embraced this shift. David stated, “Making products more eco-friendly isn’t something that can be added later; it must be integrated from the beginning.”
Beyond consumer demand, there is a strong business case for integrating sustainability into brand strategy. A study by NYU Stern’s Center for Sustainable Business found that products marketed as sustainable grew 5.6 times faster than those that were not. This data highlights the tangible impact that sustainability can have on a brand’s bottom line.
- According to a 2020 McKinsey US consumer sentiment survey, more than 60 percent of respondents said they’d pay more for a product with sustainable packaging.
- Consumers across all generations—from Baby Boomers to Gen Z—are now willing to spend more for sustainable products
- According to Gallup, close to two-thirds of U.S. adults are concerned about global warming, with 43% worrying about it “a great deal” and 22% “a fair amount.”
- There has been a 71% rise in online searches for sustainable goods globally, over the past five years.
- 90% of Gen Z consumers surveyed have bought a sustainable product in the past six months.
- 70% said they would change their shopping habits if they discovered that a store or brand wasn’t operating sustainably.
Additional Reading:
The Rise of Environmentally Conscious Consumers: CX Reimagined for Sustainability: https://execsintheknow.com/magazines/july-2023-issue/the-rise-of-environmentally-conscious-consumers-cx-reimagined-for-sustainability/
2020 Nielsen Global Responsibility Report: https://microsites.nielsen.com/globalresponsibilityreport/wp-content/uploads/sites/12/2020/09/Copy-of-200709-create-pdf-of-2020-nielsen-global-responsibility-report-d03.pdf
Moreover, brands that commit to sustainability often see enhanced brand loyalty. According to Nielsen, among the 66% of global respondents willing to pay more, over 50% of them are influenced by key sustainability factors, such as a product being made from fresh, natural and/or organic ingredients (69%), a company being environmentally friendly (58%), and company being known for its commitment to social value (56%). This willingness to support brands that prioritise ethical practices demonstrates the deep connection between sustainability and consumer trust.
“Sustainability is no longer about doing less harm. It’s about doing more good.” Jochen Zeitz, CEO of Harley-Davidson Motor Company and former CEO of PUMA Group.
Transparency: The Key to Trust
“In a world where information is freely available, transparency is the most valuable currency a brand can possess,” says Simon Sinek, author of Start With Why.
As brands adopt more sustainable practices, transparency becomes essential. Consumers today have unprecedented access to information and are more sceptical of green-washing. This is where companies falsely promote environmentally friendly practices without substantial backing. To build trust, brands must be transparent about their supply chains, sourcing practices, and the impact of their operations.
Transparency doesn’t just mitigate the risk of backlash; it actively builds consumer trust. A study published in the Journal of Business Ethics found that transparency in ethical sourcing significantly boosts consumer trust and increases purchase intentions. This trust translates into brand loyalty, as consumers are more likely to stick with brands that align with their values.
Leading by Example: Brands Getting It Right
Several brands have successfully integrated sustainability and ethical practices into their core strategies, setting examples for others to follow.
Patagonia: Known for its commitment to environmental sustainability, Patagonia has long been a leader in ethical practices. The brand’s “Worn Wear” program, which encourages customers to repair and reuse their gear, exemplifies how a commitment to sustainability can be woven into every aspect of a business model.
Unilever: With its Sustainable Living Plan, Unilever has made significant strides in reducing its environmental footprint and improving the well-being of communities. The company’s focus on transparency and sustainability has not only improved its reputation but also driven growth.
IKEA: IKEA’s People & Planet Positive strategy focuses on sustainable sourcing, renewable energy, and waste reduction. By making sustainability an integral part of its business, IKEA has gained the trust and loyalty of environmentally conscious consumers.
Moving Forward: Integrating Sustainability into Your Brand Strategy
So now that we have made the case on how to thrive in today’s market, integrating sustainability and ethical practices is a key element of your brand strategy.
Leadership must shift from focusing on resilience to embracing regeneration—a proactive strategy that harmonises business with social and environmental systems according to the World Economic Forum. Regenerative leaders prioritise continuous evolution, self-awareness, and agility, making bold decisions that allow their teams to thrive rather than just survive. By fostering an environment open to new ideas and constant adaptation, brands can not only stay ahead of the curve but also empower their teams to flourish in a rapidly changing world.
To make change we must take action, here are some actionable steps:
- Assess Your Impact: Start by conducting a thorough assessment of your environmental and social impact. This includes analysing your supply chain, production processes, and product life cycle.
- Set Clear Goals: Develop specific, measurable goals for sustainability. Whether it’s reducing carbon emissions, improving labour practices, or increasing transparency, clear objectives will guide your strategy and help you measure progress.
- Engage Your Stakeholders: Sustainability isn’t just a marketing tactic—it’s a collective effort. Engage your employees, suppliers, and customers in your sustainability initiatives. Their buy-in is crucial for the success of your strategy.
- Communicate Transparently: Be open about your sustainability journey, including both successes and challenges. Consumers appreciate honesty and are more likely to support brands that are transparent about their efforts.
- Innovate Continuously: The landscape of sustainability is constantly evolving. Stay ahead by continuously innovating and improving your practices. This not only keeps your brand relevant but also strengthens your commitment to ethical practices.
Additional Reading:
Sustainable Development Goals Ltd THE 17 GOALS: https://sdgs.un.org/goals
As consumers become more conscious of the environmental and ethical implications of their purchases, brands prioritising sustainability and transparent practices are gaining a competitive edge. By embedding these values into the core of their operations, brands can build deeper connections with their customers, fostering loyalty and standing out from competition. The future (we live in) of branding is not just about selling products, it’s about making a positive impact on the world. Meet the expectations of today’s consumers while contributing to a more sustainable and ethical future. Let’s lead the way …together.
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About the Author:
Stefan Rampersad is a brand strategist with a passion for helping businesses and the people behind them find and live their purpose. Connect with Stefan on LinkedIn for more insights in brand, creative and digital strategy.
