Consumers are increasingly demanding more sustainable products. A prime example is Kingfisher, the company behind Screwfix and B&Q, which recently reported that nearly half of its sales come from products that are either sustainable or offer sustainable benefits to its customers. This shift in consumer behaviour underscores the importance of sustainability in enhancing business reputation and driving sales.
Impressively, over £6.4 billion of group sales now come from Sustainable Home Products (SHPs), accounting for nearly half (49.4%) of total sales. Kingfisher defines SHPs as products that help lower environmental impact and offer sustainable benefits to customers.
Key Consumer Insights into Sustainability and Reputation
A recent RepTrack report also confirms that ESG (Environmental, Social, and Governance) factors are among the top three considerations for consumers when buying from, trusting, or recommending a company. This global report features major players like Lego, Adidas, and Harley Davidson among the top 100 companies for reputation, highlighting their strong commitment to sustainability.
Key takeaways from the report include:
- Consumers expect businesses to advance sustainability regardless of their business goals.
- Sustainability is a long-term commitment with more companies publicly pledging to it.
- Consumers now demand social initiatives from companies in addition to environmental efforts.
- To attract millennials, companies must prioritise sustainability.
Why this matters for your business
The expectations set by leading companies influence the entire market, including supply chains. Consumers buying from sustainable giants like Kingfisher are likely to expect similar commitments from smaller businesses.
The need to report and commit to sustainability themes becomes critical, irrespective of business size.
Expert Insight: Authenticity in sustainability communications
Siobhan Lavelle from Cornelle Communications, an expert in reputation management, emphasises the importance of authenticity in sustainability communications. She states, “Companies who can be authentic in their communications on the Sustainability agenda will have the competitive advantage. Understanding clearly who they are as a company, where their impacts are, and where they want to go, and ensuring they are able to communicate this without greenwashing, is what customers will look for.”
Consumer Demand for Sustainable Products
Research by Ashley Reichheld, John Peto, and Cory Ritthaler in “Consumers’ Sustainability Demands Are Rising” (September 2023) highlights a major shift in consumption patterns. Consumers are starting to see sustainability as a baseline requirement for purchase.
Three key factors driving this shift include:
- Trust drives behaviour and business outcomes
- Trust influences consumer behaviour and business success. Trusting customers are more likely to choose a brand over competitors, buy it again, and promote it. Highly trusted companies can outperform others by up to 400% in market value.
- Sustainability promotes trust, especially among younger generations
- Sustainability is a significant driver of trust, particularly among younger consumers. Gen Z and Millennial customers are more likely to purchase from brands that care about their impact on people and the planet.
- Younger generations will soon dominate purchasing power
- By 2030, Millennials and Gen Z will surpass Boomers in purchasing power. Brands must demonstrate humanity and transparency in their sustainability efforts to earn their trust.
Practical Steps for Businesses to take
To use sustainability to enhance your business reputation, consider the following steps:
- Publish an Annual Sustainability Report
- Detail your environmental impact, social initiatives, and governance practices. Highlight progress towards set goals and future plans.
- Engage in Transparent Communication
- Regular updates on sustainability efforts via newsletters, social media, and your website can keep stakeholders informed and engaged.
- Highlight Sustainable Products and Services
- Clearly label and promote products that are eco-friendly or have a reduced environmental impact.
- Leverage Social Media
- Share stories about your sustainability efforts and how they benefit the environment and society.
- Participate in Sustainability Awards and Certifications
- Apply for recognised sustainability certifications and awards to gain external validation and credibility.
- Collaborate with NGOs and Environmental Groups
- Partner with organisations that align with your sustainability goals to enhance your brand image and credibility.
- Implement Green Office Practices
- Encourage recycling, reduce energy consumption, and promote remote working to lessen your environmental impact.
- Offer Sustainability Training and Volunteer Opportunities
- Provide employees with opportunities to learn about sustainability and participate in community service projects.
- Invest in Energy-Efficient Equipment
- Replace outdated equipment with energy-efficient alternatives to reduce utility costs.
- Adopt a Waste Reduction Strategy
- Implement practices to reduce, reuse, and recycle materials within your operations.
- Conduct Regular Environmental Audits
- Ensure compliance with local and international environmental regulations and identify areas for improvement.
- Develop a Risk Management Plan
- Address potential environmental risks and have a clear plan for mitigating them.
- Create an ESG Investment Deck
- Highlight your sustainability efforts, goals, and achievements to attract socially responsible investors.
- Engage with ESG-Focused Investment Funds
- Build relationships with funds that prioritise ESG criteria in their investment decisions.
Incorporating sustainability into your business strategy is not just about protecting the planet or being ‘green’; it’s a smart move for your reputation. By building trust, attracting customers, enhancing your brand image, and improving employee morale, sustainability can drive long-term success and competitiveness. Embrace sustainability not just as a trend, but as a core aspect of your business philosophy, and watch your reputation—and your business—thrive.
At Sustainable X, we support businesses to improve their sustainability, understand their impacts, build a strategy and authentic communication. If you need help that is pragmatic, practical and proportionate for your business, get in touch today to discuss your sustainability ambitions.