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Economy

Sustainability and the worrying consumer-company gap

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As sustainability moves centre-stage across the world, a global study indicates a worrying communications gap between consumers and companies.

It underlines the urgency and importance of business leaders in the C-suite to find better ways to develop sustainability strategies that chime with consumer expectations, needs and hopes,

From Marketing to Mattering, a study of 30,000 adults across 20 countries on five continents, finds that 72% believe that business is failing to live up to expectations.

This surprisingly large majority of the adults polled believe that business is failing to take care of the planet and society as a whole.

Interestingly, in economies with a large, emerging middle-class, people are less sceptical and public confidence is significantly greater: two-thirds of respondents in Nigeria and India, for example, believe that business is playing its part.

The report by management consultancy Accenture and Havas Media RE:PURPOSE, a communications and marketing company, follows up the UN Global Compact-Accenture CEO Study on Sustainability published last autumn, in which two-thirds of CEOs admitted their companies were not doing enough to address sustainability challenges.

The study identifies:

– What consumers expect from business and other institutions
– What sustainability means to their choices and attitudes
– How sustainability issues influence their purchasing decisions
– How superior performance on sustainability can better engage consumers, driving value creation and genuine competitive advantage

As the current study points out, consumers have been consistently identified by business leaders as the most important stakeholder in guiding their action on sustainability.

But chief executives are finding challenges in interpreting consumer signals that add to the difficulties in embedding sustainability at the core of business and across varied global markets.

And it is the emerging markets that will define commercial success for most companies over the next 20 years.

The study authors say, “Consumers expect more from companies, from greater honesty and transparency to greater impact on global and local challenges and a more responsible stewardship of natural resources and the environment.

Yet among business leaders there is a sense that companies have failed to engage the consumer on sustainability; that companies’ reputation and performance on environmental, social and governance (ESG) issues are not informing consumers’ purchasing decisions; and that industry leaders on sustainable business practices are not being rewarded by the market.”

The study underlines that people think business is as accountable as governments for improving their lives. From the optimistic countries in Asia, Africa, and Latin America to the more despondent consumers in Western Europe and North America, there is an expectation that brands and companies should impact positively on lives.

And the degree of people’s optimism correlates directly to their level of expectation of how business can improve their quality of life.

In countries where respondents are optimistic and express high expectations of business, consumers are more likely to consider sustainability in their purchasing decisions and actively seek information on sustainability performance.

The study authors also say, “Consumers worldwide identify critical challenges – job creation, economic growth, pollution, clean energy, ending corruption etc – for businesses to address. Consumers (81% of respondents) expect more from their expenditure than the acquisition of products and services – and this is affecting their perception that companies are failing (42% believe that) to meet their expectations.”

Clearly, people are demanding leadership from brands to meet the most pressing human and environmental challenges, which reinforces our view that all companies cannot wait for consumer demand to drive their actions: people expect business to take the lead.

As Joel Makower, chairman and executive editor of GreenBiz Group, comments, “The survey found that companies’ conventional social responsibility and sustainability reporting activities aren’t sufficient.

Today’s citizen consumer has higher expectations of business. Dissatisfaction may be regarded as the product of traditional approaches to communicating sustainability, centred on philanthropy and corporate social responsibility, with no clear integration into the products and services people consume, or the connection through their products that brands share with consumers.”

We’ve argued consistently that companies and the brands they rely on would benefit hugely from connected corporate social responsibility (CSR). We also firmly believe that sustainability is not dead; just the opposite. Sustainability strategies which are coherent, consumer-connected and cohesive are absolutely essential to commercial survival.

To highlight just two findings in support of this, ‘young optimists’ aged 18-34 are the most engaged on sustainability. Two-thirds of this group actively buy sustainable brands and almost a quarter say that they “always” consider social and environmental ethics of brands when making purchasing decisions.

And here’s a showstopper for us – young men globally (aged 25-34) are consistently more likely to consider sustainability factors in purchasing decisions, seek information on company sustainability performance, and recommend ethical and responsible brands to their friends. Young women, especially new mothers, are more engaged as consumers on environmental and social issues.

There’s the sustainable commercial future, right there!

How, then, can companies and their leaders address the twinned connectivity and communications challenge? The report makes three main recommendations.

1. Promote a commitment to honesty and transparency

Companies must embed the principles they espouse in marketing and communications throughout their operations: consumers form perceptions based not only on the messages companies promote, but also on the way they define and articulate their purpose, and act upon it in the most transparent way possible.

2. Innovate to improve health, prosperity, and livelihoods

For business, this would need two important shifts in the innovation process: one, align product and service innovations to meet the broader needs; and two, innovate manufacturing and production processes through circular economy models to improve impacts throughout the value chain.

3. Enhance credibility through communicating real, tangible impacts

Companies and brands simply must demonstrate more effectively why they matter to consumers and how they make a meaningful difference to quality of life. Awareness and authenticity are important motivators to purchase.

The study shows to us that all companies need to revisit their CSR policy, focus on sustainability strategies and understand fully how best to connect with and communicate these positive, beneficial elements of their business culture to the people they exist for – their customers, the consumers.

Mark Sait is managing director of energy-saving specialists SaveMoneyCutCarbon.com. He is among the speakers at Blue & Green Tomorrow’s Sustainable September conference, which you can find out more about here.

Photo: Maciek PELC via freeimages

Further reading:

Lessons in sustainability from the city that touches the clouds

21st century leadership: from business as usual to business as a force for good

Sustainability isn’t about being fluffy; it’s about being strategic

Why businesses must ‘shape and innovate’

We need more people with complete sustainability literacy

Mark Sait is managing director of SaveMoneyCutCarbon, a uniquely positioned full-service efficiency partner to organisations and homes that want to reduce energy, water and carbon to improve sustainability. Clients include major hospitality groups, property ownership groups, distribution centres, theme parks and corporate offices as well as SMEs and private residences.

Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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