Sustainable Business Practices for Brands: the value of transparency

In light of the latest Intergovernmental Panel on Climate Change report (IPCC, 2022) highlighting the increasing evidence of degradation and destruction of our ecosystems by humans, and in an effort to escape the societal pressure to take action, brands are bombarding consumers with sustainability-related content.

From terms like "sustainable", "eco-friendly", and "green" to "climate neutral","carbon zero", or "biodegradable", the topic of sustainable business and products is on everyone’s agenda.

But what if despite the carefully curated social media posts, website entries, and ESG reports, consumers are more lost than ever?

The importance of sustainability for the consumer 

A recent study from Appinio on the topic of sustainability has shown that for 46% of all participants, it is important that the company or brand they choose to buy from is committed to environmental causes. 

Furthermore, 35% believe that consumers should be followed on environmental issues.

The solution seems fairly simple: engage in more market research and include the Voice of the Customer (VoC) as much as possible during product development—ideally complemented by a range of iterative feedback loops to ensure that one stays on the right track regarding consumer sustainability demands.

In reality, the issue at hand is much more complicated. 

The scientific knowledge required to understand many environmental issues is often complex to follow and subject to rapid change.

Common examples are the pressures on organizations in the automotive industry or fast-moving consumer goods (FMCG) industry to move away from fossil fuel or plastic packaging based on fossil fuels, and go towards electric vehicles or paper and cellulose packaging. Where these comparisons are made limited to a single environmental benefit (i.e., in this case, the utilization or prevention thereof of fossil fuels), the claim is ultimately incomplete and misleading (Furlow, 2010).

If you are interested in more insights on the FMCG industry and sustainability, have a look at Appinio’s FMCG Guide 2022 for the British market. 

Current brand sustainability practices 

If a systemic view of sustainability (comparable to the theories of systemic value or ecological economics) is applied, the use of plastic might be seen as the most sustainable packaging material, considering aspects such as production, resource usage, longevity, and prevention of food waste. However, due to the increasing appropriation of greenwashing as a business practice to alleviate external public pressures, avoid conflict with external constituents, and maintain corporate legitimacy (Guo et al., 2014), the consumer's confusion about what is actually sustainable is no surprise. The consumer cannot be held accountable for sheepishly following attitudes held by others. With modern day consumerism clad in whatever greenwashing best practice is currently en vogue, consumers are caught in the crossfire of positive advertisement of climate neutral certified products and services and its criticism. They have to decide whether to believe what is marketed or educate themselves on the practices to understand that certificates are earned by temporal carbon removal, e.g., reforestation projects instead of reducing overall emissions (Bock, 2013). 

Three essential steps to engage in sustainability as a brand / company

While the situation might be difficult to navigate for both brands and consumers alike, there are essential practices that could lead to developing a solid engagement strategy concerning sustainability.

1. Acknowledge your customers frustration
   Sustainability is a highly emotional topic. As a brand aiming to have a meaningful relationship with your customer, it is imperative to acknowledge their feelings, which could range from disbelief and ignorance to confusion. 
   
   
2. Leverage your brands sustainability practices to educate consumers
   Brands need to understand that corporate sustainability is not a tool to appease consumers' perceptions of whatever sustainability is, but rather it could be utilized to educate their customers on why true sustainability actions may not align with what has been broadcast in mainstream media thus far. 
   
   
3.  Engage in meaningful communication about your brands sustainability efforts
   It is arguably necessary for brands to stay true to sustainability, even at the cost of temporary confusion in their customer base. Ideally, that confusion can be turned into a solid understanding of true sustainability practices. However, it is vital to maintain and foster this relationship as the topic of sustainability, as mentioned above, is subjected to rapid change and, hence, this continuous development needs to be accounted for by organizations.

A useful example of these three steps would be the sustainability practices of the German food commerce brand KoRo, which focuses on selling durable foods in bulk. While, according to mainstream sustainability knowledge, it stands to reason for them to have paper packaging, they have decided against it and have focused mainly on conventional plastic packaging. Their consumers were questioning their reasons quite regularly, so KoRo decided to answer common questions on their sustainability practices – or from a consumer’s perspective, lack thereof-on their website. They explain that packaging often helps to reduce food waste, and if that is the case, the environmental benefit from avoided waste is usually five to ten times higher than the environmental cost of packaging (Ein Leitfaden für Verpackungshersteller, Lebensmittelverarbeiter, Handel, Politik & NGOs, 2020). While KoRo’s effort to correct their consumers' perception of their efforts might seem subtle, it shows how necessary practice takes precedence over best practice regarding sustainability. Additionally, through their method, they are also performing educational work and paving the way ahead, not just for brands but for the everyday consumer.

Conclusion

Overall, many brands, and subsequently their consumers, are still deceived by common ideas of sustainability and need to move ahead and look at what needs to be done for a viable and sustainable future. Commonly received best practice might work in the short term, but only necessary practice will prevail.

References:

Ein Leitfaden für Verpackungshersteller, Lebensmittelverarbeiter, Handel, Politik & NGOs. (2020). [online] Available at: https://boku.ac.at/fileadmin/data/H03000/H81000/H81300/upload- files/Forschung/Lebensmittel/Leitfaden-Lebensmittel-Verpackungen-V1.pdf. 

Guo, R., Tao, L., Yan, L., Gao, P. (2014). The effect path of greenwashing brand trust  in Chinese microbiological industry from decoupling view. Indian J 10(7):1827–1831 

IPCC (2022). Working Group II contribution to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. [online] Available at: https://www.ipcc.ch/report/ar6/wg2/downloads/report/IPCC_AR6_WGII_SummaryFor Policymakers.pdf. 

Furlow, N. E. (2010). Greenwashing in the new millennium. The Journal of Applied  Business and Economics, 10(6), 22.