Sustainability and Reputation

Eight years ago, Nielsen published an influential research study called Doing Well by Doing Good. It said that a striking difference in attitudes had opened up between generations, especially Baby Boomers (like me) and Millennials. My children’s generation would be much more likely to, a) pay extra for sustainable products, b) check the packaging to ensure positive social and environmental impact and c) prefer to work for a sustainable company. In fact, about twice as likely! And this trend was global.

Insight 1: Sustainability is an issue of intergenerational justice (and is much more than just practical actions concerned with sourcing, making and distributing products). Baby Boomers, as they say on the football terraces, “have eaten all the pies” and left it to their children to clean up the mess.

Companies are typically run by Boomers – but if they want to recruit and retain Millennials (and Gen Z) they need to respond to the big shift that has happened. In fact, a reputation for ethical consumerism is becoming vital for companies wanting to attract and retain the best young talent.

Nielsen also showed something else important. Sustainability was just one concern amongst a whole set of social justice issues such as increasing access to clean water, improving sanitation, ensuring environmental sustainability, eradicating extreme poverty, reducing child mortality and improving maternal health. The kinds of people who check labels also worry about creating a better world, and want to work somewhere that does something about it.

Insight 2: Sustainability is just one aspect of personal ethics for an activist generation. In the UK now, we see this in the public personas of professional footballers. Marcus Rashford, a Manchester United star, campaigns against child poverty and has successfully shamed the government into action. Every Premier League football match starts with players ‘taking the knee’ in a stand against racism. Contrast this with 20 years ago, when the headlines were all about the bling lifestyles of footballers’ wives and girlfriends (the so-called WAGs). They regularly appeared in the pages of the gossip mags displaying their wealth and huge houses. That look plays very badly today.

For brands, this means that sustainable practices are just one aspect of broader business ethics. A brand burnishing its reputation for sustainability also needs to treat its staff and suppliers fairly. Its policies on sustainability need to chime with all its other behaviours and policies, such as social inclusion as well as the wider impact of the company on society.

Ethical consumerism is not new. It has deep roots in the 19th century with companies like Cadbury (chocolate) and Clarks (shoes). Their Quaker founders believed that good business was ethical business. In 1976, Anita Roddick launched The Body Shop with a radically different approach to the beauty industry. Her products were “ethically sourced and naturally based… in no-nonsense packaging that you could easily refill.” The brand had “purpose – profit and principles working in harmony.” It turned out that Roddick was way ahead of her time.

Insight 3: An ethical approach to business is often part of the deep history of big companies, and leaders today are rediscovering it. Unilever is the most talked-about example. History nerds will know that founder William Lever was one of those high-minded Victorian do-gooders who cared for his staff and built good houses (indeed whole towns) for them to live in. In 2009, Paul Polman took over as CEO and stayed for 10 years. Polman set a target to decouple Unilever’s growth from its overall environmental footprint and improve its social impact through the Unilever Sustainable Living Plan. This manifested itself in its “Five Levers of Change”, which crystallised the company’s big vision into a set of practical actions that Unilever staff could act on: 1) Make it understood, 2) Make it easy, 3) Make it desirable, 4) Make it rewarding and 5) Make it a habit. Unilever positioned itself as an enabler in a process of change and, wisely, has never claimed to have achieved sustainability.

Insight 4: Sustainability for big businesses is a process of internal transformation and not a destination that can be achieved in even a decade. Big businesses with long histories have many skeletons in the cupboard. Over-claiming attracts the attention of activist consumers who have the tools to research and expose hypocrisy – aka ‘green washing’ (see my piece Navigating the Age of Online Activism in Aurora’s May-June 2021 edition for more on this). Moreover, it can be difficult to be fully sustainable even for those with the best of intentions. Take energy, which all companies use. Companies might think they are doing the right thing by buying renewable energy, only to find that environmentalists have said that the rare minerals used in solar panels are mined unsustainably. Sustainability is a complex and highly technical moral minefield that lacks commonly agreed definitions. Tread carefully and take expert advice. It is, however, easier for new companies which have the freedom to redesign how they source, make, distribute and recycle from the ground up.

Insight 5: Categories with a bad record on sustainability (there are many) are fertile ground for ethical start-ups that wear their values and beliefs on their sleeves. The Body Shop prefigured and provided the model for another big trend – start-up brands with ethical consumerism ‘baked in’ from launch. (See my earlier piece How Lofty Is Your Brand? in Aurora’s May-June 2015 issue.) The apparel/clothing market has a particularly dire record of both depleting and poisoning water supplies, failing to recycle, as well as exploiting workers. All that cheap, fast fashion comes at a cost that is not factored into the end price to the consumer. In a recent seminar, I asked my students what clothing companies had impressed them. Here are three:

• Patagonia with anti-consumerism – free mending of their products and with campaigning telling consumers “not to buy” their jackets.

• Everlane with Radical Transparency – it reveals the true costs behind all its products

• Rapanui with Recycling – old clothes are recycled and made nto new.

Insight 5: The brands that win the best reputation for sustainability have a distinctive idea about how it is achieved within their category – the idea is both specific and practical. Patagonia is probably the most high-profile example. But, here is the contradiction – their anti-consumerism has proved highly desirable. Their customers are not just ‘buyers’ they are also ‘believers.’ They are growing fast as a business and, in fact, selling more jackets. If being fully sustainable is seen as a strategy for growth and profitability it will become a norm for most businesses

Why you should pay attention to sustainability at your company?

You have to develop and implement your policies soon or you will struggle to attract new consumers and employees in the future – and that, as all marketers know, is fundamental to brand health. Be sure that you have dotted all the i’s and crossed all the t’s before going public because over-claiming can, in fact, backfire. That said, there are inspiring and successful models to learn from. Unilever (a big legacy company) and Patagonia (a start-up) show that a sustainable business really is a healthy, dynamic and creative business that attracts committed customers and staff.

Julian Saunders is Founder, The Joined Up Company and former CEO, Red Cell (a WPP creative agency) and Head of Strategy, McCann-Erickson. julian@joinedupcompany.com