Why do companies go green? 

Going “green” or being environmentally sustainable is a concept that has grown rapidly over the past decade. The news cycle constantly informs us about issues like wildfires, pollution and extreme weather, prompting people to adopt habits and practices that will benefit the environment, including recycling, composting and going plastic-free. This has affected consumer buying behaviour to the point where the majority are seeking to support brands that share their values and include environmental sustainability in their business model. A US study from 2021 showed that 8 in 10 consumers believed that sustainability was an important attribute for brands.  A 2021 Deloitte UK survey revealed that 28% of consumers stopped buying from brands that were deemed unsustainable.

Going green is far from a fad. Twenty years ago, the common strategy for businesses was to be online while ten years ago, going mobile was needed for brands to survive and compete. Today, environmental sustainability is an effective way to legitimise a brand and showcase a serious commitment to what consumers care about — the world they live in. “The transformational challenge is to make “green” a part of the DNA of the enterprise, just the way companies had to make globalisation and digital technology a part of nearly every business consideration,” says Andrew L. Shapiro, founder and CEO of GreenOrder.

How going green can benefit a brand

Brands become sustainable by operating a business that doesn’t harm the environment. This approach can benefit a brand in a number of ways.

Morality and ethics

By showing responsibility in its business dealings, brands communicate to consumers and their own employees that profit isn’t the only driving force — protecting people and the environment are important too. Consumers gathering information about how to be sustainable often look to brands to lead the way. A 2021 UK Deloitte survey conducted showed that consumers want to act more sustainable yet want brands to take charge — 64% of consumers wanted brands to reduce packaging, 50% wanted clear information on how to recycle and 46% needed clarity on the product sourcing.

It can reduce long-term costs

A brand preparing for its own future reduces the risk of being left behind and secures profits for its business — this may mean investing in green initiatives in the present. Swedish brand IKEA phased out non-rechargeable alkaline batteries and replaced them with new LADDA rechargeable batteries, reducing waste and saving money in the long term. There are also ways to save money and go green by making simple changes in an office environment such as switching out plastic bottles for a filtration system or changing bright bulbs to energy-saving LED ones. In addition, there are many tax incentives given to companies that go green.

It improves brand value

For a brand to continue to be successful, it needs to be relevant and share core values with its consumers. A brand that aligns with a message of sustainability, and follows through with action, will increase its appeal to consumers and raise its demand. A good place for inspiration is to look at what established brands are achieving in this area.

IKEA is a giant producer of various goods. Unlike similar brands who are struggling with their sustainability ranking, IKEA ranks well amongst consumers for theirs. This is due to the work at reducing their environmental impact by:

  • Phasing out single-use packaging in all stores
  • Converting all lighting in stores to LEDs
  • Using either Forest Stewardship Council®-certified (FSC®) or recycled wood for 99.5% of IKEA products
  • Committing to using only renewable and recyclable materials by 2030.

IKEA’s efforts have proven successful — in 2019 their carbon footprint decreased as their sales increased.

Lush Cosmetics

Lush is one of the most well-known sustainable and eco-friendly brands in the world, with a huge, dedicated consumer base. As a cosmetics company, they have pioneered products with natural ingredients that are still high quality and shun any animal testing or harmful chemicals. Lush apply this same concept to their packaging by selling shampoo bars instead of using plastic bottles as well as encouraging consumers to return used tubs to earn rewards. Their sustainable policy is unique for also including consumer action, increasing their brand power.

By making environmental sustainability a priority, a brand can ensure its own longevity. When a consumer notices that a brand is taking charge of its own environmental impact, it opens the door for long-term growth and lasting relationships.

Cover Photo by Noah Buscher on Unsplash

References:

10 Global Companies and Their Brand Sustainability – Laura Harker

Green Brands: Eco-Friendly Companies to Learn From – Fabrik Brands and Marketing

IKEA Sustainability Report 

Myth vs. Truth: Sustainability as a Tenet of Brand Value – Benjamin Hone

Shifting sands: Are consumers still embracing sustainability? – Deloitte UK

Sustainability and its Impact on Brand Value – Paul Nastu

2 responses to “Why do companies go green? ”

  1. An excellent post! Really highlights the benefits of businesses moving towards sustainable production methods. Some are starting to realise that going green isn’t just good for the environment, but an excellent way to save money and even generate profits!

    Liked by 1 person

    1. Thanks Jan! I appreciate the comment. It’s a great sign that companies are looking towards going green as an integral part of building and maintaining business as well as saving Earth’s resources. Brands have so much power and, this way, they can positively influence change among the public and spread awareness.

      Like

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