Gen Z Expects Brand Action On Sustainability

The integration of sustainability into core business strategies and the ability to deliver value and values will attract conscious consumers and drive exceptional market disruption.

Sustainability is often as big a topic as DEI and next quarters’ profit projection in today’s boardroom. The topic permeates Wall Street — literally and figuratively — and with increased urgency since the smoke from Canadian fires created unhealthy air from Wall Street to the halls of Congress. I, personally, had trouble breathing when walking in New York City during this latest “once in a lifetime event.”

These major weather events are happening more often due to the lack of climate and carbon management. As the urgency to address environmental challenges grows, it becomes imperative for organizations to embrace sustainability and integrate it into their core business strategy.

Sustainability must be a profitable endeavor for public companies to make this part of their core business strategy. Otherwise this becomes a one-off cause marketing or charitable giving program, which will rarely be core to the business strategy.

Profitable behavior will be rewarded by savvy consumers. I created the Purpose Profit Loop to explain the need to embrace innovation practices to fuel next-generation sustainability models. This “Loop” shows that by embracing the United Nations Sustainable Development Goals (represented by the colorful center icon above), a brand leader can impact a companies’ internal culture.

Today’s savvy CEOs know that it is imperative to “win inside to win outside.”

Ultimately, innovation fuels sustainability and companies are rewarded by consumers who purchase their products. Some of these profits must go to shareholders and some must be re-invested to generate incremental gains against corporate sustainability goals. It's a classic fly wheel.

Gen Z Mindsets Are Driving Sustainability

In this era of increasing urgency around sustainability, one generation stands out for its pragmatic and future-focused mindset — Gen Z.

Gen Z shouldn’t be defined by birth years because there’s so much more that defines who they are. Birth year is a myopic way to think about generational characteristics, and I feel entitled to say this as the author of the first public study of Millennials as Consumers in collaboration with The Boston Consulting Group in 2010-2011. I followed this long-form research study with three subsequent research-based books on generational trends including Marketing to Gen Z.

Gen Z should be defined by values and behaviors. For example, a 52 year-old that uses technology to simplify their life, trades up and down on preferred brands by voting with their wallet, and seeks ways to act on their values has the Gen Z mindset.

The Gen Z mindset in business means brands deliver both value (price/quality/speed) and values (corporate action against sustainability, not corporate hype). Value plus values is how large brands bring scale to solving emerging consumer needs, and we know people with a Gen Z mindset vote with their wallets.

7 Brands Poised for Exceptional Sustainability Disruption:

First, the brands that already have scale will have a strategic advantage if they can move quickly. I know that’s counter to a popular David & Goliath hope. Goliath — when properly focused and well-funded — has a much better chance of winning today’s consumer.

WM

This “sleeping giant” is not sleeping at all. President and CEO Jim Fish understands the power of taking action, not just talking about goals. Fish has set up infrastructure to not only do this for WM at scale, but for brands looking for consulting and implementation road maps under the leadership of Chief Sustainability Officer Tara Hemmer.

WM has already executed their “recycle and reuse” strategy at the WM Phoenix Open and are working with a range of other professional sports leagues and teams, including the Florida Panthers and Pittsburgh Penguins as well as with venues like Climate Pledge Arena and Indianapolis Motor Speedway, to help them act on their environmental efforts.

“The work WM does more broadly with a wide range of companies through our Sustainability Services group and in professional sports really is just about understanding what customers’ needs and wants are and figuring out how to drive solutions in this ever-evolving space,” said Hemmer. “Sustainability is here to stay and making it part of your business strategy is going to be critically important for companies to survive and thrive in the future.”

Beazer Homes

This nimble brand is working to create an environmentally efficient home. And this isn’t the only way they showcase their values. They also have a big bet on supporting veterans and have for a long time. Beazer’s employees race to raise awareness and funds to support veterans through the Fisher House Foundation.

Keep your eye on them as they push their vendors to move faster in favor of a savvy consumer. “We are focused on innovation that helps homeowners reduce their environmental footprint and save on energy costs. It is our responsibility to find ways to keep consumer costs down while improving energy efficiency," CEO Allan Merrill said. "Making it more affordable for our buyers to own and operate their dream home is our number one priority.”

Royal Bank of Canada (RBC)

RBC is deeply committed to helping fight climate change. They recognize that addressing this challenge requires changes to how our economies are powered - how people live and get around - and believe that as a bank the greatest impact we can make in the transition to net-zero is by supporting our clients as they reduce their emissions while producing the energy we need today.

They are also helping bring cleantech and renewable energy solutions to market. “RBC Tech for Nature is our multi-year commitment to accelerate tech-based solutions that help preserve the world’s greatest wealth: our natural ecosystem. We work with partners to leverage technology and innovation capabilities to solve pressing environmental challenges. RBC Tech for Nature is a key element of how we are delivering on our climate strategy,” states the RBC Climate Blueprint.

Sabra

According to CEO Joey Bergstein, “Leaders pursuing business growth know not to limit their thinking and to look at every aspect of the business as a potential driver of growth. The same must be true when it comes to sustainability. As leaders, we need to look beyond the obvious, in fact, sometimes the ‘obvious’ is not even the most impactful. There is likely a planet-positive opportunity around every corner in every industry.”

People trust Sabra to put delicious plant-based snacks on the table. They also count on them to ensure that at every step, from chickpea pod to supermarket shelf, they seek ways to nourish people and the planet. They ask their team to find gaps everywhere, to seek sustainable solutions at each touchpoint, and lean on thoughtful organizations to ensure they can achieve important changes at scale.

Bergstein added, “There is a comradery when it comes to sustainability. There are no competitors in protecting the planet. We can only hope to inspire others and aim to be inspired by those doing more, demanding more and ensuring that we work collaboratively as an industry to care for the environment.”

7^th Generation

Unilever purchased this brand because it has tremendous growth potential and fits into their sustainable living portfolio. Their decision has been rewarded by consumers who are willing to pay a small price premium for a product that certainly isn’t focused on “outcleaning” the competition. Walk down the aisle of any Walmart and you’ll see the detergent brands aren’t boring and the modest price premium is real and acceptable.

As a large public company, Unilever has made a bet that affordable and sustainable living is an emerging need they can serve at scale. And that bet is paying off.

SAP

One of the most formidable challenges that companies have in delivering climate impact is in managing Scope 3 emissions to decarbonize the supply chain. At the root of the problem is gathering accurate primary data within operations and sharing it across the value chain of upstream and downstream partners and suppliers. To be effective, organizations need the same level of precision and control with their carbon emissions data as they have with their financial information.

SAP has introduced the vision of the “Green-Ledger,” which enables the use of implementing transactional carbon accounting by moving from average based emissions to actual emissions values that are connected to their financial systems. The green ledger aims to enable companies to sync emissions data with financial data, like estimates and invoices, so operational and supply chain leaders can make granular, accurate, and right-time decisions that are both financially and environmentally sound.

Walmart

This best-in-class retailer has absolutely made important strategic bets around environmental justice. They aren’t spending a lot of time talking about it yet, but their brand DNA is about “walking the walk” and look for them in a Harvard Business School case study in best practices for supply chain management and carbon improvement.

I reached out to Wal-Mart corporate communications and they responded “No comment.” And for that classic refusal to comment, I probably need to tip my hat and put them in the #1 spot of large brands that will lead the much-needed environmental improvements Gen Z mindset consumers are expecting.