YOUR GUIDE TO SUCCESS THROUGH SUSTAINABILITY
Corporate responsibility and sustainability strategies may take different shapes around the world, but one thing is clear: consumers are using their spending power to effect the change they want to see. This isn’t a trend a company can simply side-step. Sooner or later, whether through government regulation, sheer force of nature, or public outcry, companies will need to respond. No matter what market you’re in, connecting sustainability factors to how it impacts consumers is the key.
“Sustainability is personal for consumers, which is why healthy for me and healthy for the world claims do so well,” said Crystal Barnes, SVP, Global Responsibility & Sustainability, Nielsen. “By identifying an opportunity to be more sustainable, and implementing a reasonable plan of action to accomplish it, companies achieve an authenticity that paid advertising can’t buy.”
When building an approach to corporate responsibility and sustainability, companies must understand how each factor plays into a consumers’ mindset and the sustainability sophistication of their market.
Where the sustainability product landscape is less developed, companies that establish themselves early can become sustainability champions, which could give them a leg up before the market becomes more crowded. While their interest might be new, these consumers are quickly becoming hyper-aware of the impacts of pollution and are demanding stronger, more aggressive action from their companies and governments.
In countries where “organic,”, “natural” and “artificial-free” are becoming commonplace terms, consumers will start asking “what do you mean?” and looking for more clarity in these claims.
Here are a few recommendations to help your brand win in this evolving sustainability space.
In the short term:
- Understand the impact of ingredients and the level of scrutiny that consumers apply to the products they purchase.
- Connect the dots between what’s healthy for the environment and healthy for the consumer.
- Communicate the value-add / benefit in your marketing.
- Incorporate the applicable sustainability claims on your packaging.
- Invest in product development, testing and research. As the market becomes more crowded, it’ll take more to stand out.
- Support your launch with the right marketing, promotions and distribution. Bonus: Keep a pulse on your marketing and fine-tune your messaging in-flight.
- Seek to build and grow your sustainability strategy to encompass every part of the business.
- Build a roadmap for product enhancements you’d like to make, whether it’s shifting to more sustainability-focused suppliers, reducing your use of packaging materials, or changing the ingredient line-up across your portfolio.
- Address consumer skepticism and be wary of overused labels and claims.
- Understand that consumers and their expectations will continue to evolve.
- Get ahead of government bans and taxes and borrow successful tactics used in recent sugar and tobacco reforms.
It’s important to keep in mind that sustainability is intricately linked with corporate reputation and authenticity. Any false claims or sloppy vendor management can result in a major scandal and damage the brand’s reputation.
WHAT DOES THE FUTURE OF SUSTAINABILITY HOLD?
As people become more aware of the effects of pollution on their bodies, pressure for governments and corporations to do more will continue to grow. The bigger the pollution impact, the more likely it is for governments to lean into corporations to support and drive their sustainability initiatives.
Thankfully, technology and scientific advancements are enabling companies to better manage their outputs and design sustainable buildings, farms and products, cheaper and faster.
Here are a few predictions for the future of sustainability:
Emerging market consumers’ sustainability savvy will grow; local brands will use sustainability as a venue for cross-border sales. In emerging markets, where consumers are demanding a strong corporate response and have the economic means, we’ll see an exponential rise in demand for sustainable products and sustainable-focused retailers. Fast-acting local brands who capitalize on this trend will be well-positioned to use these popular products to hop across the border and grow in similar nearby markets. These consumers and companies will quickly catch up to more developed sustainable markets and perhaps even leapfrog over them.
Specific sustainability will morph into personalized sustainability. Specific sustainability will continue to rise and as technology catches up, we’ll see it morph into personalized sustainability. Technology will enable consumers to match the right ingredients to their needs or ailments. Companies will need to clearly communicate and have the data to prove how their sustainable factors help consumers.
Challenger Brands will grow with socially-charged advertising. Challenger brands will grow in number and seek to appeal to the hearts of consumers through socially-charged advertising. These companies must be careful to not overstep the line and be seen as capitalizing on human tragedy. Before making their bold statement, they must evaluate and understand the consumer response at a high level of granularity.
Sustainable companies will grow in influence. Companies that take on sustainability challenges and win will wield more political and cultural influence than ever. Consumers will reward brands that keep them, their families and the world safe. Governments will recognize corporations that are driving major change, improving the lives of their constituents.
The insights from this report used a combination of the following sources:
- The Conference Board® Global Consumer Confidence Survey is conducted in collaboration with Nielsen Q2 2017 & Q2 2018
- Chinese Consumer Confidence Survey
- Nielsen Product Insider, Powered by Label Insight
- Nielsen Answers
- Nielsen BASES, Nielsen Breakthrough Innovation Reports 2015 – 2018
- Nielsen E-Commerce Tracking
- Nielsen Homescan
- Nielsen Quarter By Numbers Q2 2018 Report
- Nielsen Retail Audit
- Nielsen Retail Measurement Service
- Nielsen ScanTrack, Nielsen ScanTrack – HMSM
- Nielsen Wellness Track
Third Party Sources
- China Association of Automobile Manufacturers http://www.caam.org.cn
- Economist Intelligence Unit Food Sustainability Index 2017 http://foodsustainability.eiu.com/
- Jambeck et al. (2015). Plastic waste inputs from land into the ocean. http://science.sciencemag.org/content/347/6223/768
- R. Geyer, J. R. Jambeck, K. L. Law, Production, use, and fate of all plastics ever made. Sci. Adv. 3, e1700782 (2017). http://advances.sciencemag.org/content/3/7/e1700782.full
- Governance and Accountability Institute, Inc (2017) https://www.ga-institute.com/press-releases/article/flash-report-85-of-sp-500-indexR-companies-publish-sustainability-reports-in-2017.html
- FAO, Water, Water, Land and Ecosystems (WLE) Program of the CGIAR, International Water Management Institute (IWMI) (2018) More people, more food, worse water? a global review of water pollution from agriculture http://www.fao.org/policy-support/resources/resources-details/en/c/1144303/
- Morningstar Sustainability Atlas 2018 https://www.morningstar.com/lp/sustainability-atlas
- SDG Index and Dashboards Report 2018 http://www.sdgindex.org/
- The World Bank http://www.worldbank.org/en/topic/environment/brief/pollution
- World Bank and Institute for Health Metrics and Evaluation. 2016. The Cost of Air Pollution: Strengthening the Economic Case for Action. Washington, DC: World Bank. License: Creative Commons Attribution CC BY 3.0 IGO http://documents.worldbank.org/curated/en/781521473177013155/The-cost-of-air-pollution-strengthening-the-economic-case-for-action
- World Health Organization http://www.who.int/airpollution/data/cities/en/ 2016. Preventing disease through healthy environments: a global assessment of the burden of disease from environmental risks / Annette Prüss-Üstün … [et al]. http://www.who.int/en/news-room/detail/15-03-2016-an-estimated-12-6-million-deaths-each-year-are-attributable-to-unhealthy-environments http://www.who.int/news-room/detail/02-05-2018-9-out-of-10-people-worldwide-breathe-polluted-air-but-more-countries-are-taking-action
- WWAP (United Nations World Water Assessment Programme). 2017. The United Nations World Water Development Report 2017: Wastewater, The Untapped Resource. Paris, UNESCO. http://www.unesco.org/new/en/natural-sciences/environment/water/wwap/wwdr/2017-wastewater-the-untapped-resource/