Know your business
Understanding the environment as a key to success
Sustainability in business is becoming one of the most important factors of success. Consumers are smarter and more inquisitive than ever before. Having a clear direction and stance on environmental issues can help your business stand out from the crowd, especially if you want to build trust with your customers.
Sustainability report: the new essential
Climate change is at the forefront of many consumers’ minds. Now, it must be at the forefront of businesses’ minds too. The consumer base is shifting towards sustainable and ethical products, and companies must respond. For most companies, this requires an analysis of their environmental impact, as well as an establishment of their goals. This internal reflection is crucial to building an authentically sustainable brand.
Once a business can set these goals and begin implementation, it can market these actions. For large companies, this is as an ESG or Sustainability Report, which outlines all the goals and actions the company has to mitigate its environmental impact. For smaller, newer companies, this can be embedded into the identity of the brand.
It is easier to start a sustainable company than rebrand an existing company as sustainable. This often misses the mark, and consumers can see through it. Simple steps like calculating approximate carbon footprints, regulating waste management, and doing environmental audits can start the process of becoming more sustainable.
A business must know its environmental impact if they want to be sustainable. If it doesn’t, the consumer will learn of these impacts. Understanding your business’s relationship to sustainability also helps build brand loyalty and trust. If a business can successfully implement its environmental impact goals, then the respective consumer base will follow.
Consumers, especially consumers entrenched in the sustainability space, are already fluent in the terminology and optics of a sustainable business. There is a growing population of individuals who will choose to buy a product because it is sustainable.
Consumers are willing to change their consumer behavior to more closely line up with their values. Nearly one-third of British consumers have reported changing their consumption habits because the brand was not sustainable or ethical enough. It is imperative that a business understands sustainability at the same level as its consumer.
Consumers are learning
The status quo for product marketing and labeling hinges on fuzzy communication between the consumer and the producer. The producer, who has engaged in ethically questionable activities, will try to hide that fact from the consumer. The producer may even wish to fool the consumer into thinking the product is actually a net benefit to the laborers or the environment.
This marketing, through means of optics and clever wording, has created an economy where the average consumer cannot know whether a product is truly sustainable at first glance. Thus, a movement of conscious consumerism has come to clear through clever marketing.
Conscious consumerism and ecological citizenship are movements in which individuals take on the responsibility of aligning their actions to their values. If a conscious consumer wants to protect the rainforest, they will try to avoid buying products that harm rainforests. These ideals are based on the notion that to move past climate catastrophe, we, as citizens and consumers, must act on our values first.
Social media has fostered a community of individuals who work to bring transparency to consumer goods. Online activists and journalists will expose companies for their unethical and unsustainable behaviors. This causes a scandal on the company’s end, often as bad PR or boycotts.
The age of hyper-connectivity allows this information to travel faster, and it makes it more difficult for companies to hide their transgressions.
Oatly: how to anger your consumer
Oatly, an oat-based dairy alternative, was recently bought by Blackstone. The company, once favored by vegans, environmentalists, and lactose-intolerant alike, now faces backlash for selling to Blackstone. Blackstone was revealed to be linked to deforestation in the Amazon Rainforest. The head of Blackstone, Stephen Schwartzman, also backed President Trump in the 2020 election.
This acquisition would not have turned heads if Oatly was a traditional dairy brand. Instead, the company caused a scandal because the acquisition directly opposed the inherent values of Oatly and its consumer base.
Sustainability-branding is a key component of profiting as an ethical business. Oatly was able to build a fanbase of oat-milk enthusiasts, who were more often than not left-leaning. Oatly is part of the non-dairy market sector that caters to individuals who need a replacement for their morning coffee.
One reason people stop eating dairy is because of its negative impact on the environment, and Oatly knew that. Oatly had sustainability at the core of their business model, which allowed them to make 200 million USD in sales in 2019.
Oatly’s consumer base was made up of individuals who had some care for the environment. This allowed Oatly to become successful, especially since their actions were sustainable and not just marketing tactics. It only took one savvy consumer to research Blackstone and hurt Oatly’s reputation.
Oatly had built trust with their loyal consumers, but then broke it after the Blackstone acquisition.
Conclusion
Building a sustainable business can seem like a fruitless endeavor, but it simplifies down to one idea: understanding your customer. The modern consumer is worried about climate change and wants to buy products that do not overtly harm the environment. Consumers often have a baseline understanding of environmental issues, and they are learning to see through greenwashing.
The best thing a business can do is to meet the consumer’s knowledge level. If a business can understand its own environmental impact, then it can set sustainability goals. Companies who are successful at this understand the emotions and ethics wrapped up in conscious consumerism.
They can build trust with their consumer based on values rather than other factors. Consumer loyalty is not guaranteed, and businesses must understand their consumers’ values to avoid upsetting them.
References
Thank you for reading. I decided to combine the nature of “sharing is caring” with the importance of this subject affecting us all into creating a 5-day free email course titled “How to Build Your Sustainable Brand”.
The course is currently in beta and will cover 5 different lessons that will help you better understand, grow, and attract clients to your sustainable brand.
Sign up and be the first to receive it here.
