Doing good. It matters. Sustainability today matters for us and future generations.
As climate change continues to have an impact on our planet, sustainability has become more and more important. In today’s marketplace doing good for our planet not only helps our planet heal but also makes good business sense.
Luckily for our planet, consumers want sustainable products and are willing to pay more for them. And their actions are speaking louder than their words.
According to research from New York University Center for Sustainable Business (CSB), sustainable products delivered 54.7% of the CPG market growth from 2015-2019 despite only being 16.1 of the market.
“Across virtually every category of consumer packaged goods, sustainability is where the growth is, which I think tells you something about where consumers are… if you look at our data there is a massive shift in the last five years,” said CSB Director Tensie Whelan.
Twenty years ago, for the majority of brands, sustainability efforts were mostly around packaging reduction.
Today, sustainability has evolved into a broader effort that focuses on people, communities, waste, reuse, packaging, the environment, and so much more. The Hanes brand describes it more succinctly. They break sustainability into the three P’s: people, planet, and product.
GOOD FOR PEOPLE
As a global company, Hanes has been doing initiatives around people for a long time. That starts at the root with caring for the people that work for the company. Over the years, they’ve grown and expanded that into caring for the communities their workers come from.
Clardy Palacios, Senior Licensing Manager of Hanesbrands Inc., shared that Hanes has put a lot of internal goals to meet fundamental pivot points for sustainability as climate change affects many of the communities where they operate internationally.
From a people perspective, this includes measurably improving the lives of at least 10 million people by 2030 for communities as well as their employee base through education, health services, and different measures that leave a positive sustainable footprint.
Hanes has taken the proceeds that they save in the recycling process and reinvested it in communities through education, healthcare, infrastructure development, and disaster relief as many of their facilities are located in countries that have had the direct impacts of climate change through natural disasters.
And employees feel better about working for a brand that’s making a difference. There’s a retention factor that goes with that.
With sustainability, the brand equity may not just be measured in stock price but also soft equity through employee engagement and energy.
Employees feel good about working for a company that is doing good for the planet.
It’s not just the company and employees that benefit from sustainability, it’s also the consumer. As Scott Goodfellow from Procter & Gamble points out, there are three lenses they look through to make sure that they’re on the right sustainable path:
- Sustainability has to be good for the individual that uses their products – available and visible to the person that is buying their products every day.
- It has to be communicable to their friends. For example, marketing can provide easy ways to showcase the sustainable benefits of a product like it uses less plastic or is recycled, or is made with renewable energy.
- Most importantly, it has to be true and deliver on the promises given. You cannot go forward with a shill product. There has to have a benefit whether it’s recycled paperboard, renewable energy, or uses less water.
When approaching corporate sustainability initiatives, it’s important to ask how you can consistently try to drive down your company’s footprint.
For P&G, one recent example was helping consumers reduce their use of warm water with cold water Tide. This was good for their consumer. It was easy to communicate with friends. And it delivered on the promise given.
By looking through the three lenses, P&G had success on its hands. It’s one of many ways that P&G approaches sustainability.
GOOD FOR THE PLANET
The surface temperature of our planet has risen about 2.12° F (1.18° C) since the late 19th century and the Intergovernmental Panel on Climate Change recently stated, “Scientific evidence for warming of the climate system is unequivocal.” The way we currently produce and consume we’re using two years of resources in one year. And consumers are noticing.
Helena Mansell-Stopher, the co-founder of Products of Change, recently shared that 86% of consumers expect brands to be responsible for what they’re producing. Helping the planet makes a difference to consumers.
From a planet standpoint, Hanes looks at sustainability in three ways – Climate, Water, and Waste. Right now, they’re looking to reduce emissions by at least 25% and are setting the groundwork in 2022 to look at a reduction to meet their 2030 target.
From a water perspective, there’s a lot of waste that goes into the manufacturing process. Hanes is looking at ways to manufacture their products in more effective ways that reduce the amount of water used in textile production while also finding ways to reduce waste.
As of 2020, Hanes is diverting 90% of their facilities waste from landfills. They’re looking to recycle about 75 million pounds of fabric cut parts, corrugated plastics, and other materials annually. In addition to being good for the planet, it’s cost-effective for Hanes.
P&G also has several products with environmental benefits. Because of their size and technology, P&G can leverage innovation.
They’ve found ways to reduce water usage, reduce heat in water usage, leverage the supply chain, and work with their supply chain to come up with new products. Through this innovation, P&G has spun off technologies they’ve developed like Purecycle that recycles used plastics back into almost virgin material, and EC30 that removes water from products so it can be reconstituted.
And they’ve found new ways to market products they currently have like showing Dawn being safely used to clean up wildlife after oil spills. This promotion was so popular, Dawn’s packaging now features one of the ducks.
Not everyone is an expert or has the resources that P&G has. When you don’t have the resources, connecting with partners that are good at environmental concerns is the key especially with licensees. Leverage your suppliers who are ahead of the curve on sustainability.
They can help you deliver something new that will make consumers happy and do good in the world.
For example, Champion’s footwear licensee worked with Hanes’ social responsibility teams to create an upcycled slipper. They took deadstock inventory and fabric that was sitting in their overseas warehouses or textile mills and created a limited-edition patchwork slipper. The slipper sold out at retail.
Waste has value. Something that was going to be thrown away was re-tweaked and Champion had a sell-out line.
Corporations need to think about waste differently. It’s not a waste. It’s money that’s sitting around. Now reimagine how to get the money that’s sitting around and be good with the environment at the same time. When you think differently, you can create products that sell and sell well.
GOOD FOR YOUR PRODUCT
Data has shown that sustainability-marketed products grew 7.1x faster than products not marketed as sustainable.
Younger consumers are heavily influenced by the sustainability measures that companies and brands are taking. Sixty-two percent of Generation Z, who will begin entering the workforce this year, prefer to buy from sustainable brands. This is on par with The State of Consumer Spending: Gen Z Shoppers Demand Sustainable Retail’s findings for Millennials.
Unilever recently shared that 76% of its profits are coming from its sustainable living brands. Putting products in the marketplace that has been built doing the right thing is paying off. It’s what consumers want. And, because of that, it’s what retail is demanding. Consumers expect it, retailers want it, so it’s up to the brand companies to deliver it.
Not every product can be 100% sustainable. Then it’s time to explore different benefits. Perhaps it’s using recycled plastics or backer board. Work with an NGO that can add a benefit or societal communication to a product.
What can your company do to get the sustainable benefit or make a difference that drives other benefits and other sustainable qualities? While you may not be able to do 100% recycling, are there ways to reduce energy, reduce water, or reduce waste?
Keep digging, keep researching, and keep asking the next why. The opportunities will present themselves.
Being sustainable is a virtuous cycle. People want it (your consumers, your employees, your community). When you deliver, they’ll expect more as they’ll like what you’re doing and you’re adding value to their purchase.
And the value doesn’t always add cost if you’re creative. Add to that sustainability-marketed branded products enjoy a significant price premium of 39.5% versus their conventionally marketed branded counterparts.
Sustainability unites consumers with companies. The more attuned your company is, the more successful you will be going forward. Just remember the three P’s: people, planet, and product. And, perhaps, add a fourth – profit.