Nyenrode Business University recently hosted its first-ever Sustainable Marketing seminar. According to lecturers André Nijhof and Bart Brüggenwirth, many businesses are still struggling to develop a philosophy for sustainable business – and especially have trouble integrating this philosophy into their strategy and positioning. “A fair number of businesses find it a challenge to decide which societal issues will really help them make a difference.”
For the longest time, all that was really expected of companies was to be decent employers, pay their taxes, and market products or services that make people’s lives better or easier. But there has been something of a shift in recent years in that a rapidly growing contingent of consumers also expects organisations to tick all these boxes without damaging the planet and/or contributing to climate change. Better still, companies should strive to create added value for society by doing ‘business for good.’
Businesses tend to respond to this relatively new challenge by defining a purpose: that is, a reason for existing beyond the plain old bottom line. In his book Sterke merken, betere wereld (‘Strong Brands, Better World’), Brüggenwirth describes various practical cases involving companies that have managed this transition successfully. Swedish furniture retailer IKEA, for one, decided to exclusively sell LED lights in its stores long before the European-wide ban on incandescent lights. The company has also invested heavily in moving towards a circular economy, including by developing new services such as leasing and repair services and selling recycled products.
Another company that rose to market leadership by making sustainability the focal point of its strategy is Interface, a US-based manufacturer of modular carpet tiles. Brüggenwirth: “At Interface, they’re no longer even content with a carbon-neutral footprint; their ultimate goal is to produce carpet tiles with a positive footprint.”
No marketing gimmick
Nijhoff states that many companies have a hard time defining the catchall term ‘sustainability’. “A fair number of businesses find it a challenge to decide which societal issues will really help them make a difference. In which areas do you want to excel, and how do you get your customers to follow you?”, he says, summing up the quandary at hand. “We tell people to start by setting a number of strategic objectives that will allow them to make an impact. For a food company that sources its raw materials from developing countries, this might involve ensuring that farmers receive a living wage, whereas other businesses – Dutch chocolate company Tony Chocolonely comes to mind – have made it their mission to eradicate exploitation of labour. A manufacturer of washing machines, for example, would be more inclined towards developing carbon-neutral products or adopting circular-economy principles and practices.”
While a focus on sustainability certainly provides opportunities for companies to get noticed and develop new products, Brüggenwirth cautions that this alone will not cut it. Consumers are quick to sniff out companies for which sustainability is driven mainly by commercial self-interest rather than an intrinsic mindset. “Many organisations are involved in purpose marketing, but the inherent danger in that is that they end up using the social purpose as a way of meeting their marketing targets. It comes across as insincere. A company’s purpose should be firmly rooted in its identity and beliefs and deeply embedded into its strategy and organisation. That’s the first step in the process. If you succeed at that, customers will feel your company has remained true to its ethos. You can make it part of your marketing strategy without people thinking it’s a marketing gimmick,” he says.
A message consumers can trust
This is seconded by brand strategist Hans de Koning, who has been involved for over 15 years in the CSR initiatives of various medium-sized and large businesses. De Koning: “When it comes to sustainability, it’s about doing things that are true to the identity of your company or brand. If you get that part right, people will connect with it and be willing to accept your proposition. But if you shoehorn in some purpose because it happens to be all the rage or because you think that’s what your customers expect from you, there’s a risk it will end up backfiring on you.”
De Koning cites a controversial 2017 Pepsi TV advert as a textbook example of an ‘opportunistic purpose.’ “In the ad, supermodel Kendall Jenner hands a can of Pepsi to a police officer at a street protest, and, miraculously, all is well with the world. The cops are smiling, the protestors are smiling – a carbonated soft drink is presented as some sort of panacea for social injustice. The ad ended up being ridiculed all over the world.”
Yet De Koning retains a sense of optimism: “During my time working for CSR Europe and their Dutch division, ‘Business and Society’ – which now operates as CSR Netherlands – companies tended to take a somewhat defensive approach to these issues, as corporate sustainability was on the European Commission’s radar and they would remind businesses of their responsibilities in this regard. But we’re now seeing new generations of consumers voting with their wallets and actually persuading older generations to join them. They choose to buy from companies that have an authentic message they can trust and no longer want to work for businesses that don’t pull their weight in terms of corporate social responsibility. Shell is an example of a company that was trailing behind in the sustainability stakes and is now making up for lost time – it really ended up damaging their appeal as an employer in recent years. The brand also took a bit of a hit because of the company’s insistence on hanging on to fossil fuels. They were late to the party, but now that they’re investing in renewable energy and have taken on the role of change agent, who knows, all that could change again. Although I would say it will definitely take some time before consumers start thinking of Shell as a ‘leader in sustainable energy.’”