Can a company or brand be truly sustainable and ethical while also contributing to the all important bottom line?
The answer is somewhat complicated.
Renewable energy targets, ethical sourcing and zero-deforestation policies have become more common recently as consumers and investors hold companies more accountable for their actions and supply chains.
To the optimistic amongst us it seems like big business has finally woken up to the important issues of our time – climate change, social inequality, human rights – and decided to take a stand.
On the face of it this is a good thing, right? Well that depends on where you stand.
Many consumers and large sections of the NGO community inevitably question whether these commitments are more cosmetic marketing than genuine attempts to tackle serious issues.
Doubts persist that eco-business promotes the sustainability of big business, not the sustainability of life on earth.
From a big business perspective it can seem as if the goal posts of what constitutes sustainable and ethical are constantly moving. Today’s poster boy for ethical cotton sourcing can be tomorrow’s environmental villain.
Unfortunately this means sustainability can often be put in the ‘nice to have’ basket as opposed to the ‘must have’ where it belongs.
Building the business case
While ethical consumerism is renowned for it’s unpredictability, trends in recent years have shown that consumers are beginning to put their money where their mouth is.
Research conducted in 2014 by Fairtrade Australia & New Zealand found consumers place a higher priority on purchasing products that support people in need, assuming product price and quality was similar.
Supporting animals or the environment also ranked highly, with 77% of shoppers indicating they were more likely to buy products that supported these causes.
And, according to Boston Consulting Group, responsible-consumption products will account for 70% of total grocery growth in the US and Europe over the next five years.
But what does this mean for society?
The trends pointing large multi-nationals towards the growing ‘ethical’ consumer market are also driving revolutions in global supply chains.
Take deforestation for example. Over the last couple of years – largely due to consumer pressure – some of the world’s largest agri-businesses, palm oil producers and pulp and paper manufacturers have made clearly defined zero-deforestation commitments.
This is a good thing because, depending on who you listen to, deforestation accounts for between eight and 20 per cent of the worlds carbon emissions.
While these commitments won’t solve the issues of deforestation and climate change single handedly, they will go a long way towards reducing carbon emissions and protecting endangered species like the orangutan and Sumatran tiger.
Building a rich culture with your brand’s ideals
While environmental gains and market opportunities are some of the more obvious upsides of an ethical brand, some of the other benefits are a little more nuanced.
Sure, a well thought out sustainability plan can help successfully communicate what a brand stands for, drive social impact, improve reputation and help retain and recruit employees. But it can be so much more than that.
When done properly an ethical brand can help marry image and behavior to shape the entire DNA of an organisation. It can create a culture that is rich with a brand’s ideals and drive exceptionally high levels of consumer engagement.
So what is the bottom line?
While the data supports the premise that it is possible to make integrity pay its own way, it is not always easy to achieve. It’s often said that a brand for a company is like a reputation for a person. You earn reputation by trying to do the hard things well.
This fits particularly well with the issue of ethical brands. It’s not easy to do right, but then anything worthwhile rarely is. And, if done well, the benefits can be immense for both society and the balance sheet.