Is the Environmental Responsibility Your Most Significant Business Opportunity Yet?

gigcmo
16/11/2021
There's tension in the air. It's been about for some time, rumbling away in the background, but it's fast approaching fever pitch. Climate change and the health of the environment are on everybody's minds - governments, consumers, and companies, but whose responsibility is it to lead the way when it comes to seismic change? 
 
The short answer is that it's on all of us, but some have more power than others. While governments have a role, companies can make a difference that's demanded by the market, and the same level of bureaucracy does not bound that as elected institutions.
 
Over the past few weeks, the U.K. has hosted the U.N. Climate Change Conference of the Parties (COP26) in Glasgow. It has sought to accelerate action towards the goals of the Paris Agreement and the U.N. Framework Convention on Climate Change. The focus on the conversation has sparked the public to add their voice, loud and clear, in the form of protests that demand more action on the climate crisis and solidarity rallies to encourage action further. 

It's not too late to make a difference

All the evidence and experts point out that although we're in crisis, it's not too late to make a difference, but it nearly is. 
 
For many of us, the concept of global destruction from climate change is a little too big or a little too abstract for even business leaders to feel that they can make a meaningful difference. However, when it's about to hit our wallets, then it becomes tangible.
 
Mark Carney, Former Governor of the Bank of England, told Channel 4 News in 2019:
 
"Once climate change becomes a defining issue for financial stability, it may already be too late." 
 
In today's world, aware that climate change is related to everything from extreme weather events to global pandemics, our awareness as business leaders is becoming more acute:  
  • 80% of executives are concerned, according to Deloitte Global's 2021 Climate Check report.
  • Climate change and extreme weather events such as hurricanes, floods, and fires, for example, directly impact 70% of all economic sectors worldwide. (Forbes)
  • Nearly three in 10 organisations notice the operational impacts of climate-related disasters, such as facilities damage and workforce disruption. (Forbes)


Capitalism is part of the solution

Also, in 2019, Carney was forthright in his opinion that capitalism is "very much part of the solution" to tackling the climate crisis. This continues to be a widely held and credible view. We have a responsibility but also an opportunity. Where businesses have a particular power that individuals do not is in four areas:
  • The scale of what they do daily – from waste to carbon emissions.
  • The influence on suppliers and their processes (choosing to avoid those who don't comply with particular guidelines, for example).
  • Their influence on the habits of consumers (an individual might decide to avoid plastic packaging, but if it's the only thing in the supermarket, it can be tough to avoid).

  • The opportunity to invest in and profit from new and improved methods of operating that are environmentally friendly. 

Trillions of pounds of investment flowing through the markets mean that there's an enormous opportunity to make a change and enhance your business simultaneously. 

Embracing the circular economy

From managing risk to making responsible decisions, embracing the circular economy is an actionable way to move forward. It can result in not just limiting the damaging behaviours and negative impacts of your business but transforming it into a company that does good and enables others to do good as well, all whilst profiting. 
 
In one of our previous articles, we discussed sustainable change as an opportunity for companies and the importance of understanding the impact it would have on creating a positive customer experience. Any marketing expert will advise the importance of establishing a leadership position early on when there is a long term systemic change taking place.

Being sincere about sustainability

Purpose is an important part of a healthy business strategy, but showing sincerity and authenticity is essential for consumers. Transparency means that paying lip service to a cause is no longer any good; customers want you to mean what you say and show it in your actions. 
 
Research shows that post-pandemic, the demand for sustainability from the brands we use is higher than ever. The U.S. sustainability market is projected to reach $150 billion in sales by 2021, according to Nielsen


Optimise your value proposition

The optimal value proposition is the point at which your company's product or service appeals to a customer's strongest decision-making drivers. Understanding your customer and recognising changes in their values, then making sure your value proposition is optimised, if not redefined for the world as it is, is essential to modern business.
 
With that in mind, changes in consumer lifestyle indicate that sustainability should be a top commercial priority for companies and many chief marketing officers are using it as a basis for business growth strategies.  Last year, a report from Deloitte highlighted that "consumer trends in 2020 reveal that sustainability is a key consideration for a variety of consumer segments when making their purchase decisions". The report went on to say that "over a third of consumers also value ethical practices in the products and services they buy."
 
The most significant lifestyle changes of consumers surveyed included:
  • 68% had limited their use of single-use plastics

  • 43% chose brands with proven environmentally friendly practices
  • 38% reduced the number of new products and goods that they buy
  • 34% reduced meant and animal product consumption
  • 34% chose brands that have ethical practices/values

What's particularly magic about companies' role in environmental change is the impact that one organisation's decision has on another. We have spoken before about how we exist in an ecosystem when accessing marketing talent as part of the sharing economy. However, the same applies to resources and practices. The brands that are bold enough to stand by their purpose, principles, and customer values, have the opportunity to create change across the board. As a business proposition, that's pretty powerful.
 

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