Sustainable brands – what’s all the fuss about?

Telling a sustainability story through brand strategy is a growing challenge for business. With our upcoming roundtable event focusing on the convergence of sustainability and brand, and its impact on organisations – we’ve been considering the implications of building a sustainable brand.

Sustainable brands have taken centre stage over the last decade, positioning themselves as trustworthy, doing business the right way and in a manner fit for the future. Brands taking this approach are gaining cult-like followings and a loyal customer base.

Although plenty of companies look to these sustainable brands for inspiration, many are reluctant or even totally disinterested. Leaving us questioning whether sustainable brands are the new prototype or a trend that will soon pass.

The answer lies in just how important sustainability is in today’s world. For anyone thinking sustainability is a ‘nice to have’, secondary to the day-to-day running of their business, we find it incumbent on ourselves to be clear – it is not. Sustainability is a business fundamental.

This isn’t personal opinion, there are various voices relating sustainability to businesses in different ways but essentially delivering the same message - sustainability really matters.

Regulatory landscape driving change

Perhaps one of the clearest is the regulatory landscape. The amount of ESG policies and regulations being passed has more than doubled in the last decade, with no sign of slowing down any time soon. Let’s consider mandatory TCFD reporting. As of April 2022, thousands of UK companies now need to report, annually, on their climate-related risk in line with the recommendations of the global Taskforce on Climate-Related Financial Disclosures. And in the UK, companies with 250 or more employees are required to produce annual gender pay gap reports.

Alongside this, there’s huge expectation from the world’s institutions and most reputable NGOs. For the first time, the UN has called on companies to take a proactive and leading role in driving the sustainability agenda forward with the introduction of 18 Sustainable Development Goals. Additionally, the Paris Climate Agreement is setting emission reduction targets at global and state levels, most of which are being pushed down to the private sector as transformative action is required to achieve them.

Investors and customers

The importance of sustainability isn’t just coming from policy makers. Investors, too, are looking for companies that embed sustainability in their business due to the risk mitigation and value creation it provides. These so-called ‘ESG investors’ are not by any means a niche in the market. By 2025, it is expected that around 33% of all global assets under management will have ESG mandates.

Companies looking to secure or even retain investment need to demonstrate a holistic, considered and meaningful approach to sustainability. This signals that inherent risks are being effectively managed and value created. To achieve this, there are various standards and frameworks companies can align to, all of which require more than window dressing and empty promises.

Then there’s the customer. Both in the B2C and B2B spaces, customers care about sustainability. There are numerous studies that show just how tuned in to and even concerned today’s consumers are about sustainability. These aren’t just attitudes - they translate into actions:

• 75% of Millennials are eco-conscious to the point of changing their buying habits to favour environmentally friendly products.
• 70% of Gen Z in the UK are willing to make big changes to their own lifestyle to reduce the impact of climate change.
• 64% of surveyed 18 to 22 year-olds consider it important for employers to act on environmental issues, and 59% would remain with responsible employers for a longer period of time.

Sustainability and B2B

In the B2B space, the importance of sustainability is equally prominent. Under the context set out above, all companies are working to ‘build better businesses’ that meet their stakeholders’ expectations, comply with regulations and position themselves to stay relevant in the evolving macro context. According to a recent KPMG study, 95% of the world’s largest companies have implemented ESG programs. In short, the solutions companies provide to one another need to factor in sustainability.

This shifting commercial landscape is the reason why so many companies are building/rebuilding themselves into sustainable brands. The key drivers of business success are growth, competitive advantage, risk mitigation and value creation, all leading back to the same place – sustainability.

Building a sustainable brand – getting it right

It’s clear, therefore, why brands are repositioning themselves as sustainable brands.

The same processes that go into ‘regular brand building’ apply to sustainable brands too. Where sustainable brands differ, however, is in the amount of scrutiny they receive. This is an extremely important point to understand.

Decades of corporate scandals and statistics highlight just how much negative impact capitalism and corporate growth has had on the planet – putting companies on the back foot. They are viewed as ‘the bad guy’ that puts profit above all else, at the expense of the environment and society. Year on year, The Annual Edelman Trust Barometer shows low consumer trust in institutions. Moreover, the demand from consumers on businesses to do more and do better regarding environmental and societal issues has increased.

It means that sustainable brands need to really walk the talk to avoid accusations of greenwashing and inauthenticity. They need to ensure that the sustainable branding they develop is firmly rooted in robust strategic thinking, implementation and demonstrable outcomes, aligned to international standards and best practice. They need to make sure that the decisions they make at business level align with and support the brand positioning they subsequently develop.

If you’d like to learn more about building a sustainable brand, please contact Claire Stuart on [email protected]

Article co-authored by Claire Stuart, Director of Brand, Keith Taylor, Director of Brand and Sue Francis, Senior Consultant – Sustainability, at Emperor.