Nearly every sector of the global economy has seen examples of this trend, including manufacturing, retail, energy, mobility, agriculture, entertainment and information technology companies. As this trend seems to be occurring across Europe, the US and Asia, it has presented a new paradigm for sales and marketing communications activities.

It is clear that the consumption of products and services is at the core of the sustainability issue. As consumer appetite for materials and energy continues to expand, we place ever increasing demands on the planet and on the services that its ecosystems provide. With supply chains becoming more global, consumption in one part of the world has direct social and environmental impacts in others.

It is also well established that the private sector plays a major role - not only providing goods and services that the consumers want - they are central to shaping demand. Through targeted advertisements, public relations campaigns, or by simply deciding which products are available to which audiences, corporations can finely tune the purchasing habits of consumers. Corporate marketers are certainly not the only factor that shapes purchasing habits, but they certainly play an influential role in determining what products sell in which markets.

Therefore those companies that embrace the concept of sustainability and integrate it into their operations, policies and marketing can help drive consumer demand towards products and services that do not place disproportionate burdens on natural systems and help rather than hurt local communities around the world. But in order to get to that point, we need to understand what influences companies to consider sustainability as an important concept in their overall business planning, as well as the risks and opportunities this trend represents.

There are four primary categories of drivers for why companies may choose to participate in the trend towards sustainability.  Any company participating in this trend is motivated by at least one of these drivers, and in most cases all four play a role to varying degrees. These drivers do not operate in isolation and they are certainly influenced by the other drivers. But they each can play a very important role in shaping the overall sustainability strategy of a particular company and thus need to be understood in detail.

The first driver is the legal environment that a company operates in and is regulated by. This environment includes regulations that are currently in place in most countries such as basic environmental protection laws that protect water and air resources, those that regulate the use and disposition of hazardous substances, laws that govern corporate finances and accountability, and rules on safety and wellbeing of workers. Interestingly, regulations that are not currently in force, but look likely in the future, also play a role in driving companies to adopt new marketing tactics and strategies.

An example of this is carbon regulation. While laws that limit or prescribe carbon emissions are not yet universal, many companies particularly in the United States, perceive opportunities in marketing themselves or their products as “low carbon”. Whether they do so based upon actual legal requirements or in anticipation of eventual legal requirements, many companies are choosing to communicate their compliance with these laws as a special attribute that sets them apart from their competitors.

The second driver for the “greening” of companies arises from the efficiencies and cost savings that can sometimes be realized by streamlining manufacturing and other business processes.  In some cases, material inputs can be significantly reduced, energy required to perform certain processes can be decreased, and/or waste streams can be minimized. Each of these factors can usually be monetized and thus help contribute to the improvement of a company’s bottom line performance.

The third driver come from the people that work within a particular company. A CEO or a board member, for example, may decide that operating their company in an environmentally and socially responsible manner is simply how they want to do business. They may be influenced by some of the other drivers discussed here, but frequently they are motivated by a higher sense of “doing what is right” for society, for their own families or their communities. Equally influential, is when employees of a particular organization pressure the management to implement programs and practices that improve the environmental and social performance of their company. In fact, many companies now believe that having sustainability policies in place are central to their ability to attract and retain employees, particularly younger employees.

The fourth, and at times the most important driver is demand from customers. Customers, be them individuals or corporations, are increasingly demanding a certain level of responsibility and accountability from those with whom they choose to do business. Many companies like Wal-Mart  or Swiss retail leaders COOP and Migros have made headlines in recent years by pressuring their suppliers to conform to certain basic standards relating to environmental and social performance. Many of the vendors saw no choice but to comply or otherwise risk seeing one of their largest customers take their business elsewhere.

On a smaller scale, many individual customers are seeking to do business with companies that have an established and articulated policy regarding some aspects of corporate sustainability. The Natural Marketing Institute, a market research firm in the United States, has reported that as much as 25% of the consumers in the United States prefer to do business with companies that are respectful of the needs of society and the environment. Based on this and other data, clearly customers can be potentially powerful shapers of the market, and a driver of new efforts to market products or services in new and engaging ways.

Companies that choose to participate in the trend towards “green” and “responsible” must be careful to not overstate the benefits, or understate the impact of their products or services. Because of the greater level of attention consumers are paying to this topic, they are an increasingly sophisticated audience who can frequently identify when companies are making claims that are not supported by available data. At the same time, the instantaneous communication and transparency that is enabled by the internet makes making unsubstantiated claims quite risky, as any erroneous or deceptive claims that are made will be immediately broadcast far and wide to a large number of current and potential consumers. 

But when companies are able to legitimately claim that their business and/or the products they sell are themselves sustainable, there are, in many cases, rewards to be reaped. This is particularly true when the products or services not only adhere to higher level aspirations of sustainability and “doing the right thing”, but they help the customer become more efficient, reduce their exposure to risks, and ideally, save money. In the current economic context, many consumers are seeking ways to save money. By definition, many sustainable products and/or services help them do exactly that.

Where the marketing task becomes tricky for the producer of a particular good or service is when that good or service is more expensive, at least in upfront costs, then a less sustainable alternative. This is a case where marketing communications plays a central role in delivering a message that describes how efficiency typically means reduced operating costs on the technical level. Communication of social aspects such as safe or fair production must address clearly to the consumer values and desired meanings related to the product. This dialogue has already been introduced to the purchasing public in the case of hybrid vehicles, energy efficiency improvements in homes or organic food products.

While these products typically require a price premium over equally functional alternatives, they do result in lower life-cycle, operational costs or enhanced quality. Many people have demonstrated a willingness to pay this premium and thus there are clear opportunities for corporations and brands who are understand this and have at their disposal marketing and communications experts to support them. While the long-term influence of the current economic situation can only be guessed at the moment, brand loyalty which can be increased by a “green” and “responsible” image, will likely prove critical for the ability of corporations to survive and even thrive in the coming months and years.

Contributed by Dr Stephan Lienin, Sustainserv in Zurich and Dr Matt Gardner, Sustainserv in Boston