When it comes to the business case for sustainability, the evidence is clear: organizations with high environmental, social and governance (ESG) standards perform better and generate more value than their average competitors.
In fact, a recent multi-year study led by CSRHub confirmed that strong performance in sustainability can lead to up to a 31% increase in brand strength.
So how can a company make sustainability an integral part of its brand? That is, how can a company make sure that their sustainability initiatives are relevant, noticed and valued by key stakeholders such as customers, employees, suppliers, local communities and investors? And how can they ensure that this creates value and helps them perform better as a company?
Looking at some of the best practices from leading organizations in this area, I believe there are three common threads that a company can take to successfully connect sustainability to its brand.
Step 1: Know and involve your stakeholders
An essential first step is to develop profound knowledge of each stakeholder group, deeply understanding their core values and motivations.
This is not exactly breaking news, and most companies already invest significant resources to know and communicate with their stakeholders. But the difference here is the depth of the insights that must be generated and the relationship levels that need to be established.
This goes beyond simply mapping audiences according to their business impact, or keeping them informed of what the organization is doing through public relations and other traditional communication channels. While communication is always important, effective engagement involves building meaningful, interactive and participative relationships with all relevant stakeholder groups.
How are companies doing this?
Organizations that excel in knowing and engaging with their diverse stakeholders are frequently mentioned in both sustainability and brand-value rankings every year. A recent example is the 2017 Sustainability Leaders Survey & Ranking, developed by GlobeScan and SustainAbility.
The ‘usual suspects’ are there, including Unilever at the top of the list, followed by Patagonia, Interface, IKEA, Nestlé, Nike, GE and other well-known and highly reputed organizations, all of which qualify as both sustainability practice leaders and attractive, valuable brands.
These brands deeply understand who each of their most relevant stakeholders are, in both demographic and psychographic terms, and develop insights about what they value in their lives or businesses, their motivations, aspirations and other behavioral aspects. They know what they expect from the company, how they feel about its products and services, and what they think about the prices, the market and competitors.
With this knowledge, these leading organizations create profound levels of engagement by aligning their business and brand strategies - which are based on clear and legitimate values, purpose, vision and mission - with the values, purpose and motivations of their stakeholders. This builds empathy and trust, which reinforces the bonds and strengthens the relationship.
These brands are transparent about their activities and often invite stakeholders to participate in the co-creation of products, services and other company initiatives, creating multiple opportunities for interactivity and communication using all available channels and platforms.
One recent and visible example is Patagonia’s Worn Wear initiative, a travelling repair shop created “to fix gear and hear your stories”. By encouraging people to repair used Patagonia clothing instead of just buying new ones, it reinforces the brand’s values and purpose, which were founded on adventures in the great outdoors, creating stronger bonds with people who identify with and share the same values. It also provides a space for conversations that trigger the emotional connections people have with their products, what they lived through wearing them and how they wore them out.
Step 2: Have a clear vision
The highest scores in GlobeScan’s Sustainability Leaders ranking were given to organizations that articulate a clear vision and define ambitious goals for sustainability. The reason these factors lead to higher and positive recognition is that they are also inspiring and meaningful to stakeholders, who can easily understand what the company wants to achieve.
How are companies doing this?
According to the authors of the book Exponential Organizations, companies that develop what they call Massive Transformational Purpose (MTP), do so by creating big goals that their audiences identify with. Examples of MTPs are Google’s famous mission to ‘organize the world’s information’ and Virgin Atlantic’s mission ‘to embrace the human spirit and let it fly’.
Although these examples are not necessarily sustainability-related, any company designing a sustainability initiative could take inspiration from the power of these mission statements, and note how their clarity and simplicity are key to their success. By using insights generated in Step 1 (knowing and engaging with stakeholders), organizations have better strategic elements to develop a clear and purposeful vision, as well as ambitious sustainability initiatives that consider both the inside-out (business) and outside-in (stakeholder) perspectives, especially if the whole process is conducted in a participative and transparent way.
Step 3: Make results visible
The final step is to make sure that the value and the positive impacts created by each sustainability initiative are visible and tangible to the specific stakeholder groups involved. Importantly, the focus should be on increasing the visibility of the value created by the initiative, rather than on the initiative itself.
How are companies doing this?
An example is Coors Light’s #EveryoneOneCan campaign which ran in the USA over summer 2017. As the pioneer of the recyclable aluminum beer can, Coors wanted to show how sustainability is “the foundation of the brand’s past and the path to the future”. For this campaign, they partnered with TerraCycle, the global leader in collecting and repurposing hard-to-recycle waste, to create useful upcycled products such as cooler bags made from recycled vinyl advertisements and grills made from recycled kegs, to raise awareness about their sustainability efforts which saved 3.8 millions pounds of aluminum in 2016.
They also used the campaign to tell consumers about their giant solar array on their brewery, which can produce the equivalent of 22 million beers per year using the sun’s power alone. And by working with several baseball teams across the USA to spotlight sustainability efforts that are taking place at stadiums – they brought a sustainability message to mainstream consumers in an unexpected way, firmly positioning themselves as a company that takes sustainability seriously.
And finally, don’t forget to measure success
Given the non-financial and intangible nature of a ‘brand’, it can be challenging to measure brand value created from campaigns like the Patagonia and Coors examples, but there are some methodologies available to help quantify success.
These include, but are not limited to:
- tracking stakeholder participation in activities
- measuring the level of stakeholder interaction and responsiveness
- conducting surveys to track changes in perception of organizational image and reputation
- measuring the level of social media participation and buzz created around initiatives, and
- analyzing and qualifying the content of these social media interactions.
And of course, transparency is key. Transparency is a vital element of the process that connects sustainability to the organizational brand by establishing an ongoing dialogue that builds trust and engagement. Even if the results of a specific sustainability initiative do not meet expectations, being open and transparent about the outcomes, and seeking to co-create innovative solutions to improve them, strengthens the relationship between the organization and its key audiences.
By following these three steps, I believe companies can effectively connect sustainability to their brand. What do you think? Comment below to let me know.
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