As discussed in the first two parts of this series on the importance of purpose in a post-COVID environment, purpose-driven organisations are best prepared to cope with the massive shifts facing the retail industry – including rising demand for companies to act on their environmental responsibility and consumers’ increasing climate consciousness.
Deloitte’s Retail Trends 2020 report found a rise in activism among consumers, largely driven by millennials and Gen Z who demand value-alignment with the businesses they support. Larry Fink, Chairman and CEO of BlackRock, also attests to increasing public expectations of companies: “Every company must not only deliver financial performance, but also show how it makes a positive contribution to society.”
A company that is purpose-driven will consider stakeholders beyond shareholders and, as such, a commitment to environmental responsibility must be embedded in a company’s purpose. This is not purely altruistic, the 2020 Deloitte retail industry study shows that retailers who fail to prioritise sustainability are now “at risk of not surviving the next 5-10 years”.
An organisation that focuses on sustainability will consider its carbon footprint and find ways to reduce it. It will examine ways to minimise waste and introduce products that are better for the environment. It will have a thorough understanding of its supply chain and look for alternative ways to source and deliver its products, or be founded on principles of circularity. In the realm of impact driven marketing campaigns, such an organisation will seize the opportunity to take a bold and brave stand and address environmental responsibility with brand activism.
Ben & Jerry’s provides a good example of a company that is leveraging their platform to voice climate change concerns. Last month, the company released a limited-edition ‘Unfudge Our Future’ ice cream flavour in Australia. The product launch is the centrepiece of their call for the Australian Government to ‘make fossil fuels history’ and invest in smart climate action policies in the upcoming October Budget. Personalised pints of ice cream were delivered to Australian political leaders and a portion of proceeds will be donated to 350.org Australia, a not-for-profit aiming to end fossil fuel use.
Ben & Jerry’s has a long history of brand activism but traditionally sustainability and brand purpose weren't mainstream. This is changing as consumers now expect this purpose-driven care. A recent study found that 78% of consumers believe companies must positively impact society in addition to making a profit. A survey conducted by Accenture Digital also resulted in 52% of respondents citing ‘The brand stands for something bigger than just the products and services it sells, which aligns with my personal values’ as a point of attraction to buy from certain brands over others.
Successful businesses in 2020 and beyond will keep sustainability at the heart of their purpose. If organisations are unable to keep pace with market demand for businesses with lower carbon footprints, environmentally friendly products and a keen grasp of their supply chain, they will not be able to sustain profitability themselves.
This is part three of a five-part series on the importance of purpose in a post-COVID environment. Read part one on purpose as retail’s major industry disruption, part two on defining purpose. Part four will look at on aligning employees with your business’ purpose, and part five will outline the impact of purpose on profitability.