The word “sustainability” gets thrown around a lot these days but it can be related to environmental, economic and social issues. Over 90% of CEOs state that sustainability is fundamental to their success (1), so it is worth investing the time and energy to share with consumers what sustainability means to your brand.
As concerns about the environment and corporate sustainability continue to gain momentum around the globe, the market for sustainable goods is expanding. With this, the level of commitment to sustainability of a given brand is an increasingly important factor for consumers when making a purchase decision, for some even the top priority. A 2015 Nielsen global study revealed that Millennials are especially willing to pay more for the sustainable option (2).
Whether your brand has a positive impact on the environment, contains organic ingredients, supports local community initiatives or uses fully recyclable packaging, these factors all add value for the consumer. By being open and honest about responsible processes (operational transparency) or the sustainable sourcing of ingredients (product transparency), consumer trust in your brand will increase. People connect with brands that they share values with so by staying true to your brand visions and nurturing these connections, it is possible to attract new customers as well as retain existing ones by fortifying trust and increasing loyalty.
Back in 2013, cosmetics giants L’Oréal announced their commitment to transform the sustainability footprint of the company, while achieving its business ambition. The commitments are organized into four pillars: innovating sustainably, producing sustainably, living sustainably and sharing growth with employees, suppliers and the communities with which L’Oréal interacts. Progress is measured quantitatively every year, and the results are available to everyone. Read their report here. With such well-known companies leading the way by offering this level of commitment and transparency it is hoped that others will continue to follow suit.
“We have once again been able to show this year that economic performance and environmental, social and societal performance go hand in hand and are mutually reinforcing.”
Jean-Paul Agon Chairman and CEO (LOréal)
Nielsen investigated to what extent sustainability claims affect sales across three product categories in the US – chocolate, coffee and bath products (3). Over the period of one year (2017-2018), bath product sales grew by 1%. However, within the category, those products with sustainability claims (environmental claims, organic, mineral presence and essential oil presence) grew by 14%. Evidently, consumers noticed the claims on the labelling of the products they purchased and desired their benefits.
With this in mind, it is possible that leveraging sustainability claims on product packaging as well as highlighting the benefits of specific ingredients could represent a new market opportunity for existing brands.
Sustainability is no longer a niche. It is no longer a buzzword or a passing trend but a necessary business opportunity. Consumers are looking for products that are both good for them and good for society so if you have one, make it known, if you don’t then maybe it’s time to think about going green.