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How your brand can become a sustainability leader
Last week our London CEO Joe Hale spoke at New Frontiers in Corporate Sustainability Leadership, an event organised by The Carbon Trust and Department for International Trade (DIT) in Düsseldorf, Germany. The event was attended by top global corporations such as Vodafone, Thyssenkrupp, Ford, E.ON, National Express Group and LUSH Cosmetics.
Joe was asked several key questions on the importance of sustainability for businesses, how they can best communicate on the subject and what businesses can do to take leadership in this space. Here’s a summary of his answers:
Q. Why is sustainability important for business?
JH – Sustainability is now about proactivity and opportunity rather than just defensiveness. It’s about doing more good things, and no longer about doing fewer bad things. Beyond the obvious increase in legislation and governance, I think there are two factors that make it critical to businesses:
Perception and Growth
Perception – A brand’s commitment, progress and position on sustainability is now a core measure of reputation and has a huge influence on consumer attraction, trust and advocacy.
Sustainable products and services are more aspirational and accessible. What was once deemed as inferior quality is now a new premium. It’s a sea change in society. That’s why we’re seeing the rush from companies to accelerate their communications on sustainability with the hope of better aligning themselves with an ever more informed, enlightened and expectant generation.
Then there’s investor perception too. Shareholders and investors are increasingly looking for companies that demonstrate resilience, strong governance and sustainable, long term growth – in a post Fink era.
And finally the perception of talent. Without a clear position, strategy or commitment on sustainability businesses will quickly be overlooked and rejected by talent. So it can help you keep and pull the best people.
The second key point is Growth – because at its heart this is about business process improvement, innovation and staying relevant. The new demands mean companies are having to rethink conventional models and redesign services to ensure growth in the medium to long term. Growth that is decoupled from waste generation.
The more progressive companies recognise that the sustainability era is not just one of risk mitigation. It’s an era of profound change in what makes good business. Ethically, economically and environmentally. The tables have turned and expectation set. Not by businesses on the fringes but thankfully, and finally, but high street giants that now understand that this is an essential means of survival, let alone growth.
Q. How can businesses become sustainability leaders?
JH – The first thing I would say is strong leadership and buy-in from the top of the organisation. We’re in an era of super leaders who recognise that sustainability and purpose can transform businesses and brands from the inside-out. You see it at Vodafone, Danone, Renault and IKEA to name but a few.
But the work on the ground is as crucial as it is in the boardroom. Because system change (across your value chain) is where the battle for leadership lies.
That starts with understanding all the points or nodes on your value chain that matter most. And knowing where to shine the light, redesign and drive improvement. Look at your impact, indicators and risks across the whole system. And ask how would our consumers, shareholders or employees feel if this was on the front page of the national paper tomorrow?
Key to addressing these issues will be working in concert with partners and suppliers to analyse and adapt material flows so that they minimise waste and keep materials in the cycle for longer. That way companies can both drive efficiencies and lower their total impact.
If you take AkzoNobel for example – just 15% of their environmental footprint sits within their control. So they are working with their suppliers and partners to make their whole value chain 25-30% more efficient. Innovation is obviously critical here. Technology can make a huge difference and they’re investing large amounts in biocide free coatings and water based solutions that are better for the environment – above and below the waterline – whilst also driving fuel and cost savings for their customers. They’re also exploring how they can use household waste as feedstock for their chemical plants. Lower carbon and heat intensive inputs means better outputs all round.
Q. How should businesses communicate sustainability?
JH – Not by solely reporting, that’s for sure. Reporting will always have its place don’t get me wrong, but we’re much further on now.
It’s about action.
Society is demanding action in all walks of life and action from business is critical as governments can and will only get us so far.
And if there’s one positive that can be drawn from the fragile state we find ourselves in it is that resource scarcity will only accelerate the pace of innovation and creativity we’re seeing from companies in this area.
So you have to ‘communicate’ through actions not words.
IKEA is doing this through their Actions speak louder manifesto. Their People and Planet Positive programme launched last year and is a great benchmark for businesses looking to address the full value chain and accelerate their transition to a circular business model.
Renault is another great example. They are one of the most progressive automotive brands on the planet. They’ve built in circular design principles and practices to their core production processes, to the extent that wholly recycled parts now make up almost 40% of every car made in Europe.
P&G’s PureCycle is another. They created the technology to clean recovered plastics / high density polypropylene and rid them of odour and other contaminants to reproduce virgin-like polymers to use in the remanufacture process. That’s a closed loop system that is driving down massive amounts of waste and increasing margins and tackling a huge material issue in their value chain. They couldn’t find the technology so they partnered to make it.
Adidas is another example of how sustainability has become a byword for innovation with the new future craft loop shoe which is made from a single fabric / material. And they’ve adopted an open-source approach to their latest Mid-Sole 3D Printing process so that more people and companies can develop the capability and drive scale across the industry.
Link your actions to a clear narrative – so that your commitments have a clear red thread to the brand or organisation’s purpose. If it is integrated into your brand communication and experiences it will become a differentiator and driver of additional value.
See Method, Patagonia and IBM as other great examples of this. Sustainability is embedded and baked into their core product, messaging and communications. It’s core to their very being and never something added on as an afterthought.
Q. If you could wish for one thing within your company, Germany or the world to occur in sustainability a year from now, what would it be?
JH – That every brief we receive has sustainability commitments embedded and that we don’t have to remind client teams to go back and think again. That would present a world that really gets that sustainability is a fundamental driver of consumer value, trust and differentiation.
Joe Hale is CEO of Dragon Rouge London. Dragon Rouge are a global brand strategy, design and communications agency with a keen interest and deep experience in sustainability and circular design thinking.
We help clients communicate their sustainability strategy, goals and achievements through branded content, products and services. We’ve worked with leaders in heavy industry, retail, professional services as well as some of the world’s largest consumer packaged goods groups. We also spend a lot of time talking to consumers about their feelings towards sustainability and circular services and product systems.
We’re a knowledge partner to the Ellen MacArthur Foundation, the principal body behind the transition to a circular economy and have led a number of strategic initiatives with them and their member network. Most recently in the global fashion industry.