3 MINUTE READ
Sustainability is a funny word.
It gets thrown around to mean green, eco-friendly, good for the environment. Yet, I’m not sure we really know what it means.
In my previous life as an energy analyst, we for sure had to know what sustainability meant for our energy company and how we produced and impacted our environment.
Sustainability is most often defined as: meeting the needs of the present without compromising the ability of future generations to meet theirs.
Sustainability emerged as a component of corporate ethics in response to perceived public discontent over the long-term damage caused by a focus on short-term profits. Here’s a really great source on corporate sustainability.
It’s most definitely a feature of a brand, to show they have a plan or take action to create a better world.
What it shouldn’t be is a marketing term to earn favor.
The standard for sustainability can be self-determined by a brand/company or a 3rd party assessment, if a brand can get certified in their field. If a company cannot be certified, you may realize each brand/company has its own standards for sustainability. And without a standard everyone can define it as they see fit.
Why would brands/companies choose sustainability?
There are many companies that really do incorporate it in their entire process, that take the time to consider and act in the most sustainable way.
- Brands truly know they respond to consumers. The 2 youngest generations today, Millennials and Gen Z, care about the social and environmental impact businesses have on the world.
- Brands that maintain code of ethics or don’t answer to (many) shareholders may have the opportunity to be more selective and sustainable.
- Sustainability is where many brands can innovate and become new and unique producers.
- There is also a great deal of research that supports how companies that are “sustainable” are also more profitable.
This is the nature of business and markets, and if this is something important to your decision making, I only want to help navigate the field.
Why would brands/companies not choose to be sustainable?
- It can be quite hard and expensive to pursue all 3 pillars of corporate sustainability: Profits, Planet, and People. Some industries can have difficulties working within the goals and staying afloat.
- There’s a great demand for sustainable practices, and producers really must balance the costs associated.
- Would you pay more for a product if there were higher costs due to sustainability practices? Many consumers say yes, but also look for transparency to be sure.
- There is also the cost of competition, if you are sustainable and higher priced and competitors are not, giving them ability to be lower priced. A company must adapt to the market within which they operate.
Okay I realize that was a bit business-y, not only was I an energy analyst but I teach business and finance at the college level as well!