Profit To Purpose-Driven Marketing
The COVID-19 pandemic has brought a shift in the corporate thought process and increased the purpose over profit in marketing putting social sustainability at the core of their decisions. Sustainability in business has become synonymous with business empathy, purpose, and resiliency and this has led the corporates to think and re-evaluate the purpose of their businesses on a deeper level. The corporates need to find a sustainable balance between people, planet, and profits, the so-called triple bottom line, along with empathetic and open communication to survive in the long run. They are under pressure to help build a future that is healthier, socially inclusive, and more respectful for consumers, embracing business models that have an overall positive impact on society.
The COP26 Summit started on 31st October 2021, which many consider the most important climate conference since 2015. According to the World Economic Forum, more than half of the world’s total GDP, around USD 42.4 trillion, is moderately or highly dependent on nature and therefore exposed to climate change.
The question arises with the given magnitude of the climate challenge, how businesses will find the right balance for corporate sustainability?
Sustainability often comes at a higher price; businesses need to find the right balance with the power of creativity and innovation to come up with sustainable products and services that are also affordable in price-sensitive emerging markets. Companies are required to realign their business models for net-zero carbon targets for 2050 or earlier, to invest in supporting their suppliers to transition to low-carbon de-risking investments, and to bring down technology costs which are all fundamental steps towards a successful decarbonization strategy.
The lifestyle changes on the consumer front are required to protect the planet for future generations. Brands that want to stay operational and profitable in the next 50-100 years, need to take things seriously. The companies have invaluable assets beyond their balance sheets that need to be prioritized and protected and this is not philanthropy; it is investing for the future. In twenty -twenties current decade, consumers' ecological and social concerns will put more pressure on businesses to act and protect the health and wellbeing of both people and the planet with purpose.
Companies Investing in the Purpose-Driven Marketing
The current climate challenges present risks to business operations, they also bring vast growth opportunities. The acceleration of the digital shift is set to play a key role in the transition towards purpose-driven businesses that aim to provide societal and environmental benefits alongside stronger financial performance and brand reputation. Investment in digital tools will enable supply chain transparency, eco-consciousness products and services, greater
collaboration, and decision-making, which have the potential to boost corporate sustainability credentials.
The consumers' shopping behaviors are getting reinvented, and the shift is happening to safety, hygiene, wellness, and sustainable living models, where consumers are willing to put their money in comparison to other areas. Lifestyles and purchasing decisions are increasingly being shaped by environmental concerns. As the consumers' awareness about climate change grows, companies must increasingly communicate products’ environmental impacts using carbon footprint labels. The green strategies previously adopted by niche companies are now crucial for other companies for their long-term resilience.
Several companies have tried to launch and expand efforts to better communicate the environmental impact of their products and services with shoppers. Tech giant Logitech introduced carbon labelling to products for the first time in 2020. Experts believe that carbon labelling could soon become mandatory for certain products, and the growing number of big businesses will adopt the approach, eventually creating critical mass. Both Nestle and Premier Foods are exploring a carbon labelling rollout.
The health, beauty, and apparel companies have started investing in sustainability for brand reputation. Companies, like L’Oréal and Chanel, have unveiled new climate targets and commitments, ranging from achieving carbon neutrality to using 100% renewable energy and ensuring that all plastic packaging comes from recycled or bio-based sources. The demand for transparency has soared and brands are testing ways to help consumers understand the climate impact of their purchases. L'Oréal-owned brand Garnier is to launch a digital tool and sustainability labeling scheme in the UK, that provides a product's environmental information of its haircare products such as carbon footprint by scanning QR codes in products’ labels. Garnier has already launched last year a similar tool for customers in France and has been visited by more than 2.6 million people.
Allbirds, New Zealand-American B-Corporation certified apparel and footwear company, renowned for its eco-friendly trainers made from sustainable materials. It measures each shoe’s carbon lifecycle, claiming a standard trainer emits 12.5 kg CO2e (CO2 equivalents), whereas an Allbirds average shoe emits just 7.6 kg CO2e. In 2020, the company teamed up with designer Jeff Staple for a limited range of carbon footprint-embossed trainers. This innovation is proof that combining transparency, style, and sustainability is profitable for footwear brands.
Sooorya EV, an eMobility start-up based in Singapore, is developing a purpose-built 8-seater electric taxi specifically for the ride-hailing industry in the Emerging markets, African and South American markets. Sooorya hopes its electric taxi can help solve the first- and last-mile problem by connecting transit points such as metro, bus, and rail stations to business districts, commercial centres, and other congregation zones. The shift to shared and electric mobility is also expected to improve air quality in developing economies, which tend to have a large array of old fossil fuel vehicles. In the coming years, the number of new electric vehicle registrations in selected major ASEAN, African, and South American markets will rise 25-fold due to rising incomes, the increasing affordability of electric cars, and the growing installation of electric charging stations.
Giki, which stands for “Get Informed, Know your Impact” is a UK-based start-up that aims to help consumers and businesses to be more sustainable. Giki Zero is a free app that helps consumers understand, track, and reduce the carbon emissions associated with their lifestyles. It has already been in high demand with 84% of the 10,000 users on the platform changing their shopping behavior as a result of using Giki. In August 2020, the company launched a Pro version that allows companies to create teams and run campaigns to help employees to understand and reduce their carbon footprint. The app can be used as a tool to increase transparency, as data generated can be shared with key stakeholders.
Felix is a Swedish brand owned by Orkla Foods Sverige AB, one of the largest Nordic companies within the food industry. The company opened the world’s first pop-up climate store (Klimatbutiken) in Stockholm, where products are priced according to their carbon footprint (CO2 emissions). Consumers pay using CO2 equivalents instead of money, and they have a weekly budget of CO2 to limit their carbon footprint. The “Low Climate Impact” labels help consumers identify and select products that are better for the planet. This is a way of helping consumers understand the climate impact of their weekly grocery shop.
Dow Chemical Company is one of the world's largest manufacturers of plastics, chemicals, and hydrocarbons and its subsidiary Dow India in October 2020 launched Rethink+, a digital plastics takeback program that enables consumers to recycle plastics using a mobile app. Consumers taking part in the program have listed their recyclable waste and scheduled a doorstep collection or drop-off items at a collection centre while earning reward points for online vouchers. The first pilot study was conducted in the city of Pune, and the app has collected 810 tonnes of plastic waste in five months.
The global furniture company IKEA announced an additional EUR 4 billion investment to scale solar and wind projects. With this project, the company aims to power the entire value chain with its renewable capacity and become climate-positive by 2030, while still growing the business. Reaching these goals requires a high level of collaboration with suppliers and the company also announced a new renewable energy program for suppliers. The program will accelerate the transition to renewable energy of 1,600 of its direct factory suppliers in India, China, and Poland. This initiative shows the concern from the private sector to fight against climate change happening in the world.
Unilever- FMCG giant in March 2021 published its Climate Transition Action Plan to decarbonize the business and to achieve net-zero emissions by 2039. The company aims to achieve net-zero emissions within operations and halve the climate impact of its products across the supply chain by 2030. The company launched a new OMO (Persil) laundry capsule detergent in China, made from industrial carbon emissions obtained via carbon capture technology. Using advanced biotechnology, carbon emissions are captured and converted to ethanol, which is then converted into a key feedstock to make surfactants. This innovation cuts the greenhouse emissions from ethanol production by 82% compared to traditional fossil fuel processes. This initiative is part of its USD1.2 billion clean future strategy, in which the company seeks to eliminate fossil fuels in its product manufacturing processes by 2030. The company plans to transition to renewable energy, eliminate fossil fuels from its cleaning products, and reduce corporate travel and refrigeration emissions.
Global consumers have started preferring to buy brands that embrace purpose and sustainability, and global companies require to harness the power of sustainable marketing to drive profits with purpose, giving back to the planet with each purchase. Companies that are investing in the right pockets of sustainable business with social inclusion and environmental sustainability at the core of every decision, will be more resilient to future social and environmental risks and will become smart businesses.
Whether your company is ready to invest in the right pockets of opportunity driven by the purpose for corporate sustainability?
*The Author is a Professor, Corporate Trainer, & Dy. Director (Alumni Relations) at Amity University, Uttar Pradesh (AUUP), Noida Campus, India. The views expressed are personal
