“Real change will only happen with legislation”
As a company at the forefront of sustainability, we saw how Patagonia’s bold new eco-stance sets the bar for brands far and wide. Nonetheless, recent IBM research has shown that while 86% of organisations have a sustainability strategy in place, just over 1 in 3 (35%) have acted on that strategy. So, what really forces brands to act? Is it the need to follow suit? Consumer expectations? A legitimate concern for the environment? Or simply government legislation? In this blog, we will consider these questions and what it says about the brands in question.
Like Patagonia, some brands have sustainability at their core and some are eager to hop on the sustainable bandwagon early. A plethora of early-mover advantages exists for brands choosing to act already, from investment and reduced operational costs (e.g., lower energy bills, fewer travel costs, reduced waste) to growing a loyal consumer base. One such brand to hop on board is Coca-Cola. In recent years, the company has made significant strides in achieving its environmental goals, ensuring that its bottles include 24% less plastic while reducing gas emissions by transforming their production line. In a similar vein, our client, Mars, is redesigning its operations to eliminate deforestation from the supply chain by 2025 while switching to 100% renewable electricity. Impressively, since 2015, Mars has cut emissions in its full value chain by 7.3% despite the business continuing to grow.
Outside of FMCG, brands like PwC have now made ESG reporting and sustainability strategies a core part of their offering. Interestingly, what Coca-Cola, Mars, and PwC all have in common are attempts to embody their overall vision and support their brand purpose. The vision of Coca-Cola is “to bring a difference in people’s lives, the planet, and [our] communities”, Mars’ is “to drive the principles of quality, responsibility, mutuality, efficiency, and freedom”, while PwC’s is “building trust in society and problem solving”. These brands, therefore, benefit reputationally from such changes to practices and offerings, building trust amongst stakeholders. So, what happens when these core values are not vital to a company’s reputation?
Fast fashion brands such as Shein and Pretty Little Thing, both notoriously unsustainable, have received heat over the years for their micro-plastic-polluting garments and unsustainable supply chains. Nonetheless, sustainability has never been a factor in these brands’ core (or lack of) values and continues to be de-prioritised (or seemingly forgotten). This is especially concerning given the cost-of-living crisis, with many driven to prioritise cheap items from reputationally unsustainable brands over brands with green credentials.
It may therefore only be legislation that forces some brands to act. The European Commission’s proposal for Ecodesign for Sustainable Products Regulation establishes requirements for products to significantly improve their circularity, energy performance, and other key environmental aspects (environmental footprint, proportion of recycled content, durability, reusability). In the UK, the Competition and Markets Authority (CMA) may also get the power to enforce legislation from the Green Claims Code checklist, in a bid to tackle greenwashing. If granted, the CMA could impose a penalty of up to 10% of global annual turnover on brands that breach greenwashing laws.
These government-enforced pieces of legislation will likely be the only means to force the hand of every major player, from sustainable leaders to the infamously unsustainable, to follow a common set of environmental parameters. What we’ve found interesting in consulting is that whatever journey brings brands to sustainability they end up with a stronger business… financially, logistically, to recruitment and their sales story. Regulation forces change… regulation just might be the mother of invention that we need right now.