Sustainability – as we know it – is not sustainable

Welcome to the first edition of our new biweekly newsletter The Demand Revolution.

The purpose of this newsletter is to share insights into creating and implementing growth strategies for sustainability after decades of false starts and incremental change.

The headline of this edition summarizes one of our motivations. Environmental sustainability has not become the basis for large-scale profitable businesses, even though sustainability entered the mainstream conversation decades ago. The standard explanation is now a cliché: executives and managers don’t make major investments in sustainable solutions because consumers don’t really want them, despite what they claim in survey after survey.

As a result, business leaders tend to treat sustainability as a compliance issue, not a business issue. Supply side efforts to control greenhouse gas emissions – combined with some niche efforts to sell “green” products – are the best that companies can do. No one can force a company to pursue profit opportunities that don’t exist, right? We can’t expect businesses to save the world if the consumers in their markets either don’t want to be saved or are unwilling to take an active role.

Yet the more we looked at that question of why sustainability efforts fail, the more we doubted that standard explanation. By the time we wrote our forthcoming book from MIT Press , The Demand Revolution: How Consumers Are Redefining Sustainability and Transforming the Future of Business, we had concluded that that explanation is outright false.

The fatal disconnect that is killing sustainability

The fatal disconnect that is killing sustainability doesn’t exist between what customers say and what they do. It exists between how companies view consumers and how consumers view themselves. This disconnect – which we refer to as the green mirage – rests on three premises:

• There are only two segments of consumers: those willing to pay a premium for sustainable goods or services, and those who aren’t.
• Consumers who aren’t willing to pay a premium are not actually interested in sustainability
• Consumers who are genuinely interested in sustainability will accept a “quality penalty” when they buy sustainable solutions.

The result? Companies often bring products to market that are either more expensive or lower-quality versions of things consumers already buy and generally like. It should be no surprise that consumers aren’t lining up around the block to buy them.

So, what will get consumers to line up around the block? To find out, we conducted extensive surveys, focus groups, and interviews in the United States and Europe. We listened carefully to what consumers told us instead of filtering their needs, wants, hopes, and habits through the green mirage. Here’s a glimpse of how we answer that question in our book:

“They don’t need lectures, and they don’t need scare tactics. They don’t need pretty green packages or a grand ESG purpose statement. They need affordable, useful, less wasteful products at scale. They are looking to companies to provide them with solutions that will leave them with the confident belief they are making a difference and contributing to a better tomorrow, for themselves if not for society.”

In other words, sustainability is also personal. It is about consumers’ current needs. This is line with how the UN’s Brundtland Commission defined sustainable development: meeting the “needs of the present without compromising the ability of future generations to meet their own needs.” Why should consumers sacrifice their current needs by paying a price premium or a quality penalty? The green mirage is making sustainability—as we know it—unsustainable.

The Demand Revolution is redefining sustainability

Our aim with our book and this newsletter is to redirect the conversation around sustainability so that it focuses on value creation and strategic differentiation, not price premiums and quality penalties. That leads us back to the question of why so many companies fail in their sustainability efforts.

Our explanation is that the green mirage has prevented companies from seeing the true underlying consumer demand for sustainable goods and services. This pent-up demand is now so vast in many markets that we are witnessing the early days of a sustainability megatrend. Irresistible consumer pull at scale is becoming the disruptive driving force that will lead to the creation of new markets, new products, new ecosystems, and exponential growth. We call this the Demand Revolution.

Every two weeks we will share more insights into the Demand Revolution from different perspectives: business, government, and, above all, the consumers themselves, because they are the ultimate source of exponential growth. We also want to ignite a dialogue about how to move beyond easy fixes and incremental outcomes and pursue the high-risk, high-reward moves that will drive this growth.

The world can no longer afford to overlook this opportunity.

Please click here to pre-order your copy of The Demand Revolution: How Consumers Are Redefining Sustainability and Transforming the Future of Business. The book is scheduled for publication on October 8.