For many brands, 2020 was a year of reacting — to the pandemic, the racial
justice protests, and the worst global economic crisis in at least a decade. As
hope emerges that normalcy may be near, sustainable and ethical companies will
have to once again be at the forefront of redefining growth — and ensuring that
regenerative, equitable solutions are at the forefront.
That was a common theme during Sustainable Brands™ (SB)’ 2021 Trend
Watching
virtual event on Tuesday — with participants representing brands, civil society,
and entrepreneurs from across the US sharing insights on a variety of timely
topics.
The latest on purpose- and stakeholder-centric leadership
2020 was not exactly characterized by great news; however, in the wake of great
challenges, some positive trends have emerged that give reason for optimism
regarding positive purpose and stakeholder focus. In fact, according to
Dimitar Vlahov, SB’s Sustainable Business & Brand
Transformation Expert, reflections on last year’s crises may be leading up to
what he referred to as the "Great Restart" or the "Great Reset." In a recent
Harris poll, 85 percent reported an increase in empathy, 89 percent want
companies to 'hit reset' and be more stakeholder-centric, and 84 percent 'will
remember' how stakeholders were treated during the pandemic.
So, with these optimistic trends, is regenerative thinking on the verge of going
mainstream? Is this the tipping point we have been waiting for when companies
are prepared to shift their mentality and practices towards true sustainability
and positive purpose? According to VeraWorks founder and president Bea
Boccalandro, we have a unique opportunity to do just that as the pandemic and
other social and environmental crises have boosted empathy, awareness and desire
to drive change. She further noted that responsibility and desire to drive
change is now extending past the Chief Sustainability Officers — and making CSR
champions out of
CFOs,
CMOs and beyond.
However, although the current momentum and trends may be changing the
perspectives of a diversity of stakeholders, there is still much time-sensitive
work to be done. It is imperative that we fully capitalize on and seize this
moment, as people are more ready than ever to use their roles to drive change.
In her new book, Do Good at Work, Boccalandro emphasizes how
anybody in any position can integrate sustainability into their jobs and drive
change.
HIP Investor CEO Paul Herman then described how the five crises of our
time (health, wealth, earth, equality and trust) demand three main items to
drive positive purpose: new
metrics, innovative
investing, and multi-sector solutions. There is a need for new, innovative
metrics to help measure impact and stakeholder value
creation,
but also act as indicators of change or the gap between policy and impact. Next,
we need innovative investing to not only help drive change, but also to drive
better financial
performance
— as sustainable top performers have been proven to generate better earnings.
Further, appetite for sustainable finance products is growing fast; ESG and SRI
products have recently reached $40 trillion in assets under management, with no
signs of slowing down. Finally, we need multi-sector solutions and to evolve
past public-private partnerships to multi-sector
partnerships,
where diverse stakeholders collaborate to drive solutions that benefit society
as a whole.
The search for truth, trust and wellbeing in our digital lives
With all the misinformation circulating these days, there seems to be a growing
disconnect between narratives and reality, paired with a growing lack of public
trust. Vlahov posed the question: How can brands gain and build trust in this
‘post-truth’ society?
Jason Burnham, founder of strategy firm Culture
Design, pointed out that targeted advertising and
algorithms that once sold products have evolved to sell ideologies, and may have
diverged from reality in the process. To combat this divergence, we need a
strong consensus of what the facts are, to align around common truth and
science, and drive this at the educational level. Secondly, we need to broaden
the scope of what it means to be a sustainable company to encompass
truthfulness, the allocation of resources, and honest communication. For
example, it should be the responsibility of companies to ensure that they are
not investing in the spread of misinformation, and that all business decisions
are in line with the values they
communicate.
Burnham emphasized that this will require both top-down and bottom-up
approaches.
Wilhelms Consulting Group founder Pamela Wilhelms built on this, adding
that becoming a more truthful and trusting society will require more than a
shift in resource allocations — but a shift towards regenerative thinking and a
deepening of core values. She explained that people are ready to change personal
purpose and improve the integrity of our systems, and most are more motivated by
hope than by negativity. She then added that these changes must occur at the
cellular level; just as humans become sick and healthy at a cellular level,
C-suite decisions often bend to pressure at local levels, and this can lead to
larger systematic changes.
Brands impacts, and missed opportunities, for fostering consumer behavior change
Etienne White, VP of SB’s Brands for Good
initiative, presented key insights from its 2020 Socio-Cultural Trend Tracker
survey
— which surveyed 1,000 consumers from the US regarding their attitudes towards
sustainability, and their opinions on what brands are doing to help them achieve
their personal sustainability goals. Key findings included:
-
71 percent of consumers responded that social and environmental issues are
equally important.
-
There is bipartisan preference for sustainable products; 79 percent of
responding consumers — 89 percent of liberals and 74 percent of conservatives
— agree that they would switch to a more sustainable brands if all other
attributes were equal.
-
Most consumers could not name a brand that is going above and beyond on
sustainability issues; and, when specific brands were called out,
companies such as Patagonia and Nike had significantly fewer
mentions than Amazon, despite their strong environmental and social
messaging.
-
For certain issues, there seems to be a gap between consumers who are
willing to change their behavior and those who feel that brands are helping
them achieve their aspirations. For example, while 67 percent of consumers
said that they would be willing to eat less meat, only 33 percent responded
that brands and companies are helping them do that.
-
When asked about the most common barrier to sustainable living, the most
common response (43 percent) was that it’s too expensive.
The findings point to a variety of potentially missed opportunities for brands
to influence more sustainable consumer habits and lifestyles. White invited
attendees to download the
report or reach out to her
directly to learn more.
2020 changed marketing forever: Marketing to Gen Z
Jeff Fromm, president of FutureCast and partner at Barkley,
literally wrote the book on marketing to Gen
Z. At Trend Watching, he offered
some key insights into the matter — and how 2020 has forever changed the
perspectives of this critical consumer group. He began with a brief
characterization of generations and the major events that shaped their identity:
While Boomers were heavily influenced by events including the Vietnam War,
Woodstock, and the civil rights movement; Gen Z is influenced by things such as
COVID-19, marriage
equality, and the rise of populism. He then went on to explain that while
generations are far from homogeneous cohorts, Gen Z can be characterized as
having a tremendous appetite for social
justice,
old souls with complex worldviews, and a strong focus on the future. Further,
they intentionally train algorithms like puppies to retrieve what they desire;
however, they are more reluctant to share data with brands they don’t trust.
To effectively market to Gen Z, transparency is the price of admission and
social neutrality is a failing brand
stance.
While Gen Z gets a reputation for being disloyal, they are far from it. They are
in fact discerning, and they "day trade" up strong brands that address the
issues they care about, and they pay premiums for the brands that reflect their
values.
Fromm then introduced the concept of the “Purpose-Profit
Cycle,”
which is being implemented by the best-in-class brands that resonate with Gen Z:
Lasting consumer behavior change remains a holy grail for brands
Despite the daunting challenges ahead, many participants expressed hope for the
future. One key driver is the aforementioned emergence of millennials and Gen Z, whose purchasing decisions are driven by authenticity and
sustainability. As examined earlier in the day, the choices they make — and how companies respond — will shape not only companies' longevity but societal health.
Take, for example, shifting our food
system
from one that is wasteful and input-intensive to one that is sustainable and
local.
This is often cited as necessary for planetary and human health, but changing
diets and habits is tough — though there is evidence that younger generations
are leading.
“Millennials are parenting completely differently when it comes to climate
sustainability. Food is a great example ... The younger you are, the more
plant-based you
eat,”
said Jessica Appelgren, VP of Communications at Impossible Foods. “Changing the food system is going to take a generation to manifest.”
Effective approaches to meaningful goal-setting
In another session, participants dug into how goal-setting can help brands make
actionable, measurable plans when it comes to critical environmental thresholds.
Taking a science-based approach can help companies scale up action, said Kevin
Moss, the Global Director of the Center for Sustainable Business at the
World Resources Institute.
“Knowing what a company needs to do to meet science-based
targets
often leads to a conclusion that incremental improvement will not be sufficient,
and innovation is going to be needed,” Moss said.
One area that needs more attention — and funding — is oceans. The plastic
crisis
has garnered a lot of attention over the past few years; but thus far, not
enough is being done to stem the production or flow of single-use plastics into
waterways. According to Lina Constantinovici, founder of Innovation
4.4, this is part of a larger gap when
it comes to ocean health overall — as UN Sustainable Development Goal 14,
which focuses on Life Below Water, is next-to-last when it comes to
funding.
“Healthy oceans are a pre-competitive condition that are necessary for both
addressing climate change and enabling commerce and economic prosperity,”
Constantinovici said. This will require scaling up collaboration between
competitors. “All oceans issues must be addressed collectively.”
Avoiding contradictions between branding, CSO and government affairs
Increasingly, sustainable brand leaders recognize that effective public policy
will be critical in establishing "rules of the game" that foster sustainability
at scale. Yet, historically, CMO, CSO and Government Affairs functions have
operated independently — and, too often, in silos. Recent reports show that many
leaders are not fully aware of their company’s public policy activities, and do
not have mechanisms to ensure they are aligned. In an environment of increased
public scrutiny and distrust, how can organizations avoid costly and
embarrassing contradictions between their political activities and their stated
brand promises or CSR/ESG commitments? How can they address the challenges of
supporting the public policy needed for the transition to long-term
sustainability at scale?
Elizabeth Doty — Director of the Corporate Political Responsibility
Taskforce
at the University of Michigan’s Erb Institute for Global Sustainable
Enterprise — described this issue as today's "blind spot in brand thinking,"
similar to how supply chain risks used to be for brands. While it is no easy
task to be completely consistent among competing business interests and
imperfect internal communications, contradicting your CSR commitments with
political alignments is a major source of mistrust and damage to reputation.
Further, an otherwise-stellar track record of adhering to brand values can be
called into question with one inconsistent
misstep.
Climate Voice founder and ED Bill Weihl described how climate
contradictions are one of the most common forms of such risks. For example,
during the recent election, many companies emphasized the need for strong
climate
policy,
while funding candidates who were climate deniers.
So, how can brands avoid appearing hypocritical in these complex modern times of
increased political and environmental awareness? Doty says that CSR needs CPR
(Corporate Political
Responsibility).
This will require participation for government stakeholders and a clear mandate
attached to CSR commitments. Further, companies need to change their scope of
materiality to include their sustainability agenda, and foster better internal
communication — and most importantly, they need to change their systems thinking
to form a clear view of the holistic value they bring to society (their license
to operate), and act accordingly and consistently.
Brands can implement CPR through:
-
Transparency: Do we disclose political activities to relevant
stakeholders?
-
Accountability: Are our political activities aligned our values,
purpose, and commitment to all stakeholders?
-
Responsibility: Do our political activities support the system on which
markets, society, and life depend?
When it comes to climate issues, Weihl emphasizes that companies need to
recognize and adopt the perspective that climate change is an existential
threat to their
business,
and act accordingly. This is especially important as their employees
increasingly see it as threat to their own futures.
The path to ‘stakeholder capitalism,’ social justice and equity
Customers are important to brands; but 2020 also raised awareness of the
importance of being proactive when it comes to ensuring their employees,
especially those who work far from corporate headquarters, are compensated
fairly. That, according to Lorraine Wilson, Managing Director Investment
Products at JUST Capital — a nonprofit that measures and ranks companies on
the issues Americans care about most — has thus far been lacking.
“Too often, workers are seen as a cost center, and not as this valuable group
that is supporting the company,” Wilson said. “Almost 50 percent of workers at
Russell 1000 companies are not able to make ends meet — 10 million American
workers.”
The pandemic, which came alongside a massive shift in wealth towards the
richest,
only accentuates the need for companies to directly address the livelihood gap.
Wilson emphasized that there needs to be a shift in thinking, in which companies
recognize the value of workers, and that there are win-win solutions.
“Companies can address all of their stakeholders' needs, and still remain
profitable,” she added.
Another critical challenge will be the climate and environmental crisis. 2020
was expected to be a year of progress, but with COVID-19 causing both COP26 and
the UN Summit on Biodiversity to both be canceled, that was not to be. Still,
the horrific
fires,
powerful
cyclones, and
historic
flooding
demonstrated that climate solutions are needed now.
While introducing B Lab’s Climate Justice Playbook for
Business,
Ellonda L. Williams — the organization’s Director of Justice, Equity,
Diversity and Inclusion — emphasized the oversized role that businesses play as
the world’s primary source of greenhouse gases; and therefore implicit in how
the climate crisis disproportionately affects black, indigenous, and people of
the color the
most.
“This resource calls on the global business community to make a fundamental mind
shift from exploitative approaches that perpetuate climate injustice, to
equitable and regenerative ones,” Williams said.
2020 was a watershed year for human health, climate, and justice; and saw an
unprecedented rise in corporate commitments and pledges. Now, it’ll be up to
brands to act and ensure their words lead to real action towards a more
equitable, sustainable future for everyone.
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Media, Campaign and Research Consultant
Nithin is a freelance writer who focuses on global economic, and environmental issues with an aim at building channels of communication and collaboration around common challenges.
Max Pinnola is founder of GreenStream Sustainability Consulting.
Published Feb 26, 2021 1pm EST / 10am PST / 6pm GMT / 7pm CET