Environmental concerns continue to drive the growth of more sustainable product developments, business practices and the need for a more circular economy. With consumers becoming more educated in this space and wanting more from the brands they interact with, what does it mean for the industry to be sustainable? In this Q&A we will look to review current consumer trends and different marketing approaches for sustainable products and marketplaces. Thankyou to those who contributed from Gumtree, Mindshare, Kantar and BBC.
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Shannon Fitzpatrick, Director of Advertising, Gumtree Australia
For consumers, how much demand is there for brands to be more sustainable? Do we
feel this is being led by the younger generation?
There is an increasing demand from consumers for brands to be more sustainable. The 2021 Gumtree Trading in the Circular Economy Report revealed that 81% of Australians are already changing the way they consume goods to be more environmentally friendly now compared to 10 years ago. In fact, the majority (86%) say sustainable practices inform their purchasing decisions when buying brand new. This heightened focus on sustainability has led to conscious consumerism, where consumers are aware of their environmental footprint and the impact that the items or services they purchase have on our planet.
Consumers are not only considering the environment at the time of purchase, they are also thinking about the lifecycle of the products they buy. Our report shows that in the past 12 months alone, 86% of Australians have saved pre-loved items from going into landfill by selling them in the circular economy. These numbers demonstrate that the increased interest in sustainability is a trend seen across all Australians and not specific to a particular demographic group.
All brands, regardless of their target audience, need to make sure that they’re listening to their customers and embed sustainability into their business. By embracing a sustainable, circular approach and moving away from a take-make-dispose model, brands can reach their customers at various points — throughout both their customer lifecycle and the lifecycle of their products. This translates into an increased number of touchpoints and a chance for businesses to have longer conversations with their customers.
Have we seen any innovative pieces we want to shout out to? Any brands who are doing good for both their sector as well as the broader environment?
The brands that are leading the way in sustainability are those that have designed or redesigned their business model with the environment in mind and have thought about the full lifecycle of their products or services. For example, earlier this year Volvo announced its plans to build cars using steel made without fossil fuels in a bid to reduce its carbon emissions. This announcement is part of the company’s long-term plan to become climate neutral by 2040, which goes beyond electric cars and involves Volvo’s manufacturing network, operations and supply chain.
Adidas, on the other hand, has made sustainability an integral component of its ‘Own the Game’ strategy, with a roadmap for 2025 and beyond. The sports giant has committed to a series of goals, including making 9 out of every 10 products sustainable. Similar to Volvo, Adidas is looking at all its environmental impacts across locations, manufacturing, transport and supply chain.
Commonwealth Bank has made its clients’ sustainable finance needs a key focus, setting targets such as financing $15 billion of low carbon projects by 2025. CBA is also evaluating lending decisions according to its own environmental standards. The increased demand for businesses to be more sustainable is not exclusive to consumers. We’re also seeing other key stakeholders, such as investors, making decisions based on sustainability.
Gateway Bank is another financial institution with a strong purpose-led strategy. The bank’s Pocket & Planet purpose is clearly designed with sustainability at its core. From its certification as a carbon neutral organisation to its Ethical Investment and Ethical Lending policies, as well as its partnership with reuse organisation Reverse Garbage NSW to support waste repurpose and reduction.
Each of these brands is a great example for its industry and for businesses in general because they are putting sustainability at the heart of who they are. Their work proves that there is an appetite in Australia and worldwide for sustainability.
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Sam Turley, Chief Creative Officer, Mindshare
For larger companies it can feel as though they are offering token sustainable efforts, do we feel this is accurate? If so, how do we help them to create a sustainable business?
Speaking from an agency perspective, whether it’s ourselves, our clients or our partners it’s fair to say we’re all at different stages along the journey, regardless of size. The common thread is the evolution of the sustainability conversation, which is significantly more nuanced today than it was a mere 12 months ago. As we all upskill in this space tactical initiatives are being replaced by more comprehensive plans across the board such as WPP’s pledge to reach net zero emissions across its entire supply chain by 2030 and Volvo Cars’ commitment to only sell electric vehicles by 2030.
To help businesses become more sustainable we need to be mindful that what a sustainable model actually looks like is as individual as each business and crucially many larger companies have immensely complex supply chains to work through. For these reasons, I think everyone agrees the responsibility lies way beyond the marketing department however there’s still a lot we can do to help accelerate the transition.
For example, as a media agency, we can help provide actionable data to enable businesses to set realistic targets and stay on track on their path to decarbonisation. In the UK we recently launched the Media Climate Charter in collaboration with the IPA which includes a tool to calculate the carbon footprint of every media plan based on the media mix. Globally we are also implementing a range of initiatives that enable clients to be more intentional with their media investment such as our Inclusion PMP (private marketplace) which delivers critical support to publishers that provide essential voices and content to diverse communities, contributing to a more equitable media marketplace.
I’m also fiercely optimistic about the role innovation will play in bringing forward more sustainable solutions, particularly in the fields of AI/ML and blockchain. For example our team used Veridium Labs, a leading carbon credit producer, to offset the carbon impact of Think, IBM’s annual tech conference in Sydney, as well as our own regional conference (pre Zoom life) and we have only scratched the surface so far!
What do we feel are the next steps in this space? Are there any tips or watchouts you can provide?
I’d say one of the biggest challenges at the macro level is ensuring that sustainable products and services are inclusive and accessible for everyone, so we’re not simply exacerbating societal and economic divisions. To do this successfully I think there’s an opportunity for big and small businesses to work more closely together rather than in competition with each other. A great example of this is the Black Friday (Re)Sale campaign IKEA ran in Denmark last year which redirected customers to DBA, Denmark’s largest used marketplace, to purchase second hand items. What I love about this is that it builds on an existing behaviour to change an established one.
It goes without saying that brands can’t pay lip service to sustainability; they need to create tangible action in the present day. My watchout here for agencies and marketers is that if every brand dials up their sustainability comms (because that’s what the data tells us consumers demand) then we risk losing distinctiveness in a sea of green! It’s imperative we’re strategic with how we communicate sustainability messaging and in many cases this may mean no paid support.
Ultimately to make our sustainable future a reality I feel there’s still an underlying myth we need to overcome and it’s that sustainability equates to slower growth. To combat this, one of the next steps I think we can take as an industry is to redefine the notion of successful growth and begin measuring ROI not just as return on investment but also as return on impact.
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Kantar: Dan Robertson-Jones – Partner, Consulting, Will Levy – Client Manager and Kim Braganza – Associate Director, Consulting
How do we understand sustainability and how it is affecting consumers and brands?
The world has changed, and with it, consumers, brands, organisations and governments will continue to change around us. The impact of Covid-19 only amplified and accelerated the search for life as we know it to change. This has redefined demand and is being driven by change in what is rare and desired in people’s lives.
We see this reflected in the three eras of marketing. Firstly, in the ‘era of the product’, quality products were rare and desired, and marketing introduced people to new products, with advertising communicating their quality to all. In this era, functional utility was paramount. As products became more widespread (the 1950s and 60s) individuality became rare and desired. This gave rise to the ‘era of the person’ – when emotional utility was key to effective marketing focused not on the product but the person being sold to. Segmentation and targeting were king. This era pervaded until as little as a few years ago. But today what is rare and desired is collective good and hope for a better future. This is met through having a positive impact on the world. This is the ‘era of the public’ where social utility has now become paramount in marketing.
It’s not ‘all talk’. Analysis of our Kantar BrandZ™ 100 Most Valuable Global Brands shows that over a 12-year period, purpose-led brands already grew their brand value by at least twice as much as others – and sustainability is the vehicle to meet this demand. But in doing so, what sustainability ‘is’ is now being redefined. Once defined as minimising the negative impact to maintain life as we know it, sustainability is now about maximising positive impact to redefine the world we live in. This change is defining commercial growth opportunities, consumer expectation and engagement with brands and shaping employee and citizen expectations from employers and governments.
For larger companies it can feel as though they are offering token sustainable efforts, do we feel this is accurate? If so, how do we help them to create a sustainable business?
Defining ‘sustainability’ is the fundamental first vital step in creating a sustainable business – yet it is one often overlooked by many businesses. Traditionally seen as minimising negative impact of business activity on the environment (think recyclable packaging, CSR and ethical sourcing of ingredients), the ‘heat’ in sustainability has shifted focus spurred on by Covid-19.
This year’s Kantar Global Monitor shows that 66 per cent of people believe it is important for brands to be ‘committed to making our society better’. We are increasingly demanding that organisations – big and small – do more than just the basics when it comes to sustainability. Minimising impact remains important, but alone it is not enough – and can leave any business vulnerable to accusations of greenwashing. The recent legal challenges to several major multinational corporations underline this shift in ‘heat’.
We now expect leadership from brands and businesses, to not only not do bad, but to do good positively and recognising that it is not simply an initiative that is separate to what the entire business strategy is but must live at the very heart of what your business stands for and comes across in everything you do. This is what we call positive impact change-making citizenship. The turn-around in fortune of Vattenfall (one of the largest energy companies in Europe with origin in Sweden) is illustrative. Criticised heavily a decade ago for heavy investment in fossil fuels, the business set out a clear, positive impact vision to ‘enable fossil-free living within one generation’. Their CEO Anna Borg recently spoke at the White House Leaders Summit on Climate, describing their journey: “This is not our sustainability strategy – it’s our business strategy. And it’s sustainable.”
The reality is, the bigger the business, the bigger the expectation. Businesses of scale must have impact at scale too. With it comes rewards. Our 2020 Kantar BrandZ study reveals high levels of appeal, relevance and salience for brands with a positive impact today compared to category competitors without this. Importantly, the same study forecast a 175 per cent over the next decade for positive impact brands, compared to 70 per cent for those seeking to minimise impact. Larger businesses are expected to make a bigger impact at scale, implying sustainability actions takes critical priority and significance and is resourced and prioritised as a key lever for growth.
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Jamie Chambers, Vice President ANZ, BBC World News and BBC.com
For consumers, how much demand is there for brands to be more sustainable? Do we feel this is being led by the younger generation?
Research from the IBM Institute for Business Value shows that the ‘Purpose-Driven Consumer’ shopper segment is now almost as large (40%) as the ‘Value-Driven Consumer’ (41%), so it’s critical brands understand the values of their customers to be successful. And todays customers are definitely more concerned about sustainability than any other CSR brand value, with the pandemic sharpening this focus as people feel they want to build back a better society after we come out of lockdown. They are strongly aware that their personal consumption & brand choices have an impact on the environment and people of all ages are actively seeking information that helps them understand which brands mirror their own values so they can adjust purchase behaviour accordingly.
From a Sustainability Survey BBC conducted with our global audience in February 2021, we found that companies which clearly demonstrate their commitment to sustainability add value to their brands. And our latest research in May is a reaffirmation that sustainable practices and commitments are influential factors when they make purchase decisions. 87% of our audience indicated that they are more likely to purchase from brands with strong sustainability and eco-friendly practices.
Consumers nowadays are cautious of purchasing products that have a more harmful impact on the environment and despite the economic insecurity caused by the pandemic, 78% of them are actually willingly to pay more for brands offering environmental friendly / sustainable products. Conversely, more than half would actually stop buying a product they were previously loyal to if they discover that it is not committed to sustainability. So for those brands who can get this right, there is the opportunity to not only mitigate risk but also grow revenues & profit in a difficult economy.
Consumers also feel it is a brand’s job to educate & help them make sustainable choices, and our research showed there was a clear gap in each sector tested between the importance people place on key sustainability criteria and how successful leading brands have been in communicating these messages. This means for those brands who can successfully build their sustainability brand credentials, there is the opportunity to build a defendable competitive advantage. Consumer cynicism and widespread awareness of ‘greenwashing’ means brands have to think harder about the channels they choose to communicate through, and our research highlighted the strength of working with trusted publishers to create branded content as a means of combatting this scepticism and building successful sustainability campaigns.
Consumers’ expectations on sustainability also vary across different sectors. Auto, Airlines, Travel and Tech sectors have higher expectations placed on them as compared to Finance, but we feel this could be down to a combination of the perceived level of direct impact each sector has on the environment, and the level of education of consumers. In the finance sector for instance, we already see several finance brands taking strong brand positions in sustainability, with products and services such as ESG funds geared towards meeting the needs of those consumers who want their savings and investments supporting sustainable and environmentally friendly industries. With 60% of BBC audiences feeling finance brands should follow sustainable practices, yet only 11% of audiences feeling leading finance brands are doing a good job, you can see the opportunity that exists for sustainability-centric finance brands to steal market share.
In summary, consumers expect action, not just empty promises from brands, and they are quick to act where they feel a brand falls short. Brands need to provide consumers with education about their organisation and products/services to ensure they not only don’t lose market share to those who move quicker in this space, but have the opportunity grow and build their business as the world rebounds from the pandemic.
Have we seen any innovative pieces we want to shout out to? Any brands who are doing good for both their sector as well as the broader environment?
There are many companies which are practicing sustainability and successfully communicating their brand position through their marketing activities. One good example that BBC has worked with is Corteva, a major agriscience company dedicated to agriculture. Corteva aims to make their operations and global food system more sustainable and resilient for farmers, the land, the communities and the earth.
BBC worked with them to come up with a campaign that followed the food from field to fork, bringing the farmer and consumer closer together. The eight-part documentary series questioned where our food came from and how this will change in the near future, thanks to new technologies and innovative ways of farming. Each episode tackled one major food challenge, selecting several case studies from across the globe, and showcasing the progressive and exciting steps that we are taking to reset how we feed the planet – and how our modern agriculture is leading the way.
Another fantastic example closer to home in Australia is Officeworks who, during the pandemic in late 2020, continued to invest in their CSR partnerships and sustainability brand campaigns. Following a branded content campaign on BBC.com to support their Restoring Australia initiative, they saw huge uplifts across every brand metric & sentiment tested, including more than doubling the number of people who felt it was “important a brand I purchase from operates in a sustainable way” (36% to 76%). Interestingly, the campaign enjoyed fantastic social engagement too, with people sharing and commenting positive messages and even thanking Officeworks for their work in helping restore Australia – “Thanks Officeworks . We need more companies to be involved as these guys need all the help they can get and it’s good advertising for companies”. Proof enough for brands wondering how valuable this position can be?