There is an obvious reason for businesses to be sustainably-focused in this day and age. The world is more conscious than ever about human, social, economic and environmental drivers. This topic – which already had a growing presence – has sharpened in focus in 2020.
The need to take a stance is clear for many businesses and is clearly on the conscience of business leaders; however, the drive to invest in it can be overwhelmed by day-to-day drivers – particularly in the current climate where COVID-19 is having such a massive impact.
Businesses large and small may have a desire to make changes, but the impetus to move forward can be stifled if business owners and managers are not able to step back and consider why the return on investment sooner rather than later may be beneficial. In this blog, we take a commercial viability view – how sustainability impacts brand trust and how that better positions businesses in a VUCA (Volatile, uncertain, complex and ambiguous) world.
2020 as a year of need for ethical alignment for consumers
Prior to the pandemic, the 2020 Edelman Trust Barometer, compiled from fieldwork conducted between October and November 2019, stated that 2020 brand trust was based on Competency and Ethics. The consensus was that there was a growing sense of global inequity with businesses scoring higher than Media, NGOs and Governments on the competency scale, but falling down when it came down to being ethical. Distrust in businesses in the UK was at 47%. Given that at this point, ethics were seen as 3x more important to trust in a company than competency (76% vs. 24%), 2020 was already looking to pan out as a challenging year for gaining and retaining business.
The COVID-19 impact on customer trust
In March, COVID-19 was a reality as the UK – like much of Europe and indeed the world – went into lockdown. At this stage, Edelman released an additional special report into Brand Trust and the Coronavirus Pandemic. Amongst the headlines, was a statement that 81% of people surveyed believed that being able to trust the brand to do what is right was a deal-breaker or deciding factor in their buying decision. Although this was more directly related to the pandemic, when we consider the 17 UN Sustainability Goals, COVID-19 falls squarely into Goal 3 – Good Health and Wellbeing with a knock-on effect being seen in various other areas (More information provided below) in combination with a pre-existing distrust in businesses, it is a fair assumption that businesses already needed to build bridges by taking a more ethical approach.
The current impact of brand trust for businesses
In November 2020, Edelman released another Trust Barometer Special Report on Brands in Crisis from data compiled in late October. In this report it became very clear that trust has become more and more important, with 60% of people surveyed stating that they were turning to brands that they are absolutely sure they can trust and 63% choosing, switching, avoiding or boycotting brands based on their stand on societal issues. Trust has now become the 2nd biggest purchasing driver at 88% (behind only quality and value for money).
Fear has become a huge driver in the buying process – many aligned to wider sustainability issues. Although the more obvious growing impact of climate change is up 23 points, other matters that fall within UN Sustainability Goals are there in plain sight, such as education (+27), health (+36) and violence and civil unrest (+27).
We are now in a time where there has been a wide-scale shift in values. People want to protect their families more (+42), help other people (+24) and work towards making the world a better place (+22). Consider the fact that they also want to make smarter purchasing decisions (+36), it is an easy assumption to make that the fear-factor and the shift in values will have a considerable impact on said purchasing decisions!
Social (or societal) sustainability is defined as including human rights, fair working practices and work-life balance, living conditions, health, safety and wellbeing, diversity, equity, community engagement, philanthropy, volunteering, amongst other things. The report clearly states that consumers (of which every purchaser – personal or business – is one) expect businesses/brands to solve societal problems – this is at 89%.
In the UK alone, people report on wanting to businesses to address some very critical social sustainability issues:
- Climate change/environmental (42%)
- Poverty (36%)
- Systemic racism, injustice, discrimination (32%)
What this means for you and your business
More than words
The old adage, ‘actions speak louder than words’ is a very real thing. It is simply not enough to say that you are sustainable, environmentally-friendly, ethical. For businesses to gain sufficient trust in their brand to sway the purchasing decision, they need to be able to clearly demonstrate they are doing something. According to Edelman, in the UK, a brand taking actions will engender trust from 70% of people (over those brands making public promises and communicating what they intend to do).
Purpose as a reflection of the opinion
Aligned ethics have become more important for businesses. At the same time as people moving into a place of purpose-driven purchasing of products and services, seeking out brands that align with their own set of values – businesses need to react accordingly to retain loyalty and attract new business.
Accenture Strategy’s Global Consumer Pulse Research in 2018 had already found that 62% of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices. The trend has moved forwards in 2020.
- A May survey by Accenture reported that COVID-19 likely to prompt era of “ethical consumption” where 45% of consumers said they were making more sustainable choices when shopping and would likely continue to do so.
- An IBM study this year found that purpose-driven consumers now represent almost half of shoppers with 57% willing to change their purchasing habits to help reduce negative environmental impact.
- According to Huffington Post, 61% of millennials are worried about the state of the world and feel personally responsible to make a difference. It is thought that c.50% of the UK workforce falls into this category and they have been the largest generation in the workforce since 2017.
Employees as ambassadors
The ongoing success of your business is highly reliant on your employees – for obvious productivity purposes, but also in the knowledge that your people are trusted brand advocates. Content shared by employees receives 8x more engagement than content shared by brand channels. We’ve already discussed how people expect businesses to solve societal problems, but this includes personal challenges too. 27% of people in the UK want businesses to help them with the challenge of helping their family pay bills, stay fed and housed and 33% to stay employed through the pandemic. Given that your employees are consumers too, combining these needs with their societal drivers, embracing a culture of adopting brand trust can help your employees feel more loyal to your business and contribute more towards making your business survive and thrive.
10 next step recommendations for your business
- Understand the drivers of your audience – your business will have specific areas in which their environmental and ethical impact is most relevant, by understanding the beliefs and opinions of your target demographics you will be able to more easily prioritise your strategy and adapt your marketing and communications to emphasise alignments.
- Facilitate transparency – being open about the way you operate is essential. 66% of people are attracted to organisations that are transparent about with where it sources its materials, how it treats employees fairly, etc.
- Live your values – Your sustainability vision and mission needs to be a true reflection of your identity as well as realistic and achievable. Once established you can use it to reach beyond saying what you are to demonstrate authentic action. 62% of people are attracted to organisations that have ethical values and demonstrates authenticity in everything they do.
- Communicate during and after, not before – Trust has never before more than it is right now, given based on action. Your corporate and social responsibilities won’t be regarded as a tick-box exercise any more. Now is the time that what you are doing and what you have done matter more than what you say you’d like to do. Real people want to see real things.
- Demonstrate your humanity – in this era of perceived crisis, empathy and acceptance of a level of responsibility is deemed as admirable. Sincerity breeds trust.
- Accept your role in community – be it global or local, people are more comfortable spending their time and money with businesses that are making a tangible difference. Identify causes that are aligned to your beliefs, build affiliations and meet and exceed your audiences’ expectations to build loyalty.
- Take your employees on the journey – your employees are now one of your truest voices and advocates for your brand. Great employees (talent) look for social responsibility and environmental commitment when selecting employers and engaged employees are 18% more productive.
- Create new cultural norms – leaders define culture by embodying values, fostering norms, and turning them into shared behaviours, establishing your approach to this with strong sustainable beliefs carves a leadership position that can not only sit within your business but also within your sphere of influence, building your brand reputation. Be the role model people want – start change at the top.
- Be consistent – inconsistency breeds distrust. Do what you say you’re going to do, when you say you’re going to do it and be congruent with your communications. Sustainability isn’t something that can be picked up and put down. Make sure your customers can have faith that your commitment is real.
- Build sustainability into your DNA – build sustainability into every element of your business. Businesses that aspire to be ethically and ecologically sound can have more impact from long-term, bottom-up business planning to integrate sustainability into the core of a business than through piecemeal changes over time.
Making the shift to embracing a sustainable approach to business can be a daunting prospect for many. Something that starts as a well-meaning desire to react to environmental and ethical drivers from a personal opinion can fast become overwhelming in the commercial world. Businesses can greatly benefit from modelling and process experience and specialist practical advice.
We have a plethora of ways you can take steps to implement a sustainability approach and invite you to talk to us over a fair trade brew to discuss some ideas.