Sustainability is rising in importance in the complex mix of factors that go to make up brand equity. Protecting that equity will become of even greater concern in 2023, explains Stuart McMillan, senior consultant at Astound Commerce
Consumers hold brands to a high standard when it comes to sustainability and even the cost-of-living crisis will not dampen their expectations. 2022 was a record year for extreme climate events and consumers are clearer than ever about what every single degree of warming will do to the planet unless radical steps are taken to reduce it.
Brands that are seen to either not care or actively contribute to global warming are now in the firing line in the press and on social media, to the extent that consumers will now vote with their feet –and take to the streets to protest – and with their wallets – in that they may no longer buy from that brand even if it was once a favourite.
Of course, consumers worry about other things as well when choosing which brands to buy from and price, in a time of crisis, is clearly a leading factor. However, respondents to the 2021-2022 Global Risks Perception Survey from the World Economic Forum rated climate change inaction “as the risk with the potential to inflict the most damage at a global scale over the next decade.”
Gen Z consumers (born between 1997 and 2004) are the group most influenced by a brand’s stance on environmental issues (62%) and will actively use their purchasing power to advocate for climate action.
This was made abundantly clear in our recent Sustainability and your customer report, in partnership with Shopify, which surveyed 1,000 global consumers. This stance by consumers has a financial impact on brands – three out of five consumers indicate that the public position a company takes on the environment and/or climate change has had at least some impact on their decision to buy or not buy from a brand.
Sustainability must therefore be tightly woven into a brand’s proposition. And indeed, many brands are in the vanguard of how commerce will help its customers support their sustainability aspirations, as well as mitigate their own impact on the environment.
This requires brands to build authentic, transparent environmental messaging strategies. Some have a long way to go because right now, consumers are increasingly concerned that the negative impact of consumer product manufacturing—waste, high carbon emissions, single-use plastics, and so on—is unsustainable. Knowing what consumers want first is critical to building those strategies. 66% of consumers in the survey indicated that employing lower-emission shipping or using recycled packaging is at least somewhat important, led by 69% of consumers in the Middle East.
And with transparency, it’s vital to ensure actions speak louder than words, or consumers may interpret these efforts as greenwashing or conveying misleading information. The implications of greenwashing can be dire with potential reputational damage and a loss of consumer trust as a result.
Transparency should extend to how brands operate online. Managing heavy, outdated internal infrastructure, employing inefficient coding methods, and storing unused data can waste energy, contribute to carbon footprint, and cost a brand valuable time and resources.
Some brands are showing how it’s done. Luxury self-care brand Aromatherapy Associates sources sustainable ingredients for its beauty products directly from landowners and harvesters, ensuring a minimal carbon footprint and traceability. Its product packaging is now made from 50% post-consumer-recycled materials and is 100% recyclable. The company has also been awarded The Butterfly Mark, a distinction given to luxury brands exemplifying a positive environmental impact, and is designated a certified B Corp.
Fashion brand Mint Velvet built its #MVConscious 2030 strategy for becoming “a more sustainable and circular business” on three important pillars: people, planet, and community. The brand clearly defines its green goals, detailing where it is today as well as its future targets. In its efforts to reduce the amount of apparel waste that ends up in landfills each year, Mint Velvet encourages consumers to recycle unwanted clothes by donating to charities or through swap parties—store events where customers can swap items to extend the product’s life cycle. Mint Velvet is also a signatory of Textiles 2030, an initiative by UK industry leaders to “accelerate the UK fashion and textiles industry toward a circular economy.”
Options now also exist for some brands to go even further and engage in recommerce to keep products in circulation either for direct resale or repurposing. The market has experienced a significant boom in recent years, thanks in part to innovative startups and resale sites. Consumers showed strong interest in recommerce, with 54% saying they were at least somewhat interested in this sustainable model, led by 59% of Millennials.
While the investments in these initiatives will be significant, the good news for brands is that 51% of executives saw increased profitability following investments in ESG. Part of this should come from the willingness of consumers to pay more for products from sustainable-minded companies. Most global consumers said they would be willing to pay more for a sustainable product, led regionally by 78% in the Middle East and demographically by 71% of Millennials. Among those consumers who said they would be willing to pay more, 65% would pay a 20% premium for sustainable products. In Europe, 75% of German shoppers would pay up to 20% more.
The goal for brands is to weave sustainability seamlessly into its operations, which should include all the partners it does business with. While the journey is long and the investment significant, the imperatives are both ethical and commercial.
