At its simplest sustainability is meeting the needs of the present without compromising those of the future. The three pillars of sustainability are “people, planet and profit,” or social, environmental, and economic. The same set of values is captured in the now-popular concept of the “triple bottom line.” This means that how a company relates to its workforce has become as important as its carbon footprint, and both play a crucial role in its ability to grow and sustain profit.
But we’re not yet living in a sustainable world. Without major change in the way more companies do business, future generations won’t be able to meet their needs and expectations – of good jobs, a clean environment, social responsibility, and hope for the future their children will inhabit as adults. Companies must shift toward a sustainable business model that remains true to the nature of enterprise; making money.
Sustainability As An Actual Growth Strategy
As I detail in my new book, Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line, this means more than selling credibly “sustainable” products and services. It requires putting the three pillars of sustainability at the heart of the organization – not as a concession to consumers, but as an actual growth strategy.
A look at the landscape shows why that’s smart.
2.5 Billion “Aspirational” Consumers
The SustainAbility, Globescan and BBMG study reveals 2.5 billion aspirational consumers who value style, status and sustainability. That’s more than two-thirds of the global consumer population. More than nine of ten members of this fast-growing group believe they need to consume less in order to preserve the environment for future generations, versus three-quarters of all consumers.
They want style and sustainability. They trust and buy from companies when they do the right thing, and will encourage others to do the same. They’re young, hip, urban, ready to buy, and are especially concentrated in key markets like China , India and the U.S.
Edelman’s Brandshare study confirms that such consumers are ready to help transform the world through sustainable commerce, at a much faster pace than so far.
The “Opportunity Gap”
So what stands in the way? The same study shows that only 10 percent of consumers think that brands actually do share their values and provide responsible products and services. This “opportunity gap” reveals a disconnect between what consumers want and brands are providing.
There’s more along these lines.
- Triple Pundit has shared data about consumers becoming increasingly skeptical of green products.
- The Edelman Trust Barometer Studyshows that only one-fifth of respondents believe business is helping to resolve societal challenges.
- The 2014 State of Green Business Report from GreenBiz Group and Trucost finds scant progress among large, public companies on key environmental concerns including greenhouse gas emissions, air pollution, biodiversity loss, ecosystem degradation water scarcity, and waste disposal.
Yet the GreenBiz/Trucost report also has some good news, and lights a path forward. A new “Natural Capital Leaders Index” – pinpoints large, public “companies that are growing their revenue while reducing their environmental impacts;” and keys in on “sustainability leaders” that use “the least natural capital to generate revenue compared to sector peers.”
“Natural Capital Accounting”
To businesses that understand the triple bottom line imperative to internalize sustainability, this construct of “natural capital” warrants very close scrutiny. As “natural resource accounting,” it is included in the U.S. Environmental Protection Agency’s definition of sustainability. It is recognized by the World Bank; embraced in New Jersey and by major corporations; and has been utilized in Washington state.
Natural capital accounting is based on the compelling recognition that our air, water, land, resources and species embody innate economic value that must be honestly calculated when harvested, and also shepherded for the long term. It starts with methodology to develop a monetary value for natural assets.
The World Bank explains: “GDP looks at only one part of economic performance – income – but says nothing about wealth and assets that underlie this income. For example, when a country exploits its minerals, it is actually depleting wealth. The same holds true for over‐exploiting fisheries or degrading water resources. These declining assets are invisible in GDP and so, are not measured. Wealth accounting, including natural capital accounting, is needed to sustain growth. Long‐term development is a process of accumulation and sound management of a portfolio of assets – manufactured capital, natural capital, and human and social capital.”
Winning Consumer Hearts and Minds
Such a process exemplifies the deeper and more integrated approach to sustainability that wins consumer hearts and minds over the long term. As Christine Bader noted earlier this year in The Guardian’s Sustainable Business Blog, success in sustainability now needs to be understood as somewhat less about measures, ratings, pronouncements, and headlines – and more about tools which accent “drivers, processes and stakeholders” and can be used to “spot, mitigate, and address risks.”
Going deep to build sustainability from the inside out becomes more possible when best practices of early adopters win wide recognition and contribute to corporate success. Consider just three in Washington state, where until recently, I lived and worked.
Theo’s, REI, Costco
Theo’s, based in Seattle’s Fremont neighborhood, is one of the most sustainable brands today. More than just makers of lip-smackingly good chocolate bars, Theo’s roots sustainability in everything they do – from how they source to how they manufacture. Consumers wouldn’t be so passionate about the brand if they didn’t believe in what it stood for. Theo’s embodies a promise of what the world could look like if every company made sustainability central to the product and brand.
The global outdoors brand REI has found the perfect balance between people, planet and profits. Their employee benefits are among the best; and their environmental work goes deep into their supply chain with product innovation and collaboration with manufacturers to resolve waste, water and chemical issues. They take a typically quiet, reserved Northwest approach, but do every bit as much on sustainability as more recognized competitors such as Patagonia.
Now, a curveball. Most of us wouldn’t look to a “big box” retailer as an exemplar of sustainability. But through its focus on the “people” pillar – namely, its workforce – Issaquah-based global retailer Costco is disproving every traditional assumption about the incompatibility of profit with generous retail salaries and benefits.
Washington state is just one place among many globally which reflects the growing interest of enlightened businesses in closing the “80 percent opportunity gap” with discerning consumers.
Consider some crucial trends that have unfurled in recent years.
Fair Trade was once just a little sparkle in the eyes of activists; today it continues to grow at a rapid pace, outstripping that of more ‘traditional’ ways of doing business and rising globally by 12 percent in 2011 alone.
Hybrid sales increased 72 percent in 2012 and were the fastest growing sector in the U.S. auto industry.
On the labor front, the Guardian’s Sustainable Business Series leading work case studies show companies deeply invested in employee programs centered around prevention, well-being, work-life balance, business strategy participation, and more.
Yet, as important as are the social and environmental responsibilities of brands, consumers choose based on additional considerations: how the product makes them feel, or look, or perform. That means that when sustainability enters in, it is less something than can be conveyed or sold purely with cold, hard facts. It is more a value which must be simply and strongly felt – or just intuitively understood. For companies who get this, the sustainability long game is on.
Henk Campher is Senior Vice-President, Business + Social Purpose, and Managing Director, Sustainabiliy, for Edelman, the global strategic communications firm. He’s worked for clients including Starbucks, Levi’s, Best Buy, Timberland, Tiffany’s and Nestle. He’s been an African development worker, trade unionist, and creator of the Nelson Mandela-initiated Proudly South African campaign. He was named as one of the Top 100 Thought Leaders in Trustworthy Business behavior, and The Guardian’s Top 15 Sustainable Business Executives on Twitter. He blogs regularly at TriplePundit and CSRWire, and is a frequent speaker at conference. Find him on Twitter @AngryAfrican. This piece is adapted from his new e-book, “Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line.” Readers can get a 15 percent discount on the e-book here using the code Campher15.
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