Sustainability is becoming a central issue for many businesses. Companies with business models that make use of renewable resources are ahead of the curve on environmental regulations as the next generation of customers, clients, and talent will increasingly demand sustainable business credentials. Companies across industries are addressing key areas of sustainability such as energy, waste, workplace environment, transport and purchasing. This is improving brand value and cutting costs for many.
Marketing sustainability credentials
Sustainability has become a necessity for companies, with 62% of executives considering it necessary to be competitive, and a further 22% believing it will be essential in future, as promoting sustainability appeals to more consumers. But are companies Greenwashing?
In June this year H&M were under investigation by Norway’s Consumer Authority for their sustainability claims. There were concerns that H&M may be unable to back up their claims about the sustainability of their business and their ‘Conscious Collection’ range. A very brief explanation on their website about the range, failed to adequately explain why the products are sustainable, only stating that they use up to 50% recycled material or 20% for cotton products. They also failed to describe how they’re produced or what the carbon footprint of the range is.
Alongside the statement on H&M’s website they released marketing imagery, with models in the clothes surrounded by grass and foliage, implying the collection is environmentally friendly. Elisabeth Lier Haugseth from the Norwegian Consumer Authority told the publication Dezeen, “Based on the Norwegian website of H&M we found that the information given regarding sustainability was not sufficient, especially given that the Conscious Collection is advertised as a collection with environmental benefits.” Speaking to business magazine FastCompany, Lier Haugseth said, “We would like to underscore that we consider H&M’s claims to be misleading not false.”
The cost of change?
The performance benefits of a positive sustainability image are obvious. However, ‘Going green’ often costs companies large sums of money to start out. From switching electrical facilities for offices to solar powered, to considering their production process and switching to green materials which can also lead to greater costs, this is usually then passed along to customers in terms of higher prices or comes as an expense to the company in smaller profit margins.
Sustainability targets – some working examples
In 2017 Carlsberg announced an ambitious new sustainability program they call ‘Together Towards ZERO.’ The four-part venture is focused on the key goals of a zero carbon footprint, water waste and irresponsible drinking. The plan includes several goals, such as a 50% reduction in carbon emissions and 15% reduction in carbon footprint at their breweries by 2022, with a target of a zero carbon footprint by 2030. This week, Carlsberg announced plans to develop a paper beer bottle made from sustainably sourced wood fibres. Vice President of Group Development, Myriam Shingleton said “We continue to innovate across all our packaging formats, and we are pleased with the progress we’ve made on the Green Fibre Bottle so far. While we are not completely there yet, the two prototypes are an important step towards realising our ultimate ambition of bringing this breakthrough to market. Innovation takes time and we will continue to collaborate with leading experts in order to overcome remaining technical challenges, just as we did with our plastic-reducing Snap Pack.”
General Mills has committed to focus on climate change, water stewardship and preserving ecosystems, as well as sustainable sourcing, human rights and animal welfare goals. In 2016, they were able to sustainably source 100% of their palm oil, and their stated goal is to do the same with their remaining top nine priority ingredients by 2020.
Unilever launched their ‘Sustainable Living Plan’ in November 2010. This 10-year plan includes environmental targets and aims to halve the company’s environmental impact and double sales by 2020. Other targets include the reduction of water use, greenhouse gas emissions and waste impacts in their factories, and beyond. This approach seems to be working well. So far, it has reduced carbon emissions from factories by 37% They have also reduced waste going to landfill by 85%.
In 2015 Adidas partnered with environmental organisation Parley to create items from recyclable plastic bottles collected from shorelines by Parley. By the end of 2019 Adidas estimates 1.1 million shoes will be made with at least 75% recycled plastic.
Some have successfully achieved sustainability across the supply chain
IKEA has invested throughout its entire business operation. This includes many aspects throughout the supply chain, only some of which are seen by customers. For example, they have sourced 50% of their wood from sustainable foresters and 100% of their cotton from sustainable farms (which includes reduced water use, energy, and chemical fertilisers).
What are governments doing to encourage sustainability?
As more investors pay attention to sustainability and encourage companies to reach greener goals, it is likely that reactions and consequences for false and misleading claims will become more extreme. In the US, companies are being advised to review their sustainability reporting and environmental claims to ensure they are neither misinformative nor deceptive, comply with the federal trade commission and meet advertising laws.
In the UK the government are encouraging businesses to operate more environmentally friendly by giving tax relief. For example, if companies are smaller, do not use much energy and buy energy efficient technology for their business.
Recruiting for sustainability
In the past few years the number of dedicated sustainability roles has increased in both importance and influence. For instance, in addition to Sustainability Manager roles, we’re starting to see job openings for Sustainability Product Manager; Responsible Sourcing Director; and Sustainability Communications amongst others.
What lies ahead for sustainability?
Companies are finding there is no swift or inexpensive way to achieve sustainable business operations. Major changes and investment are required to accomplish long-term sustainability.
Research shows that when a company has invested in sustainability there have been significant benefits when integrated into business operations. At least nine companies globally generate a billion dollars or more in revenue annually from sustainable products or services — those that focus on sustainable living and/or are produced sustainably, according to The Guardian. Those nine companies are Unilever, General Electric, Ikea, Tesla, Chipotle, Nike, Toyota, Natura and Whole Foods.
So, although there is a great deal more to achieve, the increased focus on sustainable business models and employing the talent required to implement and drive such models, is beginning to drive behaviour, decision making and business performance. There is more than enough incentive for companies to continue to invest in delivering sustainability.