Why companies need to engage their brands

Brands and companies are waking up to a new inconvenient truth

Al Gore introduced us to the Inconvenient Truth half a decade ago, citing the impending challenges faced by the human race (and by most other species on the planet). Since then, there has been some progress.

Many companies and organizations have sought to create change. All but the short-sighted now understand their impacts better; most have made changes which reduce inputs and make more secure their sources of supply. McKinsey’s global survey of companies conducted in July 2011 shows that 73% of companies have sustainability as a top agenda item. The question of sustainability is now inside the boardroom.

“Broad levels of consumer concern and engagement with social and environmental issues remain the same as they were four years ago.”

However, whatever we judge to be the main motivations to date, this has largely benefited companies in terms of driving costs down and providing more robust evidence of their push toward better corporate citizenship.

But for mainstream companies, sustainability remains a disappointment: worthwhile thinking on products and services has not translated into increased sales. Change is so much easier for businesses if it comes from the marketplace and is represented by fundamental shifts in consumer values and needs. But broad levels of consumer concern and engagement with social and environmental issues remain the same as they were four years ago. If any movement is notable it is the downward shift in priority witnessed in the economies hit hardest by the global financial crises and their consumers’ greater focus on value. Despite this surface-level finding, it would be a mistake to conclude that sustainability matters less today. The subtleties beneath the surface present both opportunities and risks. There is no broad-brush solution which unlocks the potential for growth in the short term. But in the medium to long term, major changes in the wider business environment could rewrite the rules in some business sectors and categories— or even remove them from the landscape completely. Change is likely to come quickly and disruptively, and growth opportunities will emerge as sustainability becomes a more present issue in all our lives.

“The inconvenient truth today is that brands need to lead. The big question is how, and when, to do it in such a way that you gain the rewards of leadership.”

Positioning for these changes requires companies to act today to address areas that are likely to become consumer concerns, to build brands that are more resilient to the changes ahead. For those companies wishing to be in the vanguard there is a clear need to promote behavior change and establish new rules in the marketplace. Brands need to play a bigger role: they are the most powerful tools companies have. But there are risks here. On the one hand, not to use them disempowers a company’s capability to create change. On the other, using them means taking a risk with prized assets. The inconvenient truth today is that brands need to lead. The big questions are how and when, to do it in such a way that you gain the rewards of leadership.

Linking the broader corporate intent with the plans and direction of its brands is one of the biggest challenges for many companies. Short-term commercial focus continues to dominate category and brand decisions. But good brand practice today is about building for the future as well as the present. To endure, brands need agility. Those that are building equities on more sustainable principles now may just be the ones that thrive and dominate in the future.

For definition

Dictionaries provide more than 10 meanings for sustain, the main ones being to “maintain,” “support,” or “endure.” However, since the 1980s, sustainability has been used more in the sense of human sustainability on planet Earth. One of the most widely quoted definitions of sustainability and sustainable development is that of the Brundtland Commission of the United Nations on March 20, 1987: “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

For humans, sustainability has environmental, economicand social dimensions. It is multifaceted and complex and often subject to varying definitions and interpretations by different organizations.

From a consumer perspective, social and environmental issues are understood by consumers to varying levels, but sustainability is poorly understood as a singular term. As such, for the sake of measurability, many of The Futures Company’s tracking study questions focus on key dimensions rather than the broader definition itself.

This report explores where consumers are today on the journey toward sustainable living, the disruptive forces that will shape consumers’ lives and how brands can build for a more sustainable future.

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