Opinion

Consumers Are Driving the Trend Toward Sustainable Business

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Posted: Jun 21, 2019 9:00 PM
The opinions expressed by columnists are their own and do not represent the views of Townhall.com.
Consumers Are Driving the Trend Toward Sustainable Business

Source: Laurent Gillieron/dpa via AP

Technology continues to advance and fundamentally reshape the way that businesses and corporations interact with their consumers and vice versa. With just the click of a button, consumers all over the world can make their voices heard regarding a company’s products and practices. Those consumers are increasingly demanding more environmentally-friendly practices from the companies they choose to spend their money with. Not only is that demand creating a large return, but it is doing so in a way that is both voluntary and extraordinarily effective for the planet and for business. 

Consumers are becoming more aware of the impact their purchases have on the environment. A recent Nielsen study showed that 81% of consumers worldwide believe that companies ought to employ sustainable business practices, and 38% of people-- including 72% of millennials-- would pay more for sustainably-produced goods. This attitudinal shift has resulted in more companies than ever before embracing sustainable business practices. This impact reaches far beyond what any government mandate could ever achieve.

In a market-based economy, businesses and corporations ultimately answer to the consumer. Consumers are the source of profit, and companies keep close tabs on the attitudes and preferences of their consumers when making business and product decisions. In order to make money, they have to shift their business towards what consumers prefer. And as shopping preferences globally have shifted toward more eco-friendly business practices, those businesses are beginning to take notice. 

Major corporations are taking steps to reduce emissions, others are responding to demands for fewer single-use plastics by ditching the plastic straw, and more are increasingly bringing stakeholders into the conversation about new sustainability practices. These and so many other company-led initiatives have been sparked by market-driven forces, not government mandates. 

Nielsen recently conducted a study across three product categories that demonstrated the link between sustainability and sales.  While specific results varied, products that were marketed as more sustainable outperformed products without such labels every time. This report concludes

"No matter what, sustainability is no longer a niche play: your bottom-line and brand growth depend on it."

These steps toward sustainable business are long overdue, but perhaps what’s even more unique is their source. Each of the practices and initiatives listed above have been the result of consumer demand for change. Sustainability has been a goal of governments around the world for decades, yet efforts to legislate sustainability have consistently fallen short. Several studies show that this failure comes not from a lack of desire or logical ideas, but from a failure of implementation:

Conflict between the objectives of environmental policies and those focused on economic development, a lack of incentives to implement environmental policies, and a failure to communicate objectives to key stakeholders are all key factors that contribute to the inability to attain environmental sustainability.

Companies should not be forced to choose between economic and environmental success, a choice placed before them too often when they are presented with government solutions to environmental issues. Government mandates fail to provide positive incentives in all areas for change. Instead, companies should continue to create innovative solutions to those issues-- solutions that create positive results both environmentally and economically.

Every major environmental innovation in the recent past has come from businesses and corporations voluntarily finding ways to reduce their environmental impact. No one forced IKEA to go 100% renewable, no one forced Disney to transition to refillable amenities in their guest rooms, and no one forced Nike to include recycled materials in 75% of their shoes and apparel.  But these are three of countless examples of companies responding to a shift in consumers’ attitudes.

You can’t legislate an attitude change. It happens organically, and businesses will either respond or risk losing a customer base whose attitude has shifted. That risk is often enough to drive companies toward more sustainable practices. Once implemented, many companies find that those new practices expand their consumer base as well. Consumers vote with their wallets. And right now, many shoppers are putting their voting dollars towards eco-friendly businesses. Companies, in turn, are responding to that demand by providing innovative ways to tackle today’s environmental challenges.