Until not so long, sustainability was purely a marketing issue for companies. These times are over. Business models and innovations are increasingly geared to sustainability aspects.
Sustainably deceived – what does the VW scandal bring?
Until the emissions scandal, VW was considered a model company in terms of sustainability. The rating agency RobecoSam even declared the company the most environmentally friendly car manufacturer. All that has vanished into thin air – with consequences for other companies as well: The scandal has shown that corporate social responsibility (CSR) is often propagated to the outside world in a big way and that companies have their own CSR departments. But in reality, many CSR efforts are more or less PR. The VW scandal has also made companies in other industries aware that at some point, politicians will force companies to protect the environment with regulatory requirements. You can trick for a while, but at some point the trick is over. Seen in this light, the VW scandal has probably also contributed to companies rethinking the issue of sustainability and integrating it more strongly into their corporate strategy. In the areas of production, packaging and logistics, for example, sustainability aspects are increasingly being anchored in strategy and business processes.
Sustainability trend among end customers
Today’s customers are paying more attention to whether a company assumes social responsibility. Those who show a pioneering spirit with genuinely sustainable offerings are rewarded for their commitment. This is confirmed by a study by Facit, which measures the sustainability image of companies from the customer’s point of view and shows the influence of sustainability on corporate image, loyalty and overall satisfaction:
- 69 percent of consumers said that the aspect of sustainability influences their purchasing decisions.
- 59 percent of consumers are undecided and ambivalent about the issue. These are, for example, those consumers who buy organic products but cannot part with their SUV.
- 31 percent of consumers do not consider sustainability to be relevant to their purchasing decisions.
Sustainability becomes a competitive factor
The aforementioned study also underscores the high sales relevance of sustainability. The Sustainability Value Score (SVS) measures the concrete economic success of sustainability images and makes it clear that sustainability images already make a significant contribution to sales in numerous industries. According to this, sustainability accounts for up to 13 percent difference in sales. A study by Boston Consulting comes to a similar conclusion: Commitment to sustainability pays off if companies take a comprehensive approach. However, if they place a one-sided emphasis on social commitment or environmental standards in the supply chain, for example, the CSR strategy can even lead to a loss. The positive effect – especially in the case of corporations – usually only becomes measurable after a few years. Only then do CSR and sustainability strategies of companies lead to higher profit margins under otherwise identical market conditions. These are then up to 12.4 percentage points above the average.
Involvement in CSR networks opens doors to new markets for companies.
Investors have recognized the influence that sustainability has on profit development. The aspect of social responsibility is therefore also becoming increasingly important for investors. Top-performing companies achieve corporate valuations that are 3 to 19 percent higher than the average. Sustainability therefore pays off and can be operationalized in terms of a competitive advantage. If sustainability is used as a competitive factor, sustainable development as a whole also benefits.
Investors are increasingly investing in sustainable business models
For companies, taking sustainability into account is increasingly becoming an indispensable part of their strategic orientation. Today, it is no longer enough to pursue social responsibility as a side issue. However, the shift toward sustainability also holds enormous potential for companies, some of which has yet to be tapped. Companies should leverage their core business and the associated economies of scale to achieve both positive impacts on society and competitive advantages.
Are you ready for the future?
We would be happy to support you in implementing your social corporate responsibility strategy and take you on our interactive, agile journey. We know that big projects can be achieved with small steps. We would be happy to show you how you can introduce transformation and responsibility step by step.