Is sustainability compatible with profit?

Unilever is not the only company struggling to reconcile its commitment sustainability as part of its environmental, social and governance (ESG) strategy. As soon as its CEO Alan Jope said he would retire next year, the share price went up, although it continues to lag behind Nestle and P&G. Opaque communications on sustainability are part of the reason for this poor performance, as the company looks for purpose in brands that frankly don’t need one.

It’s a dilemma though for all brand manufacturers as they try to try to respond to customer calls for a whole range of sustainability related add-ons – sourcing, ingredients, environmental impact, supply chain costs, labelling, waste – while continuing to make a profit.

Is it possible to achieve a balance? Part of the problem is consumer research which says that consumers want all this, but then never takes any responsibility for the outcome – consumers will always say they want their brands to be sustainable but do they really care when it comes to actually putting these brands into their basket. Even research that says that consumers will pay a premium for sustainable products never follows up with evidence from the checkout.

Sustainability is personal

I suspect the truth is, for any number of products, that consumers don’t care. For instance, unless evidence emerges that the manufacture of Heinz tomato ketchup is bad for the environment, then I will keep buying it. I know nothing abut its production chain and don’t really care.

Consumers are a fickle lot, which is a polite way to say that many of them are rank hypocrites. If you cared about the environment, then you wouldn’t drink anything in a plastic bottle ever again, recycled or otherwise. And you certainly wouldn’t choose plastic bottled products that are in addition ruining your health.

However, we all make our own choices and make our own compromises, and these are so complex and nuanced that no consumer research can really help brands find the holy grail of balance between sustainability and profit. This is why so many brands have been caught out green washing – they are either not sustainable or they are only a bit sustainable, but never enough to satisfy even the most tolerant members of the woke brigade.

It’s a journey not a destination

And that’s a problem that will not go away. As you would expect, there is more than one sustainability index in every category, and the most credible have three major drawbacks – they are very hard to satisfy, expensive to join, and consume a huge amount of corporate time on compliance. And who ultimately is to say you are 100% sustainable, particularly if the product you sell is by its nature intrusive on the environment? How many products in the world could only achieve 100% sustainability simply by not existing? Let me stop now before this editorial raises the ghost of Marx and plots the downfall of capitalism.

Ultimately, sustainability is a journey and plenty of good companies are progressing with enthusiasm and honesty. Whether anyone can convince the loonies who are prepared to pour liquid shit and piss all mover the memorial to Captain Tom in protest at what they feel we are doing to the environment, remains to be seen. I suspect not. Meanwhile, profit will almost certainly continue to tip the scales.

Join Retail Connections

Register here

Related insights

One week to go! Eye on innovation – the Retail Technology Show announces new innovation showcases for 2024

The Retail Technology Show announces the shortlist for its 2024 Innovation Awards

Editorial

Retailers forced to take a lead on tech innovation as tech industry fails to lead the way

KUIU UNLOCKS GLOBAL DTC SUCCESS IN PARTNERSHIP WITH ESW

2 weeks to go! The Retail Technology Show announces a raft of new special events for 2024

East of England Co-op rolls out Pricer across its full store estate

Join Retail Connections

Get the latest industry views and exclusive member offers sent direct to your mailbox.