Calls for making sustainability a business imperative have become cliche, undermining complexities of actually doing so. There is no single, definitive business imperative – simply put, every company is different. Consumer-facing companies are flooded with survey data on the importance of sustainability to consumers and their willingness to pay a green price premium (although when faced with a price increase, consumers don’t follow through). On the other hand, B2B companies frequently have contractual generic sustainability/ESG mandates from their corporate customers. That isn’t anything new, although the breadth of the mandates and how serious they are taken have increased in the past 3 years.
What is a company to do? A recent report from Bain may offer insight. The firm published results of a survey of “more than 500 B2B buyers and sellers across a range of industries, and nearly 19,000 consumers across 10 countries.” ESGToday gave their perspective on the report. Setting the stage – executives are pushing sustainability down their list:
“The report found a decline in CEOs’ prioritization in sustainability relative to other topics, as executives address a range of issues including inflation, disruptive technology, and geopolitical uncertainty. Additionally, companies are now shifting from a ‘hype’ phase of setting sustainability commitments and early initiatives to the realization that the transformation will be more difficult or take longer than expected.”
In an odd contrast to executive apathy, Bain found “roughly 60% [of consumers] say that their concerns about climate change have increased over the past two years, often sparked by personal experience of extreme weather.” While they want to make sustainable purchasing decisions, “consumers have trouble figuring out how to live sustainably and look to brands and retailers, in addition to government, to help them. This opens up opportunities for companies that can support consumers’ continuing quest for a sustainable lifestyle.”
The firm concluded:
- The best companies will develop solutions that help consumers live more sustainably, not just buy more sustainably.
- Companies can’t market ‘sustainability’ as a single concept or address consumers as a monolithic group, but value can be created by targeting specific customer segments with category-relevant claims.
Sustainability leaders, staff and advisors: Executive deprioritization of sustainability at the moment is a threat, but also an opportunity for you to shine by finding hard dollar business value in areas executives aren’t looking at right now. If you are a consumer-facing company, research your customers and their current key buying criteria to create a roadmap for your best opportunities for growing revenue, reducing costs and bringing focus and efficiency to your sustainability programs.
Are you a B2B company? Take a look at the next blog.
Our members can learn more about the business value of ESG/sustainability here.
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