Communications

Will your brand be taking a stand in 2019?

Posted by Carlota Esguevillas, Friday, 14 December, 2018

In its landmark report in October, the world’s leading climate scientists warned that there are only a dozen years for global warming to be kept to a maximum of 1.5C. Beyond this, even half a degree will significantly worsen the risks of drought, floods, extreme heat and poverty for hundreds of millions of people. Authors of this report, the UN Intergovernmental Panel on Climate Change, argue that urgent and unprecedented changes are needed.

And yet it seems this message has not hit home. Last week at COP24, the UN climate summit in Katowice, we were hit with the ‘brutal news’ by the Global Carbon Project that global carbon emissions are set to jump to an all-time high in 2018. The US, Saudi Arabia and Russia – albeit unsurprisingly, all refused to fully recognise the findings of the IPCC report. And on Monday, global investors managing over $32tn issued a stark warning to the governments present: without urgent cuts in emissions and the phasing out of carbon entirely, the world faces a financial crisis worse than 2008.

At the same time, we are facing social collapse in almost every aspect of society. New research by the Social Metrics Commission, for example, has found that more than 14 million people, including 4.5 million children, are living below the breadline in the UK. More than half of these are trapped in poverty for years.

Encouragingly, in the face of these mounting issues and pressures, we are seeing a consumer and business revolution. Increasingly, consumers are demanding action and businesses are taking a positive stand on these issues, filling the void left by insufficient regulatory and political will.

This year we have seen consumers boycott plastic on a huge scale, changing their spending habits and behaviours in response to widespread environmental concern. For instance, Ecoffee Cup, one of the UK’s leading providers of reusable coffee cups, reported that its January sales soared over 700 per cent year-on-year amid concern over single-use coffee cups. Similarly, we have seen a trend towards plant-based diets, with an increasing number of reports claiming that a reduction in meat-eating is ‘essential’ to avoid climate breakdown. Reportedly, Tesco has experienced a 40% increase in the sale of vegetarian food this year, and Mintel, a research agency, found that 28% of people in the UK reduced their meat consumption in 2017, even if they didn’t adopt full vegetarianism.

These shifts have been driven by a marked growth in consumer appetite for brands that support a social and/or environmental purpose. The 2018 Edelman Earned Brand study revealed that nearly two-thirds (64 per cent) of customers around the world now buy on belief, a remarkable increase of 13 points since 2017. These belief-driven buyers will choose, switch, avoid or boycott a brand based on where it stands on the political or social issues they care about. This belief-driven mindset is now the majority in every market surveyed, across all age groups and all income levels. Similarly, research by Unilever has found that a that one in five would choose a brand if its sustainability credentials were made clear on packaging or marketing – which could be an indicator for where things are going.

In the face of stagnant regulatory and political action, there is a huge opportunity for business to take the initiative. The 2018 Edelman Earned Brand study also found that 64% believe CEOs should take the lead on change rather than waiting for governments to impose it, and 53% believe brands do more to solve societal ills than governments. Indeed, taking a stand is good for business – companies that put purpose on a parallel with profits grow much faster than their peers. Unilever’s Sustainable Living Brands are a well-used example but rightly so, having grown 46% faster than others in its portfolio, delivering 70% of turnover growth in 2017. Similarly, recent research has shown that B-Corporations, businesses that meet the highest standards of verified social and environmental performance, grow 28 times faster than the national average.

Opting out of taking a stand is no longer an option for brands. A brand can choose its stand from across a spectrum of actions – for instance, by defining a clear purpose or engaging in activism. From Unilever’s Sustainable Living Brands and Lloyd’s ‘Helping Britain Prosper, to Patagonia’s environmental activism, and more recently Iceland’s stand on Palm Oil (I’m sure you will have seen their recently banned Christmas advert), brands everywhere are taking a position on the issues that matter to them and their stakeholders.

Needless to say, it is not enough to say one thing but do another. It is crucial that a business’ sense of purpose is genuine. It should be the ‘North Star’ that drives business decisions and everyday actions. Patagonia are a great example here. Not only does it operate a circular business model, but their actions consistently align with their activism. For example, the company was recently poised to save $10 million due to a federal tax cut. Rather than investing this back into the company, Patagonia pledged $10 million to different non-profit environmental groups “committed to protecting air, land and water and finding solutions to the climate crisis.”

Companies that neglect to embrace these changes and new expectations may ultimately find that their products become less relevant to consumers. Further still, people’s belief in brands as a force for good provides a unique opportunity to help consumers live their best lives and drive mainstream sustainability.

If you are interested in how your business can develop and align to a social and environmental purpose, please get in touch.

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