More and more companies continue to focus on having a positive social and environmental impact. The sustainability-oriented entities play a critical role in rejuvenating and stabilizing our surroundings. For your brand to be dubbed sustainable, you need a successful integration of economic, social, and environmental issues into your operations. But, converting these goals to reality is not easy. Most brands that consider themselves to be in this category only meet a third of the definition. So, what prompts businesses to decide on brand sustainability? What are the advantages and disadvantages of this move?
Why more brands are going green
The term ‘sustainability’ is among the latest buzz words common on websites, management journals, and corporate documents. It is undeniably a new method of conducting business and has become an integral component of many companies’ philosophy. Similar to company management practices, sustainability initiatives also influence brand value alongside several direct benefits. This explains why the market size of responsible, sustainable, and impact investing grew from $8.72 trillion in 2016 to $12.0 trillion in 2018.
Leading brands usually translate to their customers whatever is relevant to the world of today to influence their buying behavior. Also, they establish a strong connection with the clients due to their distinct offerings, and this leads to repeated purchasing. In general, your brand creates value through generating demand, reducing risks, and ensuring consistent future earnings. Therefore, implementing a sustainability strategy that is consistent with your brand’s positioning could create more value for your brands and company in general.
Another reason why brands move to environmentally friendly policies is to create demand for their products or services. This is mostly because both environmental and social concerns would change customer behavior
The pros and cons of going green
Here are the benefits and setbacks of adopting an environmentally friendly approach in your business:
- Green is hot! – Almost every company wants to be considered green. Therefore, if your brand is superior to other non-green alternatives, you may flourish in most situations.
- Solid business opportunities— If your products or services lie under the energy, green tech or cleantech sectors, then you are at the best place. This also applies if you address the everyday challenges of the society through competitive goods or services,
- Marketability factor— Media around the world is still hot for environmentally friendly brands, and you can identify unique ways of milking this marketing opportunity. Remember to maintain authenticity, or you risk being busted for claiming to be greener than you actually are.
- A competitive edge— Provided you offer as good or slightly better products than the non-green alternatives, your business will always be in good shape. While you may not be able to compete on price, you can implement solid strategies that position your brand to be desirable.
- More stability – Entities that also pay attention to integrating the environmental and social components display better performance than the non-green counterparts.
- It is hard to keep up – Green business is a long term trend, and staying up to date with new strategies and technologies while also pushing through the tight competition may not be easy.
- The business model is complex – Focusing on one bottom line – profits – is hard enough. What if you try three? Fulfilling your profit goals and leaving the right impact on the planet and people may not be as easy, and calls for dedication.
- You will keep playing by the same rules – The strategy requires you to compete using the traditional components of quality, functionality, fashion, or price. This may change, but not anytime soon.
Choosing between whether or not to go green is a crucial decision that leaves many entrepreneurs stuck. But with this information above, you can ascertain whether the strategy can work for your organization or not.