Sustainability Attracts More Customers
Sustainable Business Builds Sustainable Customers.
The corporate leaders of American business have finally noticed that public demand for sustainable products has made their indifference unsustainable. American companies, large and small, have jumped on the sustainability bandwagon with various degrees of sincerity.
It would be all but impossible to miss the growing demand for greater sustainability from consumers. A Nielsen survey at the end of 2015 found that 66 percent of respondents would pay more for a product or service if the company was committed to positive social and environmental change.1 That is up from 50 percent in the same survey two years before.
This surge in consumer awareness started with an increasing realization of the profound impact consumer lifestyle was having on the global environment. Numerous scientific studies documented the cause-and-effect relationship between consumption of fossil fuels and climate change. With that grew consumer awareness that the fossil fuel use involved in products included not just their own cars, but also the transportation that brought products to the market.
Bottled water sold in individual packaging served as a wake-up call for consumers. A June 2013 evaluation of the industry in the Guardian stated flatly that “bottled water represents the very antithesis of what sustainability means.” It pointed out that even a certified carbon-neutral water company still sells water to western consumers when one billion citizens of the planet lack clean drinking water.2 This fails the third pillar of sustainability.3
This evaluation got consumers thinking. They realized that the carbon footprint of bottled water is larger than just the plastic bottle. It includes the transportation costs of shipping water, typically by interstate truck, from the point of origin to the retail location. Viewed from this perspective, companies that produced refillable canteens were poised to put water sellers out of business.
Modern business models had already expanded to include supply chain management (SCM) as a cost-containment strategy before sustainability became a concern. The 1990s brought increased demands on the athletic shoe industry to take responsibility for the working conditions and pay scale of contract labor in foreign countries. Applying SCM to the issue of sustainability was a simple and effective solution. Companies simply added the location of the supplier to their SCM system and began giving preference to those located closer to the delivery location. This had the additional benefit of providing documented results of changes made to improve sustainability.
Communicating those changes, and the overall attitude of the business toward sustainability, became a touchstone for business. Almost 90 percent of consumers stated they would be more likely to purchase products from a company that is making changes with the goal of improving sustainability. A similarly high percentage felt it was the responsibility of the company to make this information available.4
Heightened consumer sensitivity to sustainability issues is likely to continue in the foreseeable future, and business is sure to address these concerns. Communicating those efforts and their results may increase consumer awareness even more, potentially leading to a truly virtuous cycle and a more sustainable economy.