out of the sustainability paradox
More and more businesses are making sustainability a core part of their marketing. They couldn’t be more wrong. Here are just a few thoughts on the decline of sustainability as a concept – and why tomorrow belongs to sustainable brands.
Sustainability? It’s old news for people who care about the environment, and good business for consultants, but seen as nothing more than a marketing tool by almost half the people at the top of German businesses, according to a recent Handelsblatt report on a survey of 9,500 top managers conducted by Russell Reynolds, an executive search and leadership advisory firm. The survey revealed that no more than 15 per cent of these top managers thought commitment to environmental, social and governance (ESG) issues had any potential to create value. Nearly all saw it as simply irrelevant.
Sustainability is dead,
yet suddenly as alive as ever.
Even so, and for some time now, sustainability has, like a zombie, been emerging from the tomb, mainly thanks to the plain facts of economics and regulations, which have brought about a sudden rethink in boardrooms. As prices for energy and CO2 certificates shoot up, all businesses are now finding themselves having to slim down their materials and manufacturing processes. With scarcity of resources and transport bottlenecks stretching supply chains everywhere to their limits, even the most conservative owners of medium-sized businesses are familiar with the concept of the circular economy, and, more to the point, starting next year, the EU’s new corporate sustainability reporting regulations will require something like 15,000 German companies to report regularly on how sustainably they operate. Those who nevertheless persist in fobbing the public off with goods and services that are only superficially green can expect their workforce and actual or potential investors and customers to penalise them for it. That’s precisely what happened to DWS, a subsidiary of Deutsche Bank, last year – no sooner had its former Head of Sustainability outed the DWS Sustainability Funds as “greenwashed” than its share price nosedived. In other words, companies will have to decide right now whether they want to carry on being part of the problem or to become part of a really sustainable solution.
The truth will piss you off
This is nothing to do with marketing, and little with virtue-signalling, but is very much about adapting business models to our planet’s resources, something that is long overdue and demands enormous effort, especially where the company attempting it has been around for a long time. For example, it took ten years and a lot of hard work for VAUDE, the outdoor outfitter, which, with its 529 staff, isn’t an excessively complex organisation, to rebuild itself as a business whose environmental and social approach is an example to others. That’s the bad news. As Gloria Steinem said, “The Truth Will Set You Free, But First It Will Piss You Off.”
There’s good news, too, though, for businesses that want to transform themselves already have access to the most important resources – the people who work for them.
Guiding stars for transformation
No sustainable transformation will work without the workforce or even against them, but if it’s attempted with them, it will gain strength, extend its scope, and pick up speed to an enormous degree. On top of that, firms will gain more highly skilled and sought-after talent. After all, who wouldn’t want to work for a company that makes money and grows sustainably while also saving the world a bit?
If a business is to be able to do that, it has to put sustainability at the heart of its brand, for brand identities have great power – the power to take values and use them to change people and organisations. They create meaning, direction and attitudes (this is what distinguishes them from marketing); they are the guiding stars from which, through the brand strategy and implementation, all the activities can be derived and carried out authentically. That makes them just what businesses need if their transformation is to be credible. If sustainability is driven by a strong brand, employees will become fellow campaigners, customers will ideally become fans, and stakeholders supporters. Brands like Patagonia, dm, and VAUDE, among others, which have consistently synchronised and maintained their sustainability and brand strategies over the years, demonstrate how this works.
for sustainable change
But what do you need to get started? Here are five principles that people who head up businesses should take to heart if they want to shape a sustainable leading brand.
Your most valuable resource is your team, and, if you’re serious about getting the project off the ground, you have to start with them. For example, by adopting new ways of sharing ideas and communicating that break through routines and get your workforce committed to the new direction early on. Not until employees have internalised what sustainability might mean can they play their part in reorienting the business and credibly present its new direction to the world.
This is not about building a future with materials from the past – the transformation must follow its guiding star, the brand. Only when everyone knows what the destination is can they all set off together on the road that leads to it.
Brand strategy is always part of corporate strategy, and the brand always reflects what a business really is. In the long term, the people in charge can therefore communicate convincingly only to the extent that their business is actually improving the way it operates. Businesses that want their brand to shine have to have made their day-to-day operations sustainable.
When a firm’s various ESG initiatives make headway, this should be made visible both within the company and outside it so that everyone can share in the experience, and the entire process should be communicated on an ongoing basis. People will have a more favourable view of firms that celebrate their small successes while also admitting to their (inevitable) failures and setbacks. After all, nothing’s more boring than dull process management, and nothing robs people of motivation more than the sort of marketing-speak that people can see through.
Brand transformation is an agile experiment, and any credible transformation will have imperfection in it somewhere. To get through it successfully, plans have to be adapted to a changing world even while the transformation process is ongoing. That’s why brand transformation calls for a quarterback’s talent for swerving, a marathon runner’s stamina, and a skipper’s far-sightedness.
„Makes sense, doesn’t it? Yet the number of decision-makers for whom it evidently doesn’t is dangerously large; of the German managers who responded to the Russell Reynolds survey, 75 per cent said their company didn’t have a sustainability strategy that was clearly communicated and actually implemented. That puts their brands at a potentially fatal competitive disadvantage. The good news is that it gives all the others an advantage in the long term.“Philipp Brune