If you are reading this article, it’s most likely that you are part of an industry that generates waste and possibly grappling with the many varied paths to a more sustainable future. But that entails some incredibly difficult choices, buckets of confusion and concern on how you are going to be able to continue to grow, in particular, profits.
I have sat around boardroom tables with many businesses who are all talking sustainability. The initiatives they are undertaking and the actions they are so incredibly proud of. Some of these are just outstanding and are wholly-focused on truly making a difference in the world. Others are just falling into the hole of greenwashing. Throwing some jelly at a wall and hoping like hell it sticks. Why? Because it’s hard, confusing, difficult and some people just don’t get it.
Sustainability is however a non-negotiable for all retailers and must be addressed as a core part of their business strategy. Below the surface is an enormous array of complexity. There are endless challenges and initiatives that fall under one umbrella term. Often the biggest plays are to be made in the supply chain and the transparency that can be delivered long term. It takes time, money and resources in an eco-system that is already stretched. But where the heck do you start?
Firstly, we need to acknowledge that just being a retailer, you are at a disadvantage from day one, because you are part of an industry that continues to put more products into the universe. Ron Jarvis, chief sustainability officer at The Home Depot, spoke a deep truth about all of the retailers pursuing sustainability: that there’s really no such thing as an environmentally friendly company.
In an article published by Retail Dive, “People ask me all the time, ‘Is this an environmentally friendly product?’ And I go, ‘No.’ Unless you’re an organic garden grower that has your garden by the river, and you deliver all your products in a wagon and a buggy, then you’re not environmentally friendly,” Jarvis said at the time. “Everything we do has an environmental impact. There’s risk across the board in everything, whether it’s carbon emissions, chemical exposure, deforestation — all of those are risks. We look at those and we monitor and we say, ‘Which ones are acceptable risk? Which ones could hurt the greater good? Which ones could hurt society?’ There’s risk across the board. And they all keep me up at night.”
I guess that sums it up for a lot of retailers and businesses but we operate in a capitalist world and retail is unlikely ever going to go away.
In an operating environment that demands growth, businesses need to review how they operate and reconsider the purpose of their business which fundamentally (well for shareholders) is about making money.
There are options such as self-regulating by becoming B-Corps or achieving certifications which prove the business is achieving a set of standards.
But does that get to the heart of finding ways for the business to become sustainable and remain successful with the continuous volume growth?
Doing better business
As a result of both the pandemic and climate crisis we face a future with higher prices across everything from materials, energy, cost of people and transportation. Essentially time is running out so businesses have to disrupt the way they operate and in particular the level of effort in their processes, so that resources can be reallocated to solving the really big supply chain transparency issues and circular loop processes. That means there is every chance things are going to be harder short term. And no one wants to hear that and understanding it may mean changing the very foundations on what your business was built on.
But do customers really care?
The significance for customers has been amplified, I think, since the pandemic. We have all had time to sit back and assess how we spend our time, energy and resources and what is important to us. In addition the pause on worldwide commercial activity meant we could literally see the impact our “consumption” has on the environment. Air quality improved, oceans were cleaner and we simply didn’t consume as much stuff.
Certainly, the profound effects of global warming and climate change, along with near-annual “hundred-year” weather events (I was just in London and it was 40 degrees) and wildfires, have made it incredibly clear that past generations (mine included) have not been good stewards of our precious planet. And customers now expect businesses to step-up and ensure that they put purpose over profit and ensure their actions in production are prudent.
There was a US study recently released from Wharton Baker Retailing Centre, The State of Consumer Spending. The results provide strong evidence of the growth and demand for sustainable commerce based on values, attitude and lifestyle.
Generation Z is influencing the older generations to focus on sustainable purchasing decisions.
Most Gen Z’s say sustainability is more important than brand name in purchase decisions.
Gen Z’s influence over their Gen X parents has increased over the past two years, including the willingness to pay more for sustainable products.
Most respondents across every generation expect brands to become more sustainable.
There is a disconnect among Boomers, Gen X’s, Millennials and Gen Z’s on what sustainability means.
Men, Gen X’s, Millennials and Gen Z’s are the most likely to make purchase decisions based on values.
However, the report also reveals while two-thirds of consumers say that they would like to pay more for sustainable products, two-thirds of retailers believe consumers are not prepared to spend more for sustainable brands.
What the report also indicated that there is incredible skepticism as many leading brands have built their business on the premise of eco-consciousness with little support to their claims. Customers have had to do an insane amount of research to ensure their purchases are ethical. New disruptors here in NZ such as “All things considered” are pathing the way to make it more transparent for customers.
Confusion is real but you have to start now
At the time of writing this piece I received a great piece on the truth behind greenwashing. It's a great article worth a good read from WD Partners and it provided some good questions to ask yourself when navigating where you want to take your business.
Today's consumer is all about convenience and transparency, so how do you create a seamless experience that leaves zero room for questioning your brand's intent? It's also important to give your consumers insights to your efforts with ease, as customers have made it clear being presented with easy access to company claims along with actions taken would increase trust.
Consider questions like:
How am I creating trust in our sustainability claims? How are these claims then being advertised? What informational resources am I providing my eco-consumer? Is my brand truly deemed sustainable? What about the packaging? Building operations? What are the pain points? How do logistics come into play when rethinking how we do this? Who are the experts that can help us answer these questions?
From the lines I saw recently in Primark in the UK, it’s no secret that not every customer is putting their money where their mouth is. But this isn’t going to go away….well it actually might…we could destroy the planet faster than we are already.