Sustainability: the hidden role of brand

Covid-19 and climate change have exposed the need for long-term sustainable solutions offered by brands. However, because most brands are approaching sustainability in similar ways, they risk generating undifferentiated content, multiplying investments, and diluting the strength of their brands in an effort to pursue ever-higher standards. This is risky since brand should instead be the real driver of differentiation.

Approaching sustainability through the lens of brand can provide the answer. Brand-led sustainability infuses a brand’s essence and differentiating values into every action that it carries out related to sustainability, thereby transforming doing good into a competitive advantage. In this way, sustainability can become a source of preference, brand value and ROI.

The crisis has accelerated the need to take action to generate change

The call comes loudly from all stakeholders – from consumers, to employees to investors – everyone expects more. In the social void often left by politics and institutions, we find ourselves looking to brands to lead the way: not only in guiding our consumption habits, but in shaping our day-to-day behaviours, and even in solving the world’s problems. Indeed, 90% of GenZ believe that brands must intervene on social and environmental issues (Porter Novelli I Cone, 2019), while 62% of global consumers do not think that their country will be able to overcome the Covid-19 crisis without them. The Edelman Trust Barometer even suggests that brands play a “critical role” in the fight against the virus (Edelman Trust Barometer, 2020). Undeniably, action on sustainability is no longer a ‘nice to have’ for brands: it is a societal expectation.

Doing good is good for business

This recent pressure on brands to embrace sustainability – which in its truest meaning includes social and environmental objectives highlighted by the UN’s 17 Sustainable Development Goals – should be read as the biggest growth opportunity for brands, even from a business point of view.

Certainly, it is proven that sustainable business models generate potential opportunities worth $12 trillion (WPP Sustainability Report, 2018) and that sustainable brands not only grow faster, but are also often the main proponents of a company’s overall growth (Purpose 2020 Report, Kantar Consulting: Unilever Sustainable Living Report, 2018).

To truly tap into this growing space – meeting consumer expectations and seizing business opportunities – brands must walk the talk. They must make real, tangible and concrete impact, taking a strong position on the main social and environmental issues and following up with action.

And as standards continue to rise and brands are called upon to respond to an increasingly complex series of environmental and social policies, it is essential that they continue to update, adapt and evolve to remain relevant in the eyes of consumers, and to avoid reputational crises and sanctions.

Being compliant is not enough

Sustainability has provoked – in the first instance – a race to meet ever-shifting compliance standards. Certainly it is commendable that a growing number of organisations globally are engaging and implementing programmes and initiatives to prioritise sustainability: these actions are paving the way towards a more sustainable world, and brands that take these steps should be recognised for their efforts.

However, most brands are approaching sustainability in an undifferentiated way, chasing only compliance in the eyes of consumers and regulators. There are few initiatives and positions taken by brands that, once communicated, are really noticed, remembered, or that provide differentiation for the brand. Indeed, where everyone repeats the same promises (eg: committing to reduce carbon emissions to net zero, or adopting 100% recyclable packaging), we are left with a “green sea of sameness”, wherein sustainability becomes more a necessary cost than a profitable investment, while at the same time eroding the uniqueness and distinctiveness of the brand.

Without differentiation, a vicious cycle is triggered

Brands increasingly find themselves in a vicious cycle: as investing in sustainability continues to be an imperative to maintain relevance, standards rise, consumer expectations continue to grow, regulators clamp down, and brands are forced to react to the shifting standards. What was relevant until yesterday, today becomes a requirement: taken for granted, with consumers rarely willing to pay more for more sustainable products and services.

The severity of this cycle has been worsened by the era of crisis triggered by Covid-19 that we now find ourselves in: while on the one hand, most consumers declare a propensity for sustainable products and services, on the other, none of them will accept a price increase to compensate for investments in brand sustainability.

In this scenario of limited differentiation among the category, the only true criteria for distinguishing one brand from another is its price – in turn leading to continuously eroding margins.

Once again we will save the brand by generating ROI

The key to success is to stand out in the green sea of sameness. How? Through brand, which until now has been the overlooked piece in the race to sustainability. Brand drives differentiation, thereby guiding consumer choice and generating value. To seize business opportunities, therefore, brands must not only be relevant, do good and communicate it, but must do good in their own way: a unique, characterizing and differentiating way.

Rather than a simple means of conforming to regulations and expectations, sustainability – if intrinsically connected to the brand – can become a competitive advantage, generating preference, brand value and ROI.

Brand-led sustainability

Adopting a “brand-led” approach means that every sustainable action, initiative and pledge is carried out through the differentiating lens of brand. In other words, brand and sustainability become intwined, such that all sustainability activities are unique, consistent, memorable and instantly recognisable to the brand.

An example of brand-led sustainability in action is WeDo, Coty’s first sustainable-native beauty brand. Sustainability is infused into the brand at every level and across every touchpoint: from the cruelty-free formulations of the products, to the packaging made entirely with recyclable materials, to the website designed to work with the least possible expenditure of energy.

Similarly, the International Volleyball Federation have been highlighting the problem of ghost nets (discarded fishing nets recovered from the ocean cause significant harm to the sea floor and marine animals) in a hugely innovative and brand-led way through their ‘Good Net’ Project: transforming the ghost nets into beach volleyball nets. Not only is the organisation acting for good, but they are doing so in a unique and ownable way.

In this way, when an organisation brings their sustainability commitments to life in a way guided by the differentiating effect of their brand, they will not only boost relevance, but will also increase their business value and ROI.

Think like a consumer

Take a test: how many commitments, statements or concrete actions devoted to sustainability can you actually name? And could you correctly attribute them to the brand that promoted them?

If your answer is less than three, then we must ask: how useful are the efforts undertaken to communicate sustainability if they do not contribute to building brand differentiation?

Ensuring that investments in sustainability – and related communications – deliver tangible results for a brand’s strategy and business is essential. Through a data-driven approach, it is possible to optimise the a brand’s sustainability portfolio and activities to focus attention on the initiatives capable of generating the greatest long-term growth and differentiation. Indeed, a combination of quantitative and qualitative analysis can help to reveal the tangible importance of sustainability on a brand’s value, measure the category drivers, assess the impact of sustainability initiatives on the morale, attitudes and behavior of employees within the company, and highlight how sustainability can have a positive impact on the themes of differentiation, relevance and overall value of the brand.

To conclude: Sustainability can be much more than a strategy to maintain relevance and comply with shifting standards. The key starting point is brand.

Through a brand-led approach, doing good can be transformed into a competitive advantage.

5 questions that Brand-led sustainability can answer:

  1. What should my sustainability brand strategy be?
  2. How can I create or optimise sustainable initiatives and actions without running the risk of being accused of greenwashing?
  3. How can I achieve leadership status in sustainability?
  4. How can I use sustainability to increase and strengthen my brand’s ability to differentiate itself?
  5. How can I use my sustainability activities to increase revenue and margins?

This article was first published on HBR Italia