Collaboration & Co-Creation

This Is No Time for a 'Sustainability Recession'

Even with the headwinds to come, there will likely be a renewed focus by companies invested in curbing their climate impacts to ensure their long-term competitiveness and resilience. Perhaps now is the time for your company to move a step ahead of competitors that have chosen to hit the pause button.

Brand Provided | By Michael Stausholm | Published 3 weeks ago | About a 4 minute read

Image: Yunus Tuğ

The other day, I read an interesting article by the American author and speaker Andrew Winston in Fortune. It discusses "the corporate sustainability slowdown," which refers to the fact that many companies have scaled back their sustainability efforts — shifting from doing as much as possible to doing only what's necessary.

This is where I came across a term that perfectly described what I’ve been experiencing in my own company and what I hear from others. We are in the midst of a “sustainability recession.”

Normally, a recession refers to a significant decline in economic activity; but in this context, we are talking about a downturn in sustainability efforts within the corporate world.

The potential reasons for this are numerous:

Uncertain times causing companies to cut back on expenses: wars in Ukraine and Gaza, a critical election in the US, inflation
Higher reporting requirements: Contrary to the expectation that stricter sustainability reporting demands would lead companies to do more, the increased bureaucracy seems to be dampening additional initiatives.
A short-term, "cut to the bone" approach that views sustainability not as a long-term investment in the bottom line, but as decoration that can be trimmed until the storm passes.
Increased focus on price over quality (just look at the rapid rise of Temu, Shein and other bargain retailers)

A sustainability recession is, of course, bad news for the climate — as companies play a crucial role in curbing climate change. But now that it’s here, we must make sure to use this time optimally and aim for it to be as short as possible.

Even with the headwinds to come from the incoming US administration, there will likely be a renewed focus by companies invested in curbing their climate impacts to ensure their long-term competitiveness and resilience. Climate reporting is not going away — quite the opposite: If you don’t have your data in order, it will cost you competitive advantages to others who do. Perhaps now is the time for your company to move a step ahead of competitors that have chosen to hit the pause button.

The increase in greenhushing — keeping silent about their sustainability efforts and progress — among companies stems from a fear of overstating their progress, overpromising or coming across as boastful. However, communicating your company’s ambitions, progress and milestones transparently is crucial to overcoming the current sustainability stagnation. When you hear about other companies’ ideas and initiatives, it can inspire you to do the same or more — or at least prompt you to act out of fear of falling behind.

Like many other companies, we at SproutWorld must adapt to the reality we are part of. However, we are doing so without compromising the sustainability that is part of our DNA. This means, for example, that we continue with our forest project in Poland — where we planted 12,000 trees last year — and we renew our B Corp certification.

Additionally, we have just invested in a new certification for our plantable makeup — Leaping Bunny — which opposes animal testing in makeup and skincare products. This is something that is banned in the EU but not in the rest of the world — including in China, where Temu and Shein typically produce their products.

The increased focus on price is something I’m experiencing in the promotional products industry, where our plantable pencils compete with plastic pens produced in China. There will always be those who prioritize price and quantity over quality; but thankfully, we are seeing more companies buying fewer promotional products but of higher quality. They have adjusted the criteria for when a giveaway makes sense, in return for giving something of value to the recipient that doesn’t burden the climate.

Although we notice that customers take a bit more time to think before making purchases, we also see an increase — especially among larger companies — in inquiries about our certifications and CO2 emissions. They want to ensure that what they are buying is as sustainable as it appears and fits with their long-term sustainability strategy.

I see this as a step toward the mindset shift that we so desperately need if we are to remain relevant and resilient, and not merely keeping our heads above water.