In this guest post, Sefiani Communications Group’s sustainability practice lead Julia Hoy (lead image) says that ignoring sustainability issues now will only increase cost pressures long term…
Life in Australia is set to get even more expensive. Energy prices are set to soar more than 50 percent in the coming years and cost of living pressures continue to mount with weather events impacting the availability of basic goods. Times will remain tough for many. While consumer sentiment for favouring sustainable brands, products and services has gained momentum in recent years, the question remains whether this will continue as cost-of-living pressures bite.
Sustainability is not a ‘nice to have’. Granted it drives consumer preference but importantly, when done well it has a tangible positive impact through the whole value chain – from people to plant, animals to water. In recent years we have seen brands adopt premium price strategies to cover the costs of sustainable business processes while other brands have absorbed those costs as the price of doing business sustainably.
In challenging economic times, both approaches present ongoing challenges for organisations: lose consumers who can no longer afford to pay to be sustainable or absorb the cost and impact the bottom line. In this tension is a third challenge – the long-term cost on both consumers and businesses if we let sustainability fall by the wayside.
Economically, brands that are genuinely more sustainable will stay one step ahead of their competitors. When the current economic turbulence passes, 45 per cent of Australians say sustainability will be an essential purchasing decision for them three years from now.
For consumers looking to tighten the belt but still make sustainable choices it’s a matter of changing shopping behaviours: buy less, but choose more sustainable options or repair and recycle existing goods. EY’s Future Consumer Index found that rather than switching to cheaper (and possibly unsustainable) brands, one-quarter of respondents intended to decrease the number of items they purchase to help the environment, with 69 per cent preferring to repair their belongings than replace them.
Clearly and accurately communicating sustainability claims is key to helping consumers make truly sustainable choices. In addition to recent ASIC and ACCC crackdowns on greenwashing claims, consumers are savvier than ever when distinguishing brands that are greenwashing from those with a genuine commitment to sustainability. As we have seen from recent cases in the media, such as H&M and Adidas, there is no space for greenwashing or oversimplification of brand claims: reputational and financial consequences will quickly follow.
As in all moments of enormous progress and rapid change, storytelling will be crucial to the shift to a greener, more equitable world. Transparent and authentic communication – where words consistently align with actions – is vital to establishing brand trust. Two-thirds expect brands to be transparent about the environmental impact of providing their products and services. The role of effective communication in the success of sustainability activity cannot be overstated.
Economic pressure is going to stay with us all for the short term. It is going to make business operations more challenging and everyday life harder. But the world is starting to change. Australians now expect more from the brands they support. Brands can either choose to stay the course and help shape a cleaner, greener, and more equitable future or put their sustainability initiatives on hold for the turmoil to pass. The clincher is that the cost of waiting will be far greater than what they expect.
