Whiplash Team, 16th September 2022
Sustainability is a competitive advantage for brands
For brands, sustainability is a competitive advantage. It not only enables greater access to financing, both public and private, but it also offers a greater ability to attract more and better talent. Lastly and most importantly, today’s consumers prefer sustainable brands.
Although there are still those who maintain that companies that are sustainable are not profitable, the truth is that sustainability has become a great competitive advantage for the organisations that have incorporated it as a core part of their purpose.
Why?
There are several reasons:
1.- Being sustainable offers greater access to financing for companies.
On one hand, public financing; through funds, programs and plans, which can be multilateral (such as those of the World Bank or the International Monetary Fund), European (NextGenerationEU or REPowerEU Plan), or national (such as the Recovery, Transformation and Resilience Plan, of the Government of Spain).
On the other hand, private financing. There are more and more banks, both in the so-called ethical banking services and in the traditional ones, that offer green bonds and better financing conditions to sustainable companies or with environmental projects. In addition, there are more and more investment platforms and funds that finance sustainable business initiatives.
Also, there are programs specifically designed for SMEs, which include everything, from a diagnosis of energy efficiency and calculation of the carbon footprint to the recommendation of actions and financing possibilities.
2.- Regulation is another reason why sustainability is a competitive advantage.
Regulation continues to advance at the European level through the Green Deal and the new classifications of sustainable activities.
Accordingly, on a national level, in various countries, new legal figures have been approved for companies with a purpose that generates not only economic return, but also social and environmental benefits.
For example, in Spain, they are called ‘common interest benefit companies’, and they are included in the new Law for Business Creation and Growth. In the United States, they are called a ‘benefit corporation’; in France, ‘société à mission’; in Italy, ‘società benefit’ and, in some Latin American countries, commercial society of benefit and collective interest.
3.- Sustainability is useful in attracting talent.
Many are the workers who prefer to lend their talent to sustainable companies. Various studies show that, especially among Millennials (born between 1981 and 1996), sustainability is a determining factor when applying for a job.
Moreover, a study conducted in 2021 by the IBM Institute for Business Value found that 71% of those surveyed, all of whom were job seekers, would prefer to work for an environmentally sustainable company.
4.- Consumers prefer products from sustainable brands.
A suffocating summer, marked by environmental catastrophes around the world – devastating fires, floods and a drought in Europe that has been catalogued by the European Commission as the worst in the last 500 years, among others–, has revealed the effects of climate change.
Hence, many people begin to feel what has been called eco-anxiety. The term, coined in 2017 by the American Psychological Association, refers to the chronic fear of environmental disaster.
Although this disorder mainly affects the Z and Millennial generations, environmental awareness is a cross-cutting phenomenon among consumers of all ages and around the whole of the world. Consuming responsibly is a challenge that users of products and services take very seriously.
Today, consumers are not only aware that it is necessary to renew, reuse and recycle, but also, they prefer to buy products from those brands that they consider sustainable.
Even more so if they are convinced that these organizations take their commitment to the environment and society seriously. In short, they are companies that create social value.
Consumer surveys talk
In the world, a study on global consumer trends carried out by IBM in 2021, revealed that “consumers of all ages and with all types of income pay higher sums for those products that are aligned with their personal values.
On average, 70% of consumers who buy with these values in mind pay an additional 35% more for their sustainable purchases, whether they are recycled or ecological products.”
In Spain, the Study on Sustainable Consumption, conducted by Oney in collaboration with OpinionWay, highlights that 85% of Spaniards would pay more for sustainable products and that 93% of them “state that they try to adopt habits related to responsible consumption on a daily basis”.
And in Latin America, a recent survey conducted by the Boston Consulting Group reveals that in that region, between 50% and 70% of consumers would be willing to pay more for sustainable products, depending on the product and the sector.
Ignoring sustainability is not an option
In today’s interconnected world, companies can no longer afford to ignore the impact and urgency of being sustainable.
In addition, the adoption of new and more efficient systems for monitoring and classifying greenhouse gas emissions, as well as unsustainable production processes, will expose those brands that do not act accordingly.
This will undoubtedly generate a negative perception of public opinion. Consequently, detachment among users will grow, in addition to increasing the risk of sanctions by regulatory bodies.
The challenge of sustainability
For organisations it is essential to become aware of what the challenge of sustainability implies.
Users around the world demand concrete actions in relation to climate change, the health of the planet, and social, economic, and environmental sustainability.
In addition, they demand from brands a greater understanding and empathy for the problems that concern society.
By connecting its purpose with the collective aspirations of society, answering the questions “why does the brand exist?”, “what does it exist for?” and “why should anyone care?” the brand will find an inspiring moral compass.
And it is this moral compass, embedded in the brand’s purpose, that will help it define its role in society and contribute in building a responsible relationship with our planet.
