Brands with purpose: can sustainability drive growth?

In the face of record-breaking temperatures, global water shortages and rising sea levels, there’s no downplaying the climate crisis. The pressure is on for everyone to do their bit – governments, big businesses, brands and consumers. But the term ‘sustainability’ has been bandied about liberally in the past few years too, often with misleading consequences.

Is sustainability just a buzzword, or is it, as the World Business Council For Sustainable Development puts it, “the biggest economic opportunity of our time”?

It’s clear that consumers are now more willing to switch to brands with stronger sustainability credentials that can help them make ‘micro-differences’ in their daily lives. According to IBM, 62% of consumers are willing to change their purchasing habits to help reduce environmental impact.

They’re also willing to pay to go green. This is a long-standing tendency – in a McKinsey report published last decade, upward of 70% of consumers said they would pay an additional 5% for a green product if it met the same performance standards as a non-green alternative.

These behavioural changes are not just driven by a desire to ‘do good’ either. Inflation, supply chain disruptions and the rise of hybrid working mean consumers are looking for more innovative ways to spend and waste less by adopting a more sustainable lifestyle.

So, what does this mean for brands, and what can they do to avoid falling short of expectations?

What is a ‘sustainable’ brand?

In its simplest sense, a sustainable brand embodies and integrates key sustainable principles throughout its operations, culture and communications to create a positive impact on people and the planet.

Many of the world’s biggest brands have made moves to build sustainability into their business models. Unilever aims to have a deforestation-free supply chain by the end of 2023 and net-zero emissions by 2039. Nestlé has committed to using recyclable or reusable packaging only by 2025. Adidas has pledged that by 2025, 90% of products will be made from sustainable materials.

Smaller companies are setting new goalposts too. In the UAE, sustainable fashion brands like The Giving Movement, Sadeem and Wild Fabrik have exploded thanks to their commitment to producing beautiful clothes with a clean conscience.

Why? Because consumers want their favourite brands to care about the same things they do. Research shows that brands with purpose grow faster, too.

What do consumers want to see?

Today’s consumers expect brands to step up on environmental issues, reduce their global footprint and support their communities, partners and supplies. That means prioritising sustainable packaging and products, less wasteful manufacturing processes, higher ethical working practices and a clear commitment to human rights.

According to Deloitte, 64% of consumers have limited their use of single-use plastic, 59% have reduced the number of new products and goods, and 53% have repaired or fixed an item instead of replacing it in the past year.

Consumers are also looking for more transparency and direction from brands, such as greater clarity on how to recycle items and better signposting on how to repair items.

How can companies position themselves?

A robust environmental proposition can help companies tap into new markets and expand existing ones. In a recent survey, over 80% of companies revealed they were planning to increase their investments in sustainability, though the speed and direction they take vary significantly.

Here are a few examples of how brands are incorporating sustainability into their business model:

• A more transparent, accountable and responsible supply chain – 94% of consumers are more likely to be loyal to a brand that offers complete supply-chain transparency.
• Education programmes that maximise product lifespan – Patagonia has inspired a broader circularity movement in the past five years through its Worn War programme, which incentivises customers to repair their used gear.
• Greener packaging and shipping alternatives – 86% of consumers under 45 would pay more for sustainable packaging, and 57% of all consumers are less likely to buy products in harmful packaging.
• Programmes that reduce harmful impacts on the environment – Adidas has reduced 55% of its carbon emissions, 48% of its water consumption and 80% of its paper consumption through its Green Company programme alone.

What role does marketing play?

?Thousands of companies are quick to brand themselves as sustainable, but whether their customers believe them is another story. Today’s consumers want to see real-world proof of a company’s actions. Good intentions aren’t enough, brands need to illustrate what these sustainability initiatives look like.

But this can be tricky terrain to tread because consumers lack trust in brands. Almost half (49%) of consumers now think that brands are guilty of ‘greenwashing’, where companies make misleading claims about their plans and policies to boost their environmental credentials.

Marketers need to do more than reserve big budgets for ‘Earth Day’campaigns, use words like ‘green’, ‘natural’ and ‘eco-friendly’ and make bold claims on social media. Aligning strategy with corporate responsibility is essential.

Showcasing meaningful data about your company’s impact through ESG reporting can help build brand integrity, open up a conversation with your customers and stakeholders and position your brand as an industry leader.

But to build trust and reap the benefits of this new demand, you need to take an in-depth look at your strategy and ask the following questions:

• Who are you? Do you have a clear social mission? How is your brand furthering that mission?
• How can you meaningfully contribute to the conversation around sustainability? What do your customers want to see?
• How are you enabling a transition to a better future?

By looking inwardly to ensure that your purpose, values and strategy align when it comes to sustainability, you can avoid accusations of greenwashing and engage with your customers in more meaningful ways.

Conclusion – go greener for growth

As well as minimising environmental impact, incorporating sustainability into your business model can offer long-term financial gain. Research shows that consumers want brands to be more sustainable. Those that can prove their environmental worth gain a competitive edge in today’s market.

A robust and well-integrated sustainability strategy also puts brands in a better position to respond to fast-changing legislation. As the UAE gears up to host COP28 in November 2023, the government is unveiling new strategies and initiatives to mobilise the private sector in support of net zero.

Sustainability is a major growth opportunity for consumer-facing brands – but you need to act now to seize it.