Building a successful brand in the age of sustainability

It is no longer enough for companies to manufacture or sell high-quality products and deliver positive results on Wall Street. Today’s brands are increasingly being measured by their efforts to make the world a better place. With faith in public institutions dropping, people are looking to businesses to take the lead on social and environmental change rather than waiting for government to impose it.

This is good news for brands; growing evidence reveals companies that make corporate social responsibility (CSR) part of their core business strategies are more successful in more areas than organizations without such plans. Besides positively impacting people and communities, these initiatives have been directly linked to top and bottom-line growth, brand differentiation, customer loyalty and employee engagement.

Consider these facts:

  • 91 percent of survey respondents would buy from a company with an excellent CSR program, and 84 percent would give companies with excellent CSR programs the benefit of the doubt in the event of a crisis.
  • 51 percent of people won’t work for a company that doesn’t have strong social and environmental commitments, and 70 percent of employees say they would be more loyal to a company that helps them contribute to important issues.
  • 76 percent of millennials now regard business as a force for positive social impact.
  • Brands that communicate their sustainable products and practices successfully stand to capture a share of a potential $1 trillion market.

Consumers also overwhelmingly expect companies to be transparent about working conditions at their suppliers and manufacturers, and to drive change by facilitating improvements in working conditions, Environmental Health and Safety (EHS) and human rights compliance throughout their global supply chain networks.

Major brands leading the way

Companies that integrate their mission and purpose with sustainable values and support environmental and social goals in ways that connect to their business can greatly influence the public’s willingness to buy from, invest in and work for them—all factors that can shape their brand reputation.

The Reputation Institute, a reputation measurement and management firm, publishes annual rankings, including the Most Reputable Companies in the United States and the Corporate Social Responsibility RepTrak 100. This research highlights the brands consumers perceive as leaders based on their reputation for doing good.

LEGO, ranked number one for CSR and the second most reputable company overall, is an example of a company that rebuilt itself as a sustainable brand. In addition to partnerships with organizations like the World Wildlife Fund, LEGO has committed to reducing its carbon footprint and is working towards 100 percent renewable energy capacity by 2030. It has also infused environmentally friendly processes into its manufacturing with the creation of a Sustainable Materials Center, which works to find sustainable alternatives to current materials and packaging.

The Walt Disney Company, coming at number two for CSR in the RepTrak survey, is a powerhouse when it comes to sustainable business. Each year the company publishes a new CSR report detailing its efforts in environmental stewardship, international labor standards, healthy living, sustainable and fair workplace practices, strategic philanthropy and community engagement. An example of its goal-focused initiatives includes setting new standards for emission tolerances at theme parks.

Google achieved its 100 percent renewable energy target in 2017 and is now the largest corporate renewable energy purchaser on the planet. Sitting in the number three spot on the CSR RepTrak, the company views nearly every part of its business with a social impact lens, providing grants to leading social impact initiatives and encouraging green commuting.

The world’s largest furniture retailer, IKEA, is considered the thirteenth most reputable for its sustainable business strategies. It plans to use only renewable and recycled materials in its products by 2030, in the latest commitment by a global store group to reduce its environmental impact.

Putting sustainability into practice

Corporate social responsibility is much more than a public relations tool; it’s a vital component of core business operations in a highly competitive marketplace. Companies considering environmental and other CSR programs are wise to keep these considerations in mind.

  1. Connect to your company’s core purpose. The most successful companies have a mission beyond making money—and their CSR strategy needs to reflect that. At Coca-Cola, agriculture accounts for nearly 50 percent of yearly procurement with suppliers located in nearly 200 countries. The company decided to conduct human rights due diligence studies in several countries where it buys sugar to proactively identify and mitigate potential human rights issues in the supply chain.
  2. Don’t overlook profit. It is possible to make money responsibly while being purpose driven, so once you identify your focus, think carefully about how sustainability or other programs will generate revenue while meeting a societal need. Levi Strauss & Co. has shown that growing profitability doesn’t have to come at the cost of ethical responsibility. An example of the company’s commitment to sustainability is its range of Waterless jeans, which use up to 96 percent less water and also cost less to produce.
  3. Consider your customers. Most people support ethical business practices. Even so, you need to understand your specific customers—including how much they care about an issue and how it will impact them financially. For example, if you are a manufacturer and must pay more for a commodity that is “greener” but not superior in any other way, then your customers need to be willing to pay more for the final product.
  4. Tell your story. Consumers, investors and employees will want to know what your brand is doing to make the world a better place. Consider publishing an annual sustainability report or incorporating your program results into your investor and recruiting communications. Communicating your progress toward sustainability goals and highlighting success stories will attract more people to your brand and ultimately boost your bottom line.

Strong brands inspire action

Sustainable business strategies will continue to be a differentiator in the minds of consumers, who are increasingly looking for ways to combine purchases with social benefits. Companies that adopt and communicate these practices can consistently reap reputational and bottom-line benefits for their brands.

A secondary benefit is that the more people trust a brand, the more likely they are to be inspired to action by it. A business that bakes sustainability and social issues into its brand can actually motivate people to buy greener, more sustainable products. Sustainability alone may not be enough to build a strong brand, but incorporating it into your overall brand strategy can deliver significant long-term value.

Explore more insights to help you protect and strengthen your brand reputation.

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