“The global economy is not on track to meet the needs of a growing population within environmental and resource constraints”.
This insight was gleaned from a survey of 1,000 CEOs that participated in last year’s UN Global Compact-Accenture CEO on Sustainability report. Despite the growing awareness of our urgent environmental issues, it appears that business leaders believe the broader economy is dragging its feet in implementing more sustainable business practices to meet these challenges.
And it’s not just business leaders that feel this way.
In the follow up to the UN Global Compact CEO Study, a study of over 30,000 people across 20 countries concludes that business is still failing to embrace the necessary changes to put us on a more sustainable path. Accenture and Havas Media Group’s RE:PURPOSE have produced a report called “The Consumer Study: From Marketing to Mattering”, and the compelling finding is that “business is failing to take care of the planet and society”.
Should we be surprised?
Some of us may say this finding should be self-evident (and why waste money on a global survey to confirm the bleeding obvious) as it could be argued that businesses generally care little for our environmental and social issues when profit maximisation is the primary corporate motivation. You could argue this case well, although it neglects to acknowledge the emergence of businesses that do focus on solving our environmental and social issues: B Corporations, social enterprises, micro-finance lending companies, shared value business, and so forth.
What is interesting about the recent Accenture report is the level of dissatisfaction that consumers have with business, and the relative positioning across global regions. The study found that Western European consumers are particularly vocal in their frustration with the corporate sector – around 88% of those in Germany and 84% in France say that business is failing in its responsibilities to the planet and society. Compare those figures with respondents from Mexico (60%), Argentina (65%) and Japan (65%) where there is less criticism of the performance of business.
Clearly, today’s consumers have high expectations of business. But why is business failing us? The report suggests that “dissatisfaction may be regarded as the product of traditional approaches to communicating sustainability, centred on philanthropy and corporate social responsibility, with no clear integration into the products and services people consume, or the connection through their products that brands share with consumers”.
So if business is making some progress on sustainability, why is consumer dissatisfaction so high?
It seems that business doesn’t understand how to tell its “sustainability” story to a consumer market that has become more sceptical to marketing messages, PR spin, confusing environmental claims, and has less confidence and trust in the corporate sector.
Just as importantly, in markets where sustainability branding and communications are widely understood, it appears businesses are simply using the wrong tools to engage and connect with customers.
And the failure of traditional marketing approaches is no more apparent that in Western Europe and the US, with “fewer than 20% of respondents expressing their confidence in companies’ efforts to take care of the planet and society”.
In a nutshell, most people simply don’t believe the sustainability stories told by companies as having any meaningful impact in their lives. Many brands are failing to connect their sustainability efforts with the expectations of their customers.
The report concluded that people clearly hold companies as accountable as governments for improving the quality of their lives. Interestingly, in every region surveyed, “respondents’ expectations on business are almost identical to those of governments: globally, 86% expect governments to directly improve the quality of their life; 85% expect the same of the companies from which they buy”. In France, in particular, consumer sentiment is so low that they expect business to be more active in improving community well being and quality of life.
But here’s the kicker – the report found that a common complaint from business leaders as that while consumer may say that sustainability is important to them and they want to buy from eco-friendly, environmentally responsible businesses, this intent is not reflected in their actual purchase decisions.
And that’s the rub for business. For all the time, energy and resources they have dedicated to building a brand with sustainability at its heart, most consumers are simply not “buying it” (excuse the pun).
So what should business do? In my next post, I’ll take a closer look at the report’s recommendations and the likely path (or paths) that business should adopt.