What is sustainability at your company? A laundry list of generic social and environmental initiatives, or a powerful driver of brand goals?
Corporate sustainability can be much more than reducing carbon or water footprint. More than LEED and ISO-14001 certification. More than philanthropy and cause marketing… or reduced packaging… or a greener and more accountable supply chain.
These are items found in the sustainability section of just about any company website, usually generated out of a desire to cut costs, reduce risk, or demonstrate a level of corporate citizenship. A solid sustainability strategy may sit at the corporate level, and the company may be lauded in the press for its sustainability efforts. Yet if sustainability isn’t activated at the brand level in an authentic, differentiated way, you are likely to lose competitive advantage over time.
As a brand owner, why should I care?
For large, mass-market brands, the common objection is that consumer demand isn’t sufficient to justify the time and resources to give sustainability much thought. And in many cases, that’s exactly right. According to our US research, only 19% are actively seeking green in their purchase decisions, while 25% are actively turned off by any mention of sustainability. Most of the population falls somewhere in between. (I’ll write about the global opportunity in a future post.)
Yet there are plenty of incentives for any brand owner to be keenly interested in sustainability that have nothing to do with current market demand. Demand will be generated from competitive, NGO, distribution and government pressures, not vice versa. If you’re not actively figuring out how your brand is going to play in this space, you’ll show up late to the party and be ill-prepared to tell a relevant, credible story. Why?
- If you’re a manufacturer, then you know that Walmart and other leading retailers are asking for sustainability metrics at the SKU level; eventually retailers will serve as consumer guides in the world of sustainability, editing products to meet their standards and publicizing their own supplier scorecards.
- As a marketer, you know that social media is magnifying the voices of active consumers wanting to see greater sustainability commitments from corporations.
- Third-party rating systems like GoodGuide.com are emerging whether you want to participate or not, reaching your consumers with a “peek behind the curtain” on your products and your company.
- Consumer interest in topics like fair trade or deforestation is increasing with news coverage and NGO campaigns.
- Increased government regulation is anticipated across a spectrum of industries.
Bottom line: the sustainability trend is gaining momentum, and building credibility in sustainability takes time… years of time. If you want to be ready to dial up sustainability in your brand, products, services and experiences in the next 3, 5, 10 years when the market is expecting it, now is the time to start defining what sustainability means in context of your brand.
“Skate to where the puck is going to be, not where it has been.” – Wayne Gretzky
Decoupling brand from marketing
To activate sustainability at the brand level, you must first decouple “brand” from “marketing.” More than a logo, tagline or campaign, brand is the sum total of the company’s or product’s user experience (how you show up in the market) plus the perceptions that your stakeholders have of your brand. You might say that “brand” is the connective tissue between your company and the market.
So if you are a CMO, VP Marketing, Brand Manager, etc., you should be just as responsible for your brand’s actions (current and planned) as well as its voice. If you sell in China, you should be familiar with facilities management as Chinese consumers prioritize product safety. If you work for a retailer or manufacturer, you should be thinking about how supply chain, viewed through the lens of sustainability, could become a competitive differentiator. And while we’re on the subject of competitive differentiation, are you thinking about how your corporate sustainability initiatives could be transformed into an initiative brand (like GE’s Ecomagination or Marks & Spencer’s Plan A)? We’re just scratching the tip of the iceberg here. Alas, the silo structure, division of labor and your own time constraints often makes this a challenging proposition, but you should still be a strong influencer internally on key areas that will ultimately impact your brand’s reputation and revenue for the long term.
Four questions every brand owner should ask
Many brand owners take an ad-hoc approach to sustainability, torn between a desire to capitalize on the green trend and legitimate fears of greenwashing claims or of going “off-brand.” The ad-hoc approach might take the form of a consumer-friendly green microsite, a retail promotion, a green packaging initiative, or a Facebook campaign. Maybe you launch a greener product to counter a competitor’s move.
But let’s back up for a second. These are tactics… what is the strategy? Regardless of current market conditions or “green” opportunity, every brand owner should be asking four questions:
- What does sustainability mean within the context of my brand… today and 5 – 10 years from now?
- What role should it play given my target audience and market dynamics? Should we be a leader or follower given our culture?
- Do we have the credibility and relevant proof points required to avoid greenwashing claims? Will we in the future based on our current strategy?
- How should it manifest in the brand portfolio, positioning and customer experience based on the above analysis, and what initiatives should be prioritized?
Let’s look at each of these questions in more detail.
- Definition: Sustainability encompasses both social and environmental components. You may want to dial up just one, or both, depending on your brand and business. How are you going to define sustainability in a way that is relevant, authentic and helps deliver on your overall brand promise?
- Role – Market Facing: Based on your target audience, sustainability can take one of the following roles:
- Green behind the scenes — not overtly visible to consumers but you have a strong story for those who want it. Walmart is a good example of this.
- Green in a supporting role – Sustainability appears as a proof point for your brand in products, services and experiences, yet is not the dominant promise. For example, P&G’s Future Friendly initiative brand is a selling point, but Tide and other P&G product brands are not repositioning themselves to focus on green.
- Green in a starring role – Sustainability is the core promise for the brand and appears throughout all touchpoints. This is the realm of traditionally green brands like Tom’s of Maine, Seventh Generation, etc.
- Role – Internal: Do you want to be a leader or follower in your industry? This is largely determined by your internal culture and the mindset of your executives. It depends on the level to which innovative thinking is encouraged, and whether your company is willing to invest in long-term transformation of categories and markets. Someone’s going to lead your category (if they’re not already) and the leaders will define the baseline expectations and the playing field for the followers. If you’re going to follow, you should know the tablestakes areas of sustainability that you must be improving to ensure your brand isn’t put at risk.
- Interface Flor is a great example of a company taking a leadership role in sustainability, exploring new business models and pushing to change how carpet is made, sold and reclaimed.
- In the consumer arena, Burt’s Bees worked with other natural competitors to develop their own certification called The Natural Standard, which benefits themselves while casting mass-market competitors in a negative light.
- Credibility: This is absolutely critical for you as a brand owner to understand the level of credibility your brand brings to the table. In our Sustainable Brand model, sustainability must never show up more visibly than you have the credibility to support it. So even if your market isn’t demanding it today, you should be pushing internally to build a competitive level of credibility for tomorrow.
- Manifestation: Think of this in terms of a roadmap. Given the above answers, what are the things MUST you start doing in order for sustainability to show up in a relevant, unique way over the next 5 years? What must you STOP doing? Initiatives should be prioritized in terms of 1) removing risk, 2) capturing competitive opportunity, and lastly, 3) innovation and transformation.
So instead of passively waiting for operations to come up with something “green” you can try to talk about, why not actively drive a pipeline of on-brand strategic sustainability initiatives to support your retention and acquisition goals?
If you’re interested in learning more about our audit and 6-step process for Building the Credible Sustainable Brand, please contact Jennifer Rice at jennifer at fruitfulstrategy.com. We’ll help you benchmark your brand against competitors, determine your brand’s definition/roles/vision for sustainability, and help you close the credibility gaps.