As our world faces growing environmental challenges, the importance of sustainability has never been clearer. Extreme weather events, wildfires, and record-breaking temperatures have dominated headlines, emphasising the urgent need for action.
As people become more aware of their personal impact on the environment, sustainability has risen to the top of the corporate agenda. It's not solely a matter of doing good for society; it's also a strategic business decision that affects engagement, profitability, and reputation.
In this blog, we will provide a summary of a new report from Merkle B2B; ‘Being a Force for Good is Just Good Business: How Sustainability Can Lead to Profitability’. This new report builds on findings from Merkle B2B’s 2023 Superpowers Index survey, focusing on the significance of sustainability in the B2B sector.
To read the brand-new sustainability report in full, head to the Merkle website here.
The Time to Act is Now
The good news is that businesses don't have to choose between profitability and environmental responsibility. Today, consumers, employees, investors, and even regulators are all pushing for sustainability. In dentsu’s ‘The Rise of Sustainable Media’ study in 2022, 91% of consumers expressed the desire for brands to make positive choices for the environment, and 87% were willing to change their buying habits to combat climate change. This shift towards sustainability also matters to employees, with 47% of Gen Z and millennials rejecting job offers that conflict with their personal ethics.
Investors are increasingly prioritising Environmental, Social, and Governance (ESG) factors, with 85% of fund-management companies stating that ESG is a high priority. Governments and regulators are also putting pressure on businesses to report on their ESG performance, making it a global priority.
Doing Good is Good for Business
The Merkle B2B Superpowers Index is a global survey that identifies the key factors driving competitive advantage in the B2B industry. This invaluable resource serves as a guide for B2B marketers striving to deliver exceptional experiences and adapt to the ever-increasing expectations.
In their 2023 Superpowers Index, Merkle B2B explored the realm of sustainability within the B2B sector. This research involved extensive interviews with 3,622 recent B2B buyers, providing insights derived from their 6,767 buying experiences across sectors such as Financial Services, Manufacturing, Professional Services, and Technology brands in major global markets.
One key finding from the Superpowers Index revealed that “doing good is good for business.” Brands that prioritise experiences which talk to social responsibility expectations enjoy numerous benefits, including shorter sales cycles, increased customer spending, and higher Net Promoter Scores. Sustainability-related factors have become essential in B2B purchasing decisions, including taking care of suppliers, aligning with buyers' values, reducing environmental impact, being known as a good employer, and fostering a culture of diversity and inclusion.
Understanding Sustainability Segments
The new sustainability report categorises businesses into five sustainability segments:
- True Believers (7%): These organisations prioritise sustainability based on their values and corporate vision.
- Opportunity Hunters (25%): They view sustainability as a market opportunity while seeking efficiency enhancements.
- Efficiency Seekers (26%): These businesses focus on sustainability to enhance operational efficiency.
- Stakeholder Driven (27%): Their actions are prompted by consumer and supply chain pressure.
- The Minimum (15%): They view sustainability as an inconvenience and do the minimum required by law.
A Sustainable Differentiator
Despite the clear benefits of sustainability, Merkle B2B’s Superpowers Index found that only 52% of businesses consider sustainability a significant focus. This presents a missed opportunity for those who fail to embrace sustainability fully, especially as relative to other businesses, UK organisations in the ‘True Believers’ segment are 65% more likely to have seen increased revenue and 36% more likely to have seen increased profit in the past 12 months.
The report also highlights the importance of top management's commitment to environmental sustainability, as true change often starts at the highest leadership levels.
Environmental goal setting varies across businesses, with larger enterprises more likely to have formal carbon reduction targets. However, an alarming finding is that only a small percentage of companies include scope 3 greenhouse gas emissions in their targets, even though these emissions form a significant part of the total. This gap underscores the need for more companies to address their overall emissions.
The Purpose of Purpose is Purpose
While some companies genuinely embrace sustainability as a core value, others may seek to capitalise on the trend without committing fully. However, recent class-action lawsuits against companies making false sustainability claims emphasise the need for authenticity and transparency in sustainability efforts. Scrutiny of sustainability claims can lead to greater accountability and positive change.
We All Have a Role to Play
The urgency of addressing environmental challenges and climate change calls for a commitment to reducing environmental impact across the board. Businesses need to integrate sustainability into their strategies and embrace a greener, more sustainable future. Whilst commitment to this greener future has a positive impact on B2B organisations, it’s also about doing what's right and resonating with individuals and businesses alike.
The B2B sector has a significant role to play in building a sustainable future. Embracing sustainability isn't just a moral duty; it's a path to success, driven by consumer demand, employee satisfaction, investor interest, and regulatory requirements.
Read the full report here
With increased shareholder, societal, and legislative pressures, businesses need data and insights to move through the disruption while maintaining stakeholder engagement. Get in touch to learn more about our comprehensive suite of sustainability products across Creative, Media, Digital, and CXM.