The sustainability movement is likely to reshape the entire global economy, fundamentally changing how products are made, transported, stored and financed, according to Forrester. Along the way, companies face an “unprecedented business opportunity,” per the researcher.
Like the first and second industrial revolutions, the changes that come out of the sustainability movement will take time to manifest and businesses may have to reinvent themselves several times as priorities change and new technologies emerge. Now is the time to lay the marketing groundwork for this opportunity, according to Forrester. Though 76% of CMOs said green initiatives are among their top five priorities for 2022, according to the researcher’s Q2 B2C Marketing CMO Pulse Survey, many aren’t sure where to start.
“Companies will have opportunities to develop new products and services directly in each of the green market categories, facilitate or enable a new green market, or build off the innovation,” according to the report. “Products that target environmental sustainability use cases such as clean energy, smart appliances and alternative proteins get the most attention, but there will be opportunities for every company, and a new competitor or disruptor is just around the corner.”
Graduating to sustainability
If Benjamin Braddock, the protagonist in “The Graduate,” were entering the professional world today, he would not be pulled aside at a party to be told the future is “plastics,” as he is in the classic film. Instead, he would likely hear the opposite, that the great future of business today is green.
That’s because, due to a number of factors — including government spending, tighter regulations, and venture capital interest in building greener companies — a new set of priorities are emerging.
“A combination of macro forces will create a tipping point, after which companies will no longer view sustainability as primarily an ethical responsibility with added benefits to brand and modest cost savings, but as financial and regulatory obligations they can’t ignore,” according to Forrester’s “Green Market Revolution” report.
Already, more than half of U.S. online adults are concerned about the impact of climate change on society and nearly as many (49%) consider themselves to be environmentally friendly, according to Forrester’s 2022 Consumer Benchmark Survey. However, fewer than one-third regularly purchase products sourced from sustainable materials, one of several challenges marketers face in embracing environmentally friendly practices.
One reason for the reluctance to purchase might be that consumers have become wary of greenwashing. Only 28% of U.S. online consumers trust companies will follow through on their promises to adopt practices that will slow climate change, while 45% agreed that “brands tend to mislead consumers when communicating their environmental initiatives.” Such hesitation may be why companies have shied away from communicating their realistic and practical green initiatives.
However, Forrester’s research indicates environmental sustainability is likely to become more important for consumers. According to Forrester’s benchmark survey, 37% of U.S. online adults say concerns about climate change affect their purchase decisions. However, the percentage grows among younger consumers; 50% of those under 35 said they prefer to buy environmentally sustainable products, and 47% said they are willing to pay more for environmentally friendly ones.
The research suggests that for companies, investing now in green initiatives is important because they will take time to take hold.
Still, consumer reluctance isn’t the only challenge marketers face. There is also a lack of alignment around green initiatives within the C-suite. Only 24% of North American CEOs see climate change as a major risk, according to the researcher. Couple that with the gap between consumers’ intentions and practices when it comes to sustainability, and it becomes clear why environmental initiatives are not yet a top business priority.
For marketers to make a difference, they should be thinking about changes that can happen within organizations to begin laying the foundation to build consumer trust over the long term. Among the opportunities are: making environmental sustainability a core operating principle by educating C-suite peers about its importance, working with other departments to define new metrics (product durability, carbon valuation equivalence) and to create new business models (subscription, rental, pay-per-use) that prioritize sustainability, partnering with like-minded stakeholders throughout the company to unleash creativity and communicating new positive climate solutions to help consumers live more sustainable lives.
While it can be frustrating when companies make tangible changes and the impact on consumer behavior is limited, Forrester’s research makes the case that there is little doubt that successful businesses of the future will be those who walk the talk when it comes to environmentally friendly practices.
“The key [to the messaging] is to avoid moral judgment and instead focus on creatively promoting new sustainable offerings by translating complex scientific jargon into meaningful language for consumers — without simply and lazily leveraging the ‘because the planet’ argument,” Forrester advises.