by Colwyn Elder (@colwynelder) Economic efficiency is environmental efficiency’s quick win when convincing hard-nosed business practitioners about the benefits of investing time and money in sustainability initiatives. What better case than a direct financial ROI that goes straight to the bottom line?

Colwyn ElderIt’s the language of business and shareholder value, and is an argument that has gone a long way towards getting companies to take sustainability more seriously.

Pioneered sustainability in retail

Marks & Spencer in the UK pioneered sustainability in retail when it launched its Plan A programme in 2007. And, just five years later, it reported a net profit of US$286million, directly attributed to the initiative.

It made a good case; however, the company was quick to cite other benefits beyond savings, such as the creation of job opportunities and being perceived as a more attractive employer in the eyes of potential employees.

These longer-term benefits, such as improved recruitment and retention of talented employees, are not limited to cost saving; a more motivated, engaged and inspired workforce also means increased productivity plus loyalty. And, on the subject of loyalty, one would hope to retain customers as well as staff, but the jury’s still out on this one.

While there is an increasing customer expectation for companies to adopt more sustainable business practice, consumers remain fickle and price sensitive when it comes to opening their wallets.

Innovation another benefit

Another benefit cited in the business case for sustainability is innovation, and it’s here that customers do actually sit up and pay attention.

Unilever’s “Small and Mighty” washing liquid for example, concentrates the same number of washes into a bottle one third the size — which means one third the packaging, one third the water used, and one third the transport needed, when compared with other diluted liquid detergents.

When it first launched, this product innovation provided a strong competitive edge and gave customers a smart new choice they could feel good about. And here lies the real opportunity presented by sustainability: an opportunity to rethink how you do business.

The notion of creating shared value for business and society continues to gain traction, and John Gerzema of WPP’s BAV Consulting can put some real numbers to it. For the past 20 years, BAV (Brand Asset Valuator) has been tracking the way consumers perceive and value products and services around the world, interviewing 500 000 consumers and 50 000 brands across 50 countries on more than 75 brand metrics.

Consumer attitudes in serious decline

In 2004, just over 10 years into the data, Gerzema discovered that consumer attitudes about all sizes and segments of brands were in serious decline, as reported on strategy+business.These drops were “significant and across the board”, encompassing the entire range of consumer goods and services, from airlines, automobiles and beverages to insurance companies, hoteliers and retailers.

“We found that the consumer ratings on four key classical attitudes toward brands — trust, awareness, regard, and esteem — were tumbling. Generations of marketing professionals have long accepted these four attributes as the defining measures of brand health, which they refer to as brand equity”, he writes on strategy+business.

Having dug deep into the data, Gerzema attributes this decline to three fundamental and interlinked causes: excess capacity (the world is overflowing with brands), lack of creativity (people expect big ideas faster), and perhaps most significantly, a loss of trust.

So what’s the answer?

Read with caution

According to BAV, the key to success is relentless differentiation and new ideas. But read with caution, as innovation for innovation’s sake can be viewed as gimmicky and superfluous.

On the flip side if you’re looking for innovation that is both smart and relevant to your customer, the land of opportunity lies in that place where your business rubs up against the needs and challenges of society.Create value for people and, at the same time, create meaning by doing something that matters.

Y&R strategy director Colwyn Elder (@colwynelder) has over 17 years of experience in strategic planning, together with specific credentials in sustainability communications, social marketing, corporate social responsibility and cause-related marketing. She contributes the monthly “Green Sky Thinking” column on sustainability issues to MarkLives.

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