In 2016, green brands are no longer a novelty. Yet, with environmental issues continuing to make headlines, governments under constant pressure to reduce their carbon emissions and businesses now expected to take on a certain level of social responsibility, it’s not surprising that sustainability has started to influence customer decisions.
But, how powerful really is the green brand? Some successful businesses have built their brands entirely around the green mantra, but could adopting it yourself just be setting your business up for a very untimely fall from grace?
Time to jump on the green bandwagon?
With climate change now regarded as one of the most important issues of the modern era, many companies are starting to incorporate the sustainable ethos into their business plan.
Back in November 2010, Unilever launched a new brand campaign called Sustainable Living Plan (USLP). A particularly ambitious global strategy, the plan involved the company doubling in size while halving its carbon footprint at the same time. A year later, all of Unilever’s US operations had switched to purchasing their energy from certified renewable sources and more than half of their sites worldwide had achieved zero non-hazardous waste to landfill. By the end of 2012, they were 36% of the way to reaching their target of sourcing all their agricultural raw materials sustainably. In the same year, the multi-national’s 2012 Progress Report announced a 10.5% turnover increase, outperforming its competitors, despite the recession.
So, was Unilever’s success just a one off? Well, according to the 2015 UK Ethical Markets Report, the value of ethical sales has grown by 8% over the past year, at a time when inflation barely rose above 0.5%. Sales of environmentally friendly products have also risen, with sales of hybrid, electric and other tax-banded A-rated cars growing by 40% and spending on solar panels rising by nearly 25%, indicating that the market for ethical products is certainly growing in popularity.
What’s more, the 2015 Nielsen Global Corporate Sustainability Report revealed that rebranding your business as sustainable could be the key to future growth. In the past year alone, sales of consumer goods from brands which demonstrated a commitment to sustainability have grown by more than 4% globally, while in contrast, those without grew by less than 1%. In fact, 66% of global consumers actually said they’d be willing to pay more for sustainable brands – up from 55% in 2014.
With green brands appearing in a good position for future growth, it would seem making a few sustainable commitments of your own would certainly be good for business, but is it achievable?
Avoiding greenwashing scandals
As you can imagine, with customers claiming they’d be willing to pay more for the services of a sustainable company, many businesses have been trying to capitalise on giving their brand a green makeover.
From advertising products as eco-friendly to making a few sustainable pledges – surely this easy marketing angle is great for business? Well, only if you can back it up.
Unfortunately, some businesses have decided to adopt the green label without adopting any green practices. This is known as greenwashing – when a company pretends to be eco-friendly but is, in fact, not.
Last year, Volkswagen admitted to rigging 11 million of its own vehicles, which were marketed as ‘clean diesels’. The company subsequently reported its first quarterly loss for 15 years, amounting to a setback of €2.5bn (£2.26bn). The repercussions of the emissions scandal are still ongoing, with the company facing billions of dollars’ worth of fines, and their lead engineer facing up to five years in prison.
With the Nielsen Global Corporate Sustainability Report revealing that 62% of consumers name brand trust as their top influencing factor when it comes to sustainability brands, it’s clear that falsely representing your business as eco-friendly could quickly backfire.
As an increasing number of consumers start to make more sustainable choices, it’s apparent that having a green brand could help to drive more business in your direction. However, using the ‘green’ mantra as your brand’s USP also sets the bar high in terms of customer expectation, so before your business starts marketing itself as eco-friendly, you need to decide – can your business really live up to it? Either way, being more sustainable behind the scenes can also benefit your business, whether you’re looking to cut costs or simply benefit the Earth.
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