Today, there's a strong business case for sustainability. Market trends show that especially young consumers are becoming more environmentally and socially conscious. Businesses that prioritize sustainability will likely have a competitive edge in the future and stay relevant in the long term. Sustainability is not just an ethical choice — it’s a smart business strategy.
While "green" products are rapidly rising in popularity, it's crucial for brands to move beyond greenwashing. While the rise in purpose-driven marketing is promising, it needs to go beyond catchy slogans and reflect a company's commitment to real change.
Tom Stein
Why sustainability and climate should be baked-into every business, every brand, every marketing campaign
This is not a drill: When an emergency is declared, there isn't much need (or time) for ‘nice-to-haves’. You grab only what you need. You take decisive action. You try to fix the problem. For much of my career working with different brands in different categories, my suspicion is that for many companies, ‘sustainability’ has always been one of those ‘nice-to-haves’, sometimes an ‘ought-to-have’ - taken seriously, for sure, but it was never driving the agenda.
Well, that’s changed. And how. A climate emergency has been officially declared in 1,849 jurisdictions covering 820 million people around the world in 33 countries.
The cumulative impact of business is the single largest force to drive real change. Brands have enormous leverage through their supply chains, their NPD programs and their influence on consumer behavior and culture. They have the ability and the energy to reshape the economy faster than governments can through legislation. The leadership, entrepreneurship and innovation that is at the heart of any business places them in a unique position to create lasting societal change quickly and effectively.
Climate change - and our response to it - is redefining us. Redefining how we do business, how we engage with consumers, how we take responsibility for changing the consumption culture, and ultimately whether we will be in business at all in the future.
So, what ought to be the response from brands and businesses? If sustainability, resilience, net-zero and decarbonization have not been elevated to the Boardroom, are not now driving the business, investment and communications strategies, they should be. And there are four very good reasons why:
- Sustainability is a means of managing risk.
And there are lots of risks. The risk of significant supply-chain disruption. Companies already adapting to a zero-carbon future have been shown to be much more resilient: better prepared for new regulatory frameworks; better positioned to manage short-term economic shocks; better insulated from spikes in fossil fuel prices; they have a more diversified supply-chain with equally well-prepared suppliers. The risk of divestment - investment moving out of high-carbon businesses and sectors. Companies with a clear climate action strategy are seeing the benefit of investor prioritization. The risk from the ‘conscious consumer’ adopting climate-informed purchasing decisions in favor of those businesses who can point to the action they are taking. The risk of non-compliance. There is significant risk to unprepared businesses from climate mitigation policies set by Governments & Cities - such as new regulations, punitive tax levies for non-acting corporates, and tightening restrictions on environmentally unfriendly corporate behavior. And finally, the risk to your talent base. Pressure to act is increasingly coming from within organizations. Motivated employees want to work for sustainable businesses. Without a clear and compelling sustainability strategy, companies find it hard to attract and retain the best talent. - Sustainability is a competitive advantage.
“Every purchase is a vote on what kind of future you want”. For any brand, this must be a serious wake-up call: the so-called ‘conscious consumer’ voting at the point of purchase, making decisions between brands based on their reputation for sustainability and climate action. The data differs by market, but the two demographics most likely to engage in this kind of climate-conscious brand selection are the ‘gray market’ 55yrs+ (the ones with all the money), and GenZ (the ones who will soon be in charge). Your competitors are already committed to climate action & evolving fast. The risk of not acting will see them gain significant competitive advantage and market share at your expense.
- Sustainability is a growth opportunity.
The transition to a zero-carbon economy is well underway - the pace of change is accelerating faster than anyone predicted. Across every sector and system, fundamental change is evident: in product development & supply chains; in consumer demand for sustainable products & services; in the roll-out of low-carbon technologies at scale; in investment flowing away from high-carbon businesses; in culture, creating an expectation amongst consumers for environmental transparency. This is reshaping whole sectors, creating new markets, new jobs - rapid change is opening up significant commercial opportunities for those businesses that are ready to seize them. Brands who are not already moving risk being left behind. (Kodak, anyone?) - Sustainability is a human (and therefore corporate) responsibility.
Policy and legislation alone cannot bend the climate curve. We will not decarbonize the economy fast enough without the full engagement of business, brands and their customers. This is a responsibility that transcends profit & loss.
Today, almost 90% of world economies are covered by Net Zero targets.1 According to South Pole’s 2022 Net Zero survey with sustainability leaders in business, more Net Zero targets are being set than ever before, with an increasing number of science-based emission reduction targets to back them up. Sustainability is good for business: 43% of surveyed companies believe Net Zero is a chance to lead and define the climate action space through positioning their brand, and 32% see Net Zero as a way to keep up with competitors’ climate targets, while 23% see Net Zero as a way to manage reputational risk.2
The bigger picture, however, is stark: of 68,000 companies around the world, only 7% have set a Net Zero target, compared to 87% of climate-aware companies (67% of sustainability leaders have a Net Zero target as well as science-based targets).3 However, nearly a quarter of organizations are not publicizing data on their progress2— a practice termed Greenhushing (see Greenwashing) — and this lack of transparency could impact companies’ long-term growth.
Jean Marc Papin
The Future of Business is Sustainable
Transformation of any industry is driven almost exclusively by financial incentives, and sustainability is no different. For decades, companies have argued that investing in sustainable development does not yield the return on investment necessary — especially considering the significant capital expenditure often required to initiate and sustain programs, products, or services that meet sustainability benchmarks.
However, this is quickly becoming an outdated mode of thinking — in fact, the opposite is proving to be true. Investment in sustainability across almost all industries has been shown to increase financial performance in myriad ways, having been built on the foundation of several important trends: the growing demand from consumers for responsible growth in the brands they support, the increasing expectation of companies to adhere to corporate social responsibility guidelines, and the rise of Environmental, Social, and Governance (ESG) considerations.
Globally, consumers have become increasingly conscious of the environmental and social impacts of their purchasing decisions and have slowly come to the realization that the power of those decisions can in fact drive company values. According to a 2021 survey of 27,000 consumers across 12 countries by information management company Open Text, most consumers — an average of 81% across Japan, India, North America, and Europe — are willing to pay a premium for products and services which are ethically sourced and produced.4 This growing demand presents an opportunity for companies to capture market share and drive revenue growth. The rise in consumer demand for sustainable products and services can also open new revenue streams for companies to expand into previously untapped audience segments.
Beyond the consumer market, sustainability has gained significant traction in B2B relationships. A company’s Corporate Social Responsibility (CSR) practices — and their associated annual reports — have become a critical factor in many organizations’ choice of suppliers and partners — again, driven ultimately by consumer demand at the end of the value chain.
According to Harvard Business School, 90% of companies on the S&P 500 index published a corporate social responsibility report in 2019, which includes reporting on sustainable development initiatives. By aligning with environmentally responsible and socially conscious organizations, companies experience a “halo effect” — enhancing their own credibility and reputation by association with a recognized sustainable partner — attracting new B2B customers and ultimately increased revenue through new client acquisition and expanded market reach.
Sustainable practices can drive direct revenue growth for many companies — research shows that sustainable products and services have outperformed overall company revenues.5 Perhaps most notably, companies investing in more sustainable practices see a rise in efficiencies and a subsequent reduction in cost — making the case for prioritizing sustainability across the board.
Research by the NYU Center for Sustainable Business highlights steady growth in the market for sustainability-marketed products, which now hold a 17.3% share — up 3.6% since 2015. These products have outpaced non-sustainable counterparts, growing twice as fast and contributing one-third of all Consumer Packaged Goods growth. The study also shows that sustainable products feature a 28% price premium on average compared to traditionally marketed counterparts. There's an increasing number of new products with sustainable benefits, with a larger market share online. Upper income, millennials, college-educated, and urban consumers are more likely to buy sustainable products, and availability has been found to strongly correlate with market share.6
Anna McShane
Brands Need to Walk the Walk
It’s important to walk the walk before talking the talk. Companies need to put in the work to address their environmental impacts before communicating publicly. Third party assurance is a useful tool that allows companies to confidently communicate their climate action. By getting your data checked and verified by a third party expert in accordance with international standards, such as PAS 2050 or ISO 14067, companies – and their consumers – can be reassured that the numbers have gone through a robust audit.
The Carbon Trust provides independent verification and assurance services. With over 20 years of carbon expertise, we help companies move beyond a simple verification or methodology approval and seek to evaluate the credibility of the data and how it should be interpreted to inform future decision making. Our expert sustainability communications team can advise you on the strongest message and approach to external communication, such as through our leading product carbon footprint label or Route to Net Zero Standard.
Globally, 64%of people think businesses are doing mediocre or worse at keeping their climate commitments, and only 41% trust CEOs to tell the truth on climate change and actions that should be taken. However, 76% say renewable energy is among the most trusted industry sectors to do what is right in addressing climate change. These findings indicate that the public has a good understanding of which sectors are prioritizing climate change, and which are failing to address it adequately. A promising 66% of people think companies should stop advertising products or encouraging activities that are bad for the environment.7
A survey conducted by Viant8 shows that:
- More than 50% of consumers are likely to purchase from companies committed to sustainability.
- 69% of consumers think that businesses have a responsibility to reduce their environmental impact.
- 65% of consumers think it’s important that brands should act on sustainability, rather than just talk about it
- 67% view brands more positively if they use renewable energy
- Gen Z and Millennials feel most strongly that businesses have a responsibility to reduce their environmental impact
Sustainable Brand Index, Europe's largest independent brand study focused on sustainability, demonstrates that consumers across the European continent continue to prioritize sustainability, despite economic challenges and global crises like the COVID-19 pandemic, the war in Ukraine, and an escalating energy crisis. The study interviewed 80,000 consumers and examined 1,600 brands across 36 industries, and found that understanding of sustainability has expanded to include concepts such as democracy, safe communities, and mental health.9
"It’s an all hands on deck moment. Whether it’s a dedicated group or not, everyone should be pushing the boundaries on what’s possible at the intersection of sustainability and relevance. There are things to know to play effectively, creatively and without backlash. It’s a complex, fast-moving space. Ideas will need more deep knowledge and expert backing. So it could mean creating a dedicated group or hiring sustainability experts, sustainability leadership, or partnering with the broader sustainability community. The closer the relationships, the better. I believe we’re entering an age of unparalleled cross-pollination. It’s out of necessity and urgency but also because it will lead to amazing stuff."
<div class="blockquote-attribution">KAREN LAND SHORT, GLOBAL EXECUTIVE CREATIVE DIRECTOR OF ACCENTURE SONG</div>
However, there is also a growing disconnect between companies' sustainability claims and consumers' understanding and trust of those claims. Many consumers express skepticism about greenwashing and vague sustainability promises — demanding more transparency and authenticity. The 2023 data indicates a consistent or growing interest in sustainability discussions among consumers in Sweden, Norway, Denmark, Finland, and The Netherlands, despite some variation between countries.9
Sustainable Brand Index identified four different behavioral groups based on how consumers relate to sustainability, how they act in different situations, as well as underlying structures in attitudes:
- EGO: predominantly male, highly values personal and local concerns and holds traditional views. Previously disinterested in sustainability, this group now shows signs of embracing it — especially when sustainability messages align with their priorities like cost and health — but they prefer these messages to be subtly integrated rather than overt.
- MODERATE: Majority of the population, generally appreciates the status quo and follows trends rather than initiating them. Moderately interested in sustainability, they prioritize quality, function, and price of products, and are more likely to adopt sustainable practices when it's trendy, normative, or attracts positive social attention
- SMART: actively engage with sustainability, want to marry personal benefits with environmental ones, but don't prioritize sustainability above all else. They seek information actively and view choosing sustainable brands as part of their lifestyle, making everyday choices that balance their needs and the planet's wellbeing.
- DEDICATED: typically younger and urban, the most knowledgeable and interested in sustainability, consciously incorporates it into every consumption decision. They hold high expectations for companies' sustainability efforts and aren't hesitant to voice their opinions. They often undertake thorough research and are skeptical of information coming directly from companies themselves.
The International Chamber of Commerce, a leading global trade body, sets forth a number of guidelines for responsible environmental marketing communications in the advertising industry (ICC 2021), including:
- Environmental claims must have a sound scientific basis
- Avoid exaggerating the environmental benefits of a product (for example, claiming that a product now has “twice as much recycled content as before” when the amount was very low to begin with, or claiming that a product “does not contain” a certain chemical when it never contained it in the first place).
- Avoid claims that imply that an improvement is more significant than it is (for example, claiming that a product was made with 30% less carbon emissions when carbon emissions only make up a small fraction of the product’s total greenhouse gas emissions)
- Avoid general claims such as “environmentally friendly”, “green”, “ecologically safe”, “climate smart” or “sustainable” (implying that a product has no impact) without a high standard of proof
- Consider that consumers may also expect broader social responsibility (e.g. fair working conditions) of marketers making sustainability claims
- Be wary of calling a product “recyclable” if recycling may not be widely available
- Avoid vague claims about decarbonization goals, for example ones that only concern direct operations, but not emissions from products’ lifecycles (‘scope 3 emissions’). Where decarbonization goals are set, marketers should provide proof that meaningful steps are taken towards that goal
According to the Sustainable Brand Perception Index, which surveys over 100,000 respondents across 36 countries, sustainability plays a role in consumer decisions in some industries more so than others. But the overall trend is clear: Sustainability plays a big role in influencing brand perception and consumer choice.10
Sustainability was segmented into Environment, Social, and Governance (ESG) components to distinguish between different areas of consumer decision making. Findings indicate that the Luxury Auto sector stood out, with sustainability accounting for a 22.9% impact on brand value. Despite their association with high fuel consumption, luxury auto brands highly benefit from a sustainability reputation. Following closely, sectors like soft drinks (13.7%), supermarkets (12.6%), media (10.1%), and cosmetics (10%) also show significant sustainability-driven influences. While the Household Products and Media sectors both had 10% sustainability driver scores, their underpinning factors varied significantly — with the environment playing a bigger role for household products, and supporting communities and wider society being a driving factor for media consumer decisions.10
Jillian Gibbs
Why Brands Should Prioritize Sustainability
Across APR’s 75 Fortune 500 marketing clients, we are seeing Sustainability climbing high on strategic agendas under the ESG banner – in many cases progressing from the morally driven ‘right thing to do’ bucket into a business imperative. This shift in focus is being driven by the dire need to address climate change, but also by consumer purchase behaviors. There is an abundance of stats demonstrating a consumer shift to buy from companies who care about sustainability, which is a compelling argument for most organizations.
As a result, there is a continuing rise in organizations setting Net Zero targets. However, for organizations to meet those targets, scope 1, 2 and 3 emissions all need to be measured, reported, and validated. As production consultants, it is our role to ensure clients are aware of their responsibility for scope 3 emissions — which includes marketing and production — and to help them take a considered approach to tackling initiatives that influence creative production.
The key to any carbon reduction strategy is data, and as one of the founding members of the AdGreen Project — responsible for launching a Carbon Calculator specifically for advertising production — APR is delighted that the industry now has the ability to track and measure the carbon footprint of productions and drive essential behavior change. We believe that those who have embraced the calculator early will find themselves in a favorable position as they approach their target completion date, being able to obtain the data they need to satisfy Net Zero reporting requirements. The aggregated data from the AdGreen calculator indicates that Travel & Transport continue to be, by far, the largest contributor to the carbon footprint of a production (upwards of 64%)— which further supports our belief that fundamental behavioral change is required across our industry. Before we hop on an airplane to fly to a shoot, we need to stop and consider alternatives. Before we award a job to a Director or Photographer, we need to understand the carbon footprint of that bid.
We recognize the pivotal role advertising and production industries have to play, and wholeheartedly agree with New Zero World’s view that as a connected collaborative, we have the capability to drive unprecedented industrial and societal change.
Yet, there is still a lot of work to be done. As ‘Production Optimists®’ we see this new reality presenting huge opportunities for our work with our clients, such as introducing and maintaining sustainable production practices, tracking data to improve behaviors, setting measurable targets, and enabling Marketing and Production to contribute to ESG Targets by introducing structured, data-driven programs.
While there may be an organizational desire to implement sustainable practices, in reality, most brand teams are at the beginning of their journey. Often lacking the capacity or knowledge on how to get started, brands are turning to experts like us to help them navigate this complex area. From a production perspective, we have five simple measures to understand how to get started:
- Eliminate carbon during creative development: Shooting a scene on a snowy mountain slope halfway across the world could be re-imagined without sacrificing the quality of creative work. Alternative production approaches, such as Virtual Production, can have a big impact on reducing carbon emissions. Virtual shoot attendance, as we learned during Covid, is also an option.
- Energy Choices: Choose 100% renewable energy when feasible for both carbon reduction and cost-effectiveness. Using electric or hybrid transport and no-idle policies can make a major difference.
- Engage Partners: Carbon reduction requires evaluating the production chain and clear client-led expectations. Without clarity from brands, progress with creative partners lags.
- Recycle diligently: Productions create a huge amount of waste from catering to materials - much of which can be re-homed instead of heading to landfill. Think about donating food, and reusing or repurposing set pieces, using recycled materials is also a great way to create a re-use circle.
- Offset emissions cautiously: Only after all efforts to be carbon-neutral have been made should offsetting be considered; it’s a temporary solution for Net Zero targets. Offsetting can be cost-effective, and trusted partners are available through industry associations.
For companies to set successful targets, they need to not only ramp up science-based strategies in all operations, but also support collective resilience by also focusing efforts on biodiversity, as well as incentivizing investments in future climate innovation.2 Many companies’ business models are already redundant, and a shift towards prioritizing ESG will be crucial. While many businesses haven’t picked up on this just yet, advertising agencies certainly have.
Adam Lake
Transparency is Key
Climate Group was founded in 2004, on the firm belief that you can’t tackle climate change without meaningfully engaging the private sector in what needs to be done. Since, the central role of communications in accelerating the drive to Net Zero across business and government has evolved at pace. Our vision was to work with businesses and subnational governments to find solutions using an atmosphere of positive, constructive competitiveness to continually raise the bar. We then translate these solutions into easy-to-understand public narratives, which can transform how climate issues are communicated by corporations and governments.
Climate Week NYC started as a platform for businesses and governments to share climate progress, and has blossomed into the world's largest annual climate event. This expansion has reflected a shift in corporate engagement, from 'business to business' to a 'business to consumer' approach. In the past, climate conversations were confined to company communications and small sustainability teams. Now, we're seeing a broader company-wide and public involvement in these important discussions.
As the myth of sustainability being a cost to business was dispelled and opportunities for efficiency, risk mitigations and profitability began to take hold, a much broader range of business leaders started to take more interest in the role climate action can play in their long-term business strategy. This was twinned with a major shift in public awareness of climate change, boosted significantly by a series of high-profile youth led campaigns.
Over the last ten years, some of the largest corporations on the planet have come to realize that not only is ESG essential for operating a business effectively, it’s also vital to keep the support of the public. This created its own problems too. As businesses and the public both acknowledged that climate change is real, and we must act, the concept of greenwashing started to take root. The initial focus on long term commitments and statements of support made it harder to decipher between what was genuine action, and what was public relations.
Transparency and accountability became key defenses against this threat, but another major development was the increased scrutiny and awareness from campaign groups and the public around what constitutes genuine change. This was further supported by initiatives which companies can join and which require evidenced action and public accountability, such as The Climate Pledge, B-Team and Climate Group’s RE100 renewable energy and EV100 electric vehicle commitments.
The public scrutiny and increased availability of respected initiatives ensured that the private sector was under increased pressure to tie their climate communications to very real, specific actions, investments and decisions. A company’s climate strategy can no longer be something signed off just by a communications team, it must be integrated with the whole organization’s operations and financial teams, executive team and board.
The old saying ‘sunlight is the best disinfectant’ holds true in the climate space. Whilst greenwashing is a threat that can harm progress, the idea that companies must be seen to be green is a sign that we are making progress. But to ensure corporate climate messaging is fully aligned with actual action it’s vital that the climate sector, policy makers and experts closely work together to ensure that a companies’ transition to Net Zero is a clear, transparent and worthwhile process.
The role of communications in transforming how the private sector operates, on a global level, is significant. Done correctly, strong climate communications tied to action can genuinely change the world. Done badly, they can create a distraction and false sense of security that delay the transition. But as the public, campaigners and the climate sector continually improves its knowledge and understanding of what needs to get done, this will only improve our ability to stay on the right path and make strong corporate climate communications a powerful tool that creates a tangible positive impact.
The State of Marketing report of 2020 showed that empathetic marketing opens unprecedented opportunities, thanks to greater data and therefore personalization. There is great business value in trusted customer relationships, highlighting the need for marketing to transform rapidly to be fit for the future. Some marketers are already leading the way, with KPIs shifting away from measures such as revenue and sales effectiveness, and towards digital engagement rates and social analytics. Customer satisfaction is seen more and more as a measure of success.11
Driven by a series of crises which have changed people’s day-to-day lives, together with the popularization of AI, there is a growing appetite for customers to actively participate in shaping the future of their favorite brands. This can look like having more control over the attention economy: people have grown increasingly wary of algorithms, fearing whether their decisions are truly theirs and even seeking out alternative social media platforms.12
Sophie Lambin
Taking Climate Action to the Organizational Level
Companies are moving from a ‘business as usual’ mindset to a ‘climate emergency’ mindset. But to succeed, corporations must transform their business models in line with decarbonization and climate targets, and that means giving employees the understanding, skills, and influence to execute on it.
At Kite Insights, we witness companies transitioning from 'business as usual' to 'climate action', a complex business transformation. Often, there's a misconception that it's a solely top-down process, stemming from a 'command and control' model. However, Stanford's Robert Burgelman underscores the importance of recognizing an organization as a collection of proactive, creative individuals. He emphasizes that success relies not just on top-down strategy, but also on fostering bottom-up initiative and experimentation among employees to support that direction.13
This is particularly important when it comes to an organization’s climate action. The number of ways in which an organization affects the climate is complex. Every individual in every part of the company can affect its footprint. Not only that, every individual in every part of the company can suggest new ways of working within their domain. But this is only possible if they have the skills and are empowered to use them.
There is good news here: employees are crying out for the knowledge and tools to do just this, and there is considerable risk for businesses that don’t deliver. In our survey of 7,134 employees across 15 industries and 10 countries, 15% said that they had considered changing jobs in order to work more closely on climate-related issues within the last 12 months. That rose to 20% amongst the most climate savvy employees. Moreover, 8 out of 10 employees are ready and willing to take action on climate change in their jobs. Seventy percent said they were ‘very’ or ‘quite interested’ in training related to climate action at work. And 70% said that acting on climate change at work was important to their personal sense of motivation and wellbeing.14
Climate action can mean helping employees understand how to talk to suppliers about evolving requirements, standards, and metrics. It might include incentivizing lower levels of management to suggest climate-positive innovations. And it might include empowering them to suggest ways their part of the company can support nature-based solutions. This is good for business too: Companies can build a lasting competitive edge by equipping their employees with the knowledge and skills to take effective climate action. By enabling their employees to act on climate they can build greater brand loyalty and respect, attract and retain the best talent, and make themselves more resilient in the face of an evolving regulatory landscape.
Companies that move fast and grasp this opportunity will not just be the most effective actors for the climate, they will future-proof themselves in the face of the climate-conscious market conditions of the second half of this decade. The message I have taken away from my work in recent years is that climate upskilling is an underrated win-win for businesses and the climate. I expect this to be recognized increasingly in the coming years.
To be effective, corporate climate strategy needs to be genuinely strategic – that means engaging, empowering, and inspiring employees to act on the biggest challenge of our age.
To keep up with these societal trends, brands should show their value through meaningful products and services. Many consumers are shifting towards a “community first, product later” mindset, seeking out digital places where they can feel a greater sense of belonging, rather than be bombarded with carefully curated posts. Customers are likely to be willing to pay a premium for innovative and compelling experiences. Brands can harness this trend by introducing exclusive access to online spaces connecting with their customer’s passions and interests, whilst introducing climate consciousness into people’s everyday life and, ultimately, promoting sustainable habits and consumer behavior.
CASE STUDY
Patagonia is tackling the climate crisis with activism
Outdoor clothing brand Patagonia was one of the first to use organic cotton, recycled materials and regenerative agriculture in producing its products. Patagonia’s strategy is based on the “5 R’s”: REDUCE short-term purchases, REPAIR damaged garments to avoid discarding them, REUSE what you already have, RECYCLE what is no longer needed, and REIMAGINE a sustainable world. Patagonia invests in overseeing its supply chain, with a particular focus on labor rights and environmental impact. The company has been taking climate action by funding documentaries, suing the federal government overprotection of a national monument and boycotting advertising on Facebook and Instagram due to Meta’s failure to combat climate denial on their platforms.
Some of the company’s best-known campaigns include its “Don’t Buy this Jacket” ad in the New York Times for Black Friday, released in 2011,15 criticizing rampant consumerism and low-quality products; and “Buy Less Demand More”, promoting a shift towards lower consumption limited to necessary purchases, and products that last a lifetime. The latter in particular uses implicit learning and memory to influence the attitudes of Patagonia’s audience towards the environment. Implicit learning occurs when a person unconsciously absorbs information without fully realizing it, leading to an inclination towards a brand or product. The campaign aims to create implicit learning to ensure that when purchasing Patagonia, people acquire more than a product — but also motivation for the conservation of the environment.16
Patagonia has recently restructured the way it controls the company, transferring 2% of shares and decision-making authority to a family trust, and the remaining 98% to a new non-profit focused on activism, the Holdfast Collective. Patagonia will soon have three activism segments: donating 1% of its revenue to grassroots environmental groups as part of One Percent for the Planet; the Holdfast Collective which will funnel larger grants and donations in the millions; and the Home Plant Fund, which will fundraise to distribute money to those fighting climate change in isolated and fragile regions, in particular Indigenous communities.17
The New Role of Advertising & Marketing
Over the past century, the advertising industry has evolved from showcasing products to building emotional connections and shared values. As competition between mediums grew — with TV, radio and billboards vying for consumer attention — advertising narratives shifted from the ‘what’ to the ‘why’, focusing on how products make consumers feel. Social media has accelerated this evolution, driving brands to engage in meaningful conversations with their audiences. Whether a consumer chooses a brand now rests on the expectations, memories, and relationships it fosters — ultimately, the social value it offers to consumers.
Keep reading
- Net Zero Tracker. Global Net Zero Coverage. Accessed May 23, 2023. https://zerotracker.net/
- Kähkönen N, Bourgeault E, Hagbrink I. Net Zero and Beyond: A Deep-Dive on Climate Leaders and What’s Driving Them - South Pole’s 2022 Net Zero Report. South Pole; 2022:1-37. https://www.southpole.com/publications/net-zero-and-beyond
- Ortis V. Net zero and beyond: between climate leaders and climate lagging companies. Carbonsink. Published November 3, 2022. Accessed September 17, 2023. https://carbonsink.it/en/net-zero-and-beyond-between-climate-leaders-and-climate-lagging-companies/
- Open Text. The Importance of an Ethical Supply Chain.; 2022. https://www.opentext.com/assets/documents/en-US/pdf/opentext-wp-the-importance-of-an-ethical-supply-chain-en.pdf
- Stobierski T. 15 Eye-Opening Corporate Social Responsibility Statistics. Harvard Business Insights. Published June 15, 2021. Accessed August 21, 2023. https://online.hbs.edu/blog/post/corporate-social-responsibility-statistics
- Kronthal-Sacco R, Whelan T. Sustainable Market Share Index. Published online April 2023. https://www.stern.nyu.edu/sites/default/files/2023-04/FINAL%202022%20CSB%20Report%20for%20website.pdf
- Edelman. Edelman Trust Barometer Special Report 2022 - Trust and Climate Change.; 2022:58. https://www.edelman.com/sites/g/files/aatuss191/files/2022-11/2022%20Edelman%20Trust%20Barometer%20Special%20Report%20Trust%20and%20Climate%20Change%20FINAL_0.pdf
- Viant. Viant Sustainability Consumer Omnibus Survey. Published online May 2023. https://www2.viantinc.com/l/76852/2023-06-05/ck7r22/76852/16860006810qIu2ugo/Viant_Consumer_Omnibus_Survey_6.5.23.Final.pdf
- SB Insight. Sustainable Brand Index Official Report 2023 - Europe’s Largest Brand Study on Sustainability.; 2023:81. https://www.sb-index.com/rankings
- Brand Finance. Sustainability Perceptions Index 2023 - The inaugural report on the value of sustainability perceptions to the world’s leading brands. Published online January 2023. https://static.brandirectory.com/reports/brand-finance-sustainability-perceptions-index-2023-full-report.pdf
- Bourne J. Salesforce State of Marketing report promotes empathy, AI, and more focused KPIs. Marketing Tech News. Published May 22, 2020. Accessed May 23, 2023. https://www.marketingtechnews.net/news/2020/may/22/salesforce-state-of-marketing-report-promotes-empathy-ai-and-more-focused-kpis/
- Accenture. Accenture Life Trends 2023.; 2022. https://www.accenture.com/content/dam/accenture/final/capabilities/song/marketing-transformation/document/Accenture-Life-Trends-2023-Full-Report.pdf
- Vermeulen F. Many Strategies Fail Because They’re Not Actually Strategies. Harvard Business Review. Published November 2017. Accessed August 1, 2023. https://hbr.org/2017/11/many-strategies-fail-because-theyre-not-actually-strategies?utm_medium=social&utm_campaign=hbr&utm_source=LinkedIn&tpcc=orgsocial_edit
- Kite Insights. Every job is a climate job - Why corporate transformation needs climate literacy. Published online June 2022. https://kiteinsights.com/wp-content/uploads/2022/06/Every-Job-Is-A-Climate-Job-Kite-Insights.pdf
- Patagonia. Don’t Buy This Jacket, Black Friday and the New York Times - Patagonia Stories. Patagonia. Published November 25, 2011. Accessed September 6, 2023. https://www.patagonia.com/stories/dont-buy-this-jacket-black-friday-and-the-new-york-times/story-18615.html
- Magossi A, Beltrán LA, Ramos LP, Moreno KVC. Inside Patagonia Brand Values and Communication. TDH Online Agency. Published February 1, 2021. Accessed May 23, 2023. https://thedigitalhacks.com/inside-patagonia-brand-values-and-communication
- Aratani L. ‘We’ve lost the right to be pessimistic’: Patagonia treads fine line tackling climate crisis as for-profit company. The Guardian. https://www.theguardian.com/business/2023/mar/12/patagonia-climate-crisis-for-profit-company. Published March 12, 2023. Accessed May 23, 2023.
Figure 111: Growth of sustainability-marketed products, when compared to conventionally-marketed ones. Source: NYU.
Figure 112: Growth of sustainability-marketed products, when compared to conventionally-marketed ones. Source: NYU.
Figure 113: Share of participants who discuss climate change sometimes or often with family and friends. Source: Sustainable Brand Index.
Figure 114: Four different behavioral groups based on how consumers relate to sustainability, how they act in different situations, as well as underlying structures in attitudes. Source: Sustainable Brand Index.
Figure 115: Role of Sustainability in Driving Consideration, by sector. Source: Brand Finance.
Source: Patagonia
Today, there's a strong business case for sustainability. Market trends show that especially young consumers are becoming more environmentally and socially conscious. Businesses that prioritize sustainability will likely have a competitive edge in the future and stay relevant in the long term. Sustainability is not just an ethical choice — it’s a smart business strategy.
While "green" products are rapidly rising in popularity, it's crucial for brands to move beyond greenwashing. While the rise in purpose-driven marketing is promising, it needs to go beyond catchy slogans and reflect a company's commitment to real change.
Tom Stein
Why sustainability and climate should be baked-into every business, every brand, every marketing campaign
This is not a drill: When an emergency is declared, there isn't much need (or time) for ‘nice-to-haves’. You grab only what you need. You take decisive action. You try to fix the problem. For much of my career working with different brands in different categories, my suspicion is that for many companies, ‘sustainability’ has always been one of those ‘nice-to-haves’, sometimes an ‘ought-to-have’ - taken seriously, for sure, but it was never driving the agenda.
Well, that’s changed. And how. A climate emergency has been officially declared in 1,849 jurisdictions covering 820 million people around the world in 33 countries.
The cumulative impact of business is the single largest force to drive real change. Brands have enormous leverage through their supply chains, their NPD programs and their influence on consumer behavior and culture. They have the ability and the energy to reshape the economy faster than governments can through legislation. The leadership, entrepreneurship and innovation that is at the heart of any business places them in a unique position to create lasting societal change quickly and effectively.
Climate change - and our response to it - is redefining us. Redefining how we do business, how we engage with consumers, how we take responsibility for changing the consumption culture, and ultimately whether we will be in business at all in the future.
So, what ought to be the response from brands and businesses? If sustainability, resilience, net-zero and decarbonization have not been elevated to the Boardroom, are not now driving the business, investment and communications strategies, they should be. And there are four very good reasons why:
- Sustainability is a means of managing risk.
And there are lots of risks. The risk of significant supply-chain disruption. Companies already adapting to a zero-carbon future have been shown to be much more resilient: better prepared for new regulatory frameworks; better positioned to manage short-term economic shocks; better insulated from spikes in fossil fuel prices; they have a more diversified supply-chain with equally well-prepared suppliers. The risk of divestment - investment moving out of high-carbon businesses and sectors. Companies with a clear climate action strategy are seeing the benefit of investor prioritization. The risk from the ‘conscious consumer’ adopting climate-informed purchasing decisions in favor of those businesses who can point to the action they are taking. The risk of non-compliance. There is significant risk to unprepared businesses from climate mitigation policies set by Governments & Cities - such as new regulations, punitive tax levies for non-acting corporates, and tightening restrictions on environmentally unfriendly corporate behavior. And finally, the risk to your talent base. Pressure to act is increasingly coming from within organizations. Motivated employees want to work for sustainable businesses. Without a clear and compelling sustainability strategy, companies find it hard to attract and retain the best talent. - Sustainability is a competitive advantage.
“Every purchase is a vote on what kind of future you want”. For any brand, this must be a serious wake-up call: the so-called ‘conscious consumer’ voting at the point of purchase, making decisions between brands based on their reputation for sustainability and climate action. The data differs by market, but the two demographics most likely to engage in this kind of climate-conscious brand selection are the ‘gray market’ 55yrs+ (the ones with all the money), and GenZ (the ones who will soon be in charge). Your competitors are already committed to climate action & evolving fast. The risk of not acting will see them gain significant competitive advantage and market share at your expense.
- Sustainability is a growth opportunity.
The transition to a zero-carbon economy is well underway - the pace of change is accelerating faster than anyone predicted. Across every sector and system, fundamental change is evident: in product development & supply chains; in consumer demand for sustainable products & services; in the roll-out of low-carbon technologies at scale; in investment flowing away from high-carbon businesses; in culture, creating an expectation amongst consumers for environmental transparency. This is reshaping whole sectors, creating new markets, new jobs - rapid change is opening up significant commercial opportunities for those businesses that are ready to seize them. Brands who are not already moving risk being left behind. (Kodak, anyone?) - Sustainability is a human (and therefore corporate) responsibility.
Policy and legislation alone cannot bend the climate curve. We will not decarbonize the economy fast enough without the full engagement of business, brands and their customers. This is a responsibility that transcends profit & loss.
Today, almost 90% of world economies are covered by Net Zero targets.1 According to South Pole’s 2022 Net Zero survey with sustainability leaders in business, more Net Zero targets are being set than ever before, with an increasing number of science-based emission reduction targets to back them up. Sustainability is good for business: 43% of surveyed companies believe Net Zero is a chance to lead and define the climate action space through positioning their brand, and 32% see Net Zero as a way to keep up with competitors’ climate targets, while 23% see Net Zero as a way to manage reputational risk.2
The bigger picture, however, is stark: of 68,000 companies around the world, only 7% have set a Net Zero target, compared to 87% of climate-aware companies (67% of sustainability leaders have a Net Zero target as well as science-based targets).3 However, nearly a quarter of organizations are not publicizing data on their progress2— a practice termed Greenhushing (see Greenwashing) — and this lack of transparency could impact companies’ long-term growth.
Jean Marc Papin
The Future of Business is Sustainable
Transformation of any industry is driven almost exclusively by financial incentives, and sustainability is no different. For decades, companies have argued that investing in sustainable development does not yield the return on investment necessary — especially considering the significant capital expenditure often required to initiate and sustain programs, products, or services that meet sustainability benchmarks.
However, this is quickly becoming an outdated mode of thinking — in fact, the opposite is proving to be true. Investment in sustainability across almost all industries has been shown to increase financial performance in myriad ways, having been built on the foundation of several important trends: the growing demand from consumers for responsible growth in the brands they support, the increasing expectation of companies to adhere to corporate social responsibility guidelines, and the rise of Environmental, Social, and Governance (ESG) considerations.
Globally, consumers have become increasingly conscious of the environmental and social impacts of their purchasing decisions and have slowly come to the realization that the power of those decisions can in fact drive company values. According to a 2021 survey of 27,000 consumers across 12 countries by information management company Open Text, most consumers — an average of 81% across Japan, India, North America, and Europe — are willing to pay a premium for products and services which are ethically sourced and produced.4 This growing demand presents an opportunity for companies to capture market share and drive revenue growth. The rise in consumer demand for sustainable products and services can also open new revenue streams for companies to expand into previously untapped audience segments.
Beyond the consumer market, sustainability has gained significant traction in B2B relationships. A company’s Corporate Social Responsibility (CSR) practices — and their associated annual reports — have become a critical factor in many organizations’ choice of suppliers and partners — again, driven ultimately by consumer demand at the end of the value chain.
According to Harvard Business School, 90% of companies on the S&P 500 index published a corporate social responsibility report in 2019, which includes reporting on sustainable development initiatives. By aligning with environmentally responsible and socially conscious organizations, companies experience a “halo effect” — enhancing their own credibility and reputation by association with a recognized sustainable partner — attracting new B2B customers and ultimately increased revenue through new client acquisition and expanded market reach.
Sustainable practices can drive direct revenue growth for many companies — research shows that sustainable products and services have outperformed overall company revenues.5 Perhaps most notably, companies investing in more sustainable practices see a rise in efficiencies and a subsequent reduction in cost — making the case for prioritizing sustainability across the board.
Research by the NYU Center for Sustainable Business highlights steady growth in the market for sustainability-marketed products, which now hold a 17.3% share — up 3.6% since 2015. These products have outpaced non-sustainable counterparts, growing twice as fast and contributing one-third of all Consumer Packaged Goods growth. The study also shows that sustainable products feature a 28% price premium on average compared to traditionally marketed counterparts. There's an increasing number of new products with sustainable benefits, with a larger market share online. Upper income, millennials, college-educated, and urban consumers are more likely to buy sustainable products, and availability has been found to strongly correlate with market share.6
Anna McShane
Brands Need to Walk the Walk
It’s important to walk the walk before talking the talk. Companies need to put in the work to address their environmental impacts before communicating publicly. Third party assurance is a useful tool that allows companies to confidently communicate their climate action. By getting your data checked and verified by a third party expert in accordance with international standards, such as PAS 2050 or ISO 14067, companies – and their consumers – can be reassured that the numbers have gone through a robust audit.
The Carbon Trust provides independent verification and assurance services. With over 20 years of carbon expertise, we help companies move beyond a simple verification or methodology approval and seek to evaluate the credibility of the data and how it should be interpreted to inform future decision making. Our expert sustainability communications team can advise you on the strongest message and approach to external communication, such as through our leading product carbon footprint label or Route to Net Zero Standard.
Globally, 64%of people think businesses are doing mediocre or worse at keeping their climate commitments, and only 41% trust CEOs to tell the truth on climate change and actions that should be taken. However, 76% say renewable energy is among the most trusted industry sectors to do what is right in addressing climate change. These findings indicate that the public has a good understanding of which sectors are prioritizing climate change, and which are failing to address it adequately. A promising 66% of people think companies should stop advertising products or encouraging activities that are bad for the environment.7
A survey conducted by Viant8 shows that:
- More than 50% of consumers are likely to purchase from companies committed to sustainability.
- 69% of consumers think that businesses have a responsibility to reduce their environmental impact.
- 65% of consumers think it’s important that brands should act on sustainability, rather than just talk about it
- 67% view brands more positively if they use renewable energy
- Gen Z and Millennials feel most strongly that businesses have a responsibility to reduce their environmental impact
Sustainable Brand Index, Europe's largest independent brand study focused on sustainability, demonstrates that consumers across the European continent continue to prioritize sustainability, despite economic challenges and global crises like the COVID-19 pandemic, the war in Ukraine, and an escalating energy crisis. The study interviewed 80,000 consumers and examined 1,600 brands across 36 industries, and found that understanding of sustainability has expanded to include concepts such as democracy, safe communities, and mental health.9
"It’s an all hands on deck moment. Whether it’s a dedicated group or not, everyone should be pushing the boundaries on what’s possible at the intersection of sustainability and relevance. There are things to know to play effectively, creatively and without backlash. It’s a complex, fast-moving space. Ideas will need more deep knowledge and expert backing. So it could mean creating a dedicated group or hiring sustainability experts, sustainability leadership, or partnering with the broader sustainability community. The closer the relationships, the better. I believe we’re entering an age of unparalleled cross-pollination. It’s out of necessity and urgency but also because it will lead to amazing stuff."
<div class="blockquote-attribution">KAREN LAND SHORT, GLOBAL EXECUTIVE CREATIVE DIRECTOR OF ACCENTURE SONG</div>
However, there is also a growing disconnect between companies' sustainability claims and consumers' understanding and trust of those claims. Many consumers express skepticism about greenwashing and vague sustainability promises — demanding more transparency and authenticity. The 2023 data indicates a consistent or growing interest in sustainability discussions among consumers in Sweden, Norway, Denmark, Finland, and The Netherlands, despite some variation between countries.9
Sustainable Brand Index identified four different behavioral groups based on how consumers relate to sustainability, how they act in different situations, as well as underlying structures in attitudes:
- EGO: predominantly male, highly values personal and local concerns and holds traditional views. Previously disinterested in sustainability, this group now shows signs of embracing it — especially when sustainability messages align with their priorities like cost and health — but they prefer these messages to be subtly integrated rather than overt.
- MODERATE: Majority of the population, generally appreciates the status quo and follows trends rather than initiating them. Moderately interested in sustainability, they prioritize quality, function, and price of products, and are more likely to adopt sustainable practices when it's trendy, normative, or attracts positive social attention
- SMART: actively engage with sustainability, want to marry personal benefits with environmental ones, but don't prioritize sustainability above all else. They seek information actively and view choosing sustainable brands as part of their lifestyle, making everyday choices that balance their needs and the planet's wellbeing.
- DEDICATED: typically younger and urban, the most knowledgeable and interested in sustainability, consciously incorporates it into every consumption decision. They hold high expectations for companies' sustainability efforts and aren't hesitant to voice their opinions. They often undertake thorough research and are skeptical of information coming directly from companies themselves.
The International Chamber of Commerce, a leading global trade body, sets forth a number of guidelines for responsible environmental marketing communications in the advertising industry (ICC 2021), including:
- Environmental claims must have a sound scientific basis
- Avoid exaggerating the environmental benefits of a product (for example, claiming that a product now has “twice as much recycled content as before” when the amount was very low to begin with, or claiming that a product “does not contain” a certain chemical when it never contained it in the first place).
- Avoid claims that imply that an improvement is more significant than it is (for example, claiming that a product was made with 30% less carbon emissions when carbon emissions only make up a small fraction of the product’s total greenhouse gas emissions)
- Avoid general claims such as “environmentally friendly”, “green”, “ecologically safe”, “climate smart” or “sustainable” (implying that a product has no impact) without a high standard of proof
- Consider that consumers may also expect broader social responsibility (e.g. fair working conditions) of marketers making sustainability claims
- Be wary of calling a product “recyclable” if recycling may not be widely available
- Avoid vague claims about decarbonization goals, for example ones that only concern direct operations, but not emissions from products’ lifecycles (‘scope 3 emissions’). Where decarbonization goals are set, marketers should provide proof that meaningful steps are taken towards that goal
According to the Sustainable Brand Perception Index, which surveys over 100,000 respondents across 36 countries, sustainability plays a role in consumer decisions in some industries more so than others. But the overall trend is clear: Sustainability plays a big role in influencing brand perception and consumer choice.10
Sustainability was segmented into Environment, Social, and Governance (ESG) components to distinguish between different areas of consumer decision making. Findings indicate that the Luxury Auto sector stood out, with sustainability accounting for a 22.9% impact on brand value. Despite their association with high fuel consumption, luxury auto brands highly benefit from a sustainability reputation. Following closely, sectors like soft drinks (13.7%), supermarkets (12.6%), media (10.1%), and cosmetics (10%) also show significant sustainability-driven influences. While the Household Products and Media sectors both had 10% sustainability driver scores, their underpinning factors varied significantly — with the environment playing a bigger role for household products, and supporting communities and wider society being a driving factor for media consumer decisions.10
Jillian Gibbs
Why Brands Should Prioritize Sustainability
Across APR’s 75 Fortune 500 marketing clients, we are seeing Sustainability climbing high on strategic agendas under the ESG banner – in many cases progressing from the morally driven ‘right thing to do’ bucket into a business imperative. This shift in focus is being driven by the dire need to address climate change, but also by consumer purchase behaviors. There is an abundance of stats demonstrating a consumer shift to buy from companies who care about sustainability, which is a compelling argument for most organizations.
As a result, there is a continuing rise in organizations setting Net Zero targets. However, for organizations to meet those targets, scope 1, 2 and 3 emissions all need to be measured, reported, and validated. As production consultants, it is our role to ensure clients are aware of their responsibility for scope 3 emissions — which includes marketing and production — and to help them take a considered approach to tackling initiatives that influence creative production.
The key to any carbon reduction strategy is data, and as one of the founding members of the AdGreen Project — responsible for launching a Carbon Calculator specifically for advertising production — APR is delighted that the industry now has the ability to track and measure the carbon footprint of productions and drive essential behavior change. We believe that those who have embraced the calculator early will find themselves in a favorable position as they approach their target completion date, being able to obtain the data they need to satisfy Net Zero reporting requirements. The aggregated data from the AdGreen calculator indicates that Travel & Transport continue to be, by far, the largest contributor to the carbon footprint of a production (upwards of 64%)— which further supports our belief that fundamental behavioral change is required across our industry. Before we hop on an airplane to fly to a shoot, we need to stop and consider alternatives. Before we award a job to a Director or Photographer, we need to understand the carbon footprint of that bid.
We recognize the pivotal role advertising and production industries have to play, and wholeheartedly agree with New Zero World’s view that as a connected collaborative, we have the capability to drive unprecedented industrial and societal change.
Yet, there is still a lot of work to be done. As ‘Production Optimists®’ we see this new reality presenting huge opportunities for our work with our clients, such as introducing and maintaining sustainable production practices, tracking data to improve behaviors, setting measurable targets, and enabling Marketing and Production to contribute to ESG Targets by introducing structured, data-driven programs.
While there may be an organizational desire to implement sustainable practices, in reality, most brand teams are at the beginning of their journey. Often lacking the capacity or knowledge on how to get started, brands are turning to experts like us to help them navigate this complex area. From a production perspective, we have five simple measures to understand how to get started:
- Eliminate carbon during creative development: Shooting a scene on a snowy mountain slope halfway across the world could be re-imagined without sacrificing the quality of creative work. Alternative production approaches, such as Virtual Production, can have a big impact on reducing carbon emissions. Virtual shoot attendance, as we learned during Covid, is also an option.
- Energy Choices: Choose 100% renewable energy when feasible for both carbon reduction and cost-effectiveness. Using electric or hybrid transport and no-idle policies can make a major difference.
- Engage Partners: Carbon reduction requires evaluating the production chain and clear client-led expectations. Without clarity from brands, progress with creative partners lags.
- Recycle diligently: Productions create a huge amount of waste from catering to materials - much of which can be re-homed instead of heading to landfill. Think about donating food, and reusing or repurposing set pieces, using recycled materials is also a great way to create a re-use circle.
- Offset emissions cautiously: Only after all efforts to be carbon-neutral have been made should offsetting be considered; it’s a temporary solution for Net Zero targets. Offsetting can be cost-effective, and trusted partners are available through industry associations.
For companies to set successful targets, they need to not only ramp up science-based strategies in all operations, but also support collective resilience by also focusing efforts on biodiversity, as well as incentivizing investments in future climate innovation.2 Many companies’ business models are already redundant, and a shift towards prioritizing ESG will be crucial. While many businesses haven’t picked up on this just yet, advertising agencies certainly have.
Adam Lake
Transparency is Key
Climate Group was founded in 2004, on the firm belief that you can’t tackle climate change without meaningfully engaging the private sector in what needs to be done. Since, the central role of communications in accelerating the drive to Net Zero across business and government has evolved at pace. Our vision was to work with businesses and subnational governments to find solutions using an atmosphere of positive, constructive competitiveness to continually raise the bar. We then translate these solutions into easy-to-understand public narratives, which can transform how climate issues are communicated by corporations and governments.
Climate Week NYC started as a platform for businesses and governments to share climate progress, and has blossomed into the world's largest annual climate event. This expansion has reflected a shift in corporate engagement, from 'business to business' to a 'business to consumer' approach. In the past, climate conversations were confined to company communications and small sustainability teams. Now, we're seeing a broader company-wide and public involvement in these important discussions.
As the myth of sustainability being a cost to business was dispelled and opportunities for efficiency, risk mitigations and profitability began to take hold, a much broader range of business leaders started to take more interest in the role climate action can play in their long-term business strategy. This was twinned with a major shift in public awareness of climate change, boosted significantly by a series of high-profile youth led campaigns.
Over the last ten years, some of the largest corporations on the planet have come to realize that not only is ESG essential for operating a business effectively, it’s also vital to keep the support of the public. This created its own problems too. As businesses and the public both acknowledged that climate change is real, and we must act, the concept of greenwashing started to take root. The initial focus on long term commitments and statements of support made it harder to decipher between what was genuine action, and what was public relations.
Transparency and accountability became key defenses against this threat, but another major development was the increased scrutiny and awareness from campaign groups and the public around what constitutes genuine change. This was further supported by initiatives which companies can join and which require evidenced action and public accountability, such as The Climate Pledge, B-Team and Climate Group’s RE100 renewable energy and EV100 electric vehicle commitments.
The public scrutiny and increased availability of respected initiatives ensured that the private sector was under increased pressure to tie their climate communications to very real, specific actions, investments and decisions. A company’s climate strategy can no longer be something signed off just by a communications team, it must be integrated with the whole organization’s operations and financial teams, executive team and board.
The old saying ‘sunlight is the best disinfectant’ holds true in the climate space. Whilst greenwashing is a threat that can harm progress, the idea that companies must be seen to be green is a sign that we are making progress. But to ensure corporate climate messaging is fully aligned with actual action it’s vital that the climate sector, policy makers and experts closely work together to ensure that a companies’ transition to Net Zero is a clear, transparent and worthwhile process.
The role of communications in transforming how the private sector operates, on a global level, is significant. Done correctly, strong climate communications tied to action can genuinely change the world. Done badly, they can create a distraction and false sense of security that delay the transition. But as the public, campaigners and the climate sector continually improves its knowledge and understanding of what needs to get done, this will only improve our ability to stay on the right path and make strong corporate climate communications a powerful tool that creates a tangible positive impact.
The State of Marketing report of 2020 showed that empathetic marketing opens unprecedented opportunities, thanks to greater data and therefore personalization. There is great business value in trusted customer relationships, highlighting the need for marketing to transform rapidly to be fit for the future. Some marketers are already leading the way, with KPIs shifting away from measures such as revenue and sales effectiveness, and towards digital engagement rates and social analytics. Customer satisfaction is seen more and more as a measure of success.11
Driven by a series of crises which have changed people’s day-to-day lives, together with the popularization of AI, there is a growing appetite for customers to actively participate in shaping the future of their favorite brands. This can look like having more control over the attention economy: people have grown increasingly wary of algorithms, fearing whether their decisions are truly theirs and even seeking out alternative social media platforms.12
Sophie Lambin
Taking Climate Action to the Organizational Level
Companies are moving from a ‘business as usual’ mindset to a ‘climate emergency’ mindset. But to succeed, corporations must transform their business models in line with decarbonization and climate targets, and that means giving employees the understanding, skills, and influence to execute on it.
At Kite Insights, we witness companies transitioning from 'business as usual' to 'climate action', a complex business transformation. Often, there's a misconception that it's a solely top-down process, stemming from a 'command and control' model. However, Stanford's Robert Burgelman underscores the importance of recognizing an organization as a collection of proactive, creative individuals. He emphasizes that success relies not just on top-down strategy, but also on fostering bottom-up initiative and experimentation among employees to support that direction.13
This is particularly important when it comes to an organization’s climate action. The number of ways in which an organization affects the climate is complex. Every individual in every part of the company can affect its footprint. Not only that, every individual in every part of the company can suggest new ways of working within their domain. But this is only possible if they have the skills and are empowered to use them.
There is good news here: employees are crying out for the knowledge and tools to do just this, and there is considerable risk for businesses that don’t deliver. In our survey of 7,134 employees across 15 industries and 10 countries, 15% said that they had considered changing jobs in order to work more closely on climate-related issues within the last 12 months. That rose to 20% amongst the most climate savvy employees. Moreover, 8 out of 10 employees are ready and willing to take action on climate change in their jobs. Seventy percent said they were ‘very’ or ‘quite interested’ in training related to climate action at work. And 70% said that acting on climate change at work was important to their personal sense of motivation and wellbeing.14
Climate action can mean helping employees understand how to talk to suppliers about evolving requirements, standards, and metrics. It might include incentivizing lower levels of management to suggest climate-positive innovations. And it might include empowering them to suggest ways their part of the company can support nature-based solutions. This is good for business too: Companies can build a lasting competitive edge by equipping their employees with the knowledge and skills to take effective climate action. By enabling their employees to act on climate they can build greater brand loyalty and respect, attract and retain the best talent, and make themselves more resilient in the face of an evolving regulatory landscape.
Companies that move fast and grasp this opportunity will not just be the most effective actors for the climate, they will future-proof themselves in the face of the climate-conscious market conditions of the second half of this decade. The message I have taken away from my work in recent years is that climate upskilling is an underrated win-win for businesses and the climate. I expect this to be recognized increasingly in the coming years.
To be effective, corporate climate strategy needs to be genuinely strategic – that means engaging, empowering, and inspiring employees to act on the biggest challenge of our age.
To keep up with these societal trends, brands should show their value through meaningful products and services. Many consumers are shifting towards a “community first, product later” mindset, seeking out digital places where they can feel a greater sense of belonging, rather than be bombarded with carefully curated posts. Customers are likely to be willing to pay a premium for innovative and compelling experiences. Brands can harness this trend by introducing exclusive access to online spaces connecting with their customer’s passions and interests, whilst introducing climate consciousness into people’s everyday life and, ultimately, promoting sustainable habits and consumer behavior.
CASE STUDY
Patagonia is tackling the climate crisis with activism
Outdoor clothing brand Patagonia was one of the first to use organic cotton, recycled materials and regenerative agriculture in producing its products. Patagonia’s strategy is based on the “5 R’s”: REDUCE short-term purchases, REPAIR damaged garments to avoid discarding them, REUSE what you already have, RECYCLE what is no longer needed, and REIMAGINE a sustainable world. Patagonia invests in overseeing its supply chain, with a particular focus on labor rights and environmental impact. The company has been taking climate action by funding documentaries, suing the federal government overprotection of a national monument and boycotting advertising on Facebook and Instagram due to Meta’s failure to combat climate denial on their platforms.
Some of the company’s best-known campaigns include its “Don’t Buy this Jacket” ad in the New York Times for Black Friday, released in 2011,15 criticizing rampant consumerism and low-quality products; and “Buy Less Demand More”, promoting a shift towards lower consumption limited to necessary purchases, and products that last a lifetime. The latter in particular uses implicit learning and memory to influence the attitudes of Patagonia’s audience towards the environment. Implicit learning occurs when a person unconsciously absorbs information without fully realizing it, leading to an inclination towards a brand or product. The campaign aims to create implicit learning to ensure that when purchasing Patagonia, people acquire more than a product — but also motivation for the conservation of the environment.16
Patagonia has recently restructured the way it controls the company, transferring 2% of shares and decision-making authority to a family trust, and the remaining 98% to a new non-profit focused on activism, the Holdfast Collective. Patagonia will soon have three activism segments: donating 1% of its revenue to grassroots environmental groups as part of One Percent for the Planet; the Holdfast Collective which will funnel larger grants and donations in the millions; and the Home Plant Fund, which will fundraise to distribute money to those fighting climate change in isolated and fragile regions, in particular Indigenous communities.17
Figure 111: Growth of sustainability-marketed products, when compared to conventionally-marketed ones. Source: NYU.
Figure 112: Growth of sustainability-marketed products, when compared to conventionally-marketed ones. Source: NYU.
Figure 113: Share of participants who discuss climate change sometimes or often with family and friends. Source: Sustainable Brand Index.
Figure 114: Four different behavioral groups based on how consumers relate to sustainability, how they act in different situations, as well as underlying structures in attitudes. Source: Sustainable Brand Index.
Figure 115: Role of Sustainability in Driving Consideration, by sector. Source: Brand Finance.
Source: Patagonia
The New Role of Advertising & Marketing
Over the past century, the advertising industry has evolved from showcasing products to building emotional connections and shared values. As competition between mediums grew — with TV, radio and billboards vying for consumer attention — advertising narratives shifted from the ‘what’ to the ‘why’, focusing on how products make consumers feel. Social media has accelerated this evolution, driving brands to engage in meaningful conversations with their audiences. Whether a consumer chooses a brand now rests on the expectations, memories, and relationships it fosters — ultimately, the social value it offers to consumers.
Keep reading- Net Zero Tracker. Global Net Zero Coverage. Accessed May 23, 2023. https://zerotracker.net/
- Kähkönen N, Bourgeault E, Hagbrink I. Net Zero and Beyond: A Deep-Dive on Climate Leaders and What’s Driving Them - South Pole’s 2022 Net Zero Report. South Pole; 2022:1-37. https://www.southpole.com/publications/net-zero-and-beyond
- Ortis V. Net zero and beyond: between climate leaders and climate lagging companies. Carbonsink. Published November 3, 2022. Accessed September 17, 2023. https://carbonsink.it/en/net-zero-and-beyond-between-climate-leaders-and-climate-lagging-companies/
- Open Text. The Importance of an Ethical Supply Chain.; 2022. https://www.opentext.com/assets/documents/en-US/pdf/opentext-wp-the-importance-of-an-ethical-supply-chain-en.pdf
- Stobierski T. 15 Eye-Opening Corporate Social Responsibility Statistics. Harvard Business Insights. Published June 15, 2021. Accessed August 21, 2023. https://online.hbs.edu/blog/post/corporate-social-responsibility-statistics
- Kronthal-Sacco R, Whelan T. Sustainable Market Share Index. Published online April 2023. https://www.stern.nyu.edu/sites/default/files/2023-04/FINAL%202022%20CSB%20Report%20for%20website.pdf
- Edelman. Edelman Trust Barometer Special Report 2022 - Trust and Climate Change.; 2022:58. https://www.edelman.com/sites/g/files/aatuss191/files/2022-11/2022%20Edelman%20Trust%20Barometer%20Special%20Report%20Trust%20and%20Climate%20Change%20FINAL_0.pdf
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