We’ve all heard about the truth in Cinderella’s story. Contrary to the animated version, the Grimm brothers original version had the two stepsisters lose a toe and a heel to fit into the glass shoe. The blood-stained glass shoe didn’t fool the prince.
Today we are going to talk about how to make money out of being a sustainable company and become the Cinderella – the rightful owner of those glass pumps and the palace. It’s something that doesn’t really line up with the image of having sustainability discussions, especially when we talk about profit and not funding. How do we make money by running a sustainable business almost sounds like something too ugly to talk about.
The truth is, to be able to make changes to the fundamental way consumers consume goods in the future, companies that invest in sustainability efforts need to be profitable in the first place. If these companies are not financially sustainable, how can they make sure that the future generations can benefit from the efforts they have made towards sustainability and continue providing consumers with better choices? This was one of the reasons why we founded Myth, to unseal the unspoken subject of making small and medium sized businesses that do good, financially sustainable.
We will start with two topics where I believe companies are not taking full advantage of yet. We will discuss how to interpret the consumer and investor expectations of companies in the recent years, and the readiness of consumers when it comes to the hot topic of the circular economy, and what are the opportunities there.
I started with the metaphor of the glass shoe because today consumers do not just look at how pretty the shoe is on your feet, but what is inside it. There are companies that cut corners to greenwash, or make false claims taking advantage of the ambiguity in many definitions of sustainability. Sooner or later, consumers will see the missing toe and heel. By then, the jewels in the palace with breakfast in bed every day will be close to impossible.
Even if they made it there, how is one going to walk properly in the palace in shoes that don’t fit them anyway? The foundation of being a profitable sustainable business is to cease the right opportunities like Cinderella, to be able to try those shoes on in the first place.
“The good into the pot, the bad into the crop”
Cinderella, Brothers Grimm
There is an interesting article on Forbes published at the end of 2018 asking consumers across the UK and US whether they think that brands make it easier for them to be environmentally friendly and ethical in their daily life. Surprisingly enough, 43% of them believed that the brands made their life to being a greenie or an ethical person harder!
I’d love to argue that this is a very irresponsible response because there are so many sustainable and ethical choices out there, and it is the consumer’s responsibility to make the right choice. But the hard-cold reality is that humans are lazy, and we often opt for the most convenient option up for grabs. This means, pick the cheapest on the shelf, when in doubt go for a brand that everyone knows, buy everything from the same place without questioning about each item…you name it.
Funnily enough in the same year, Accenture published the results of their study on the consumers expectations on companies and 62% of their surveyed consumers in the US “support companies whose brand purpose aligns with their beliefs, and they reject those that don’t, with one in five walking away forever.”
Are our consumers bipolar or what? Well, you and I are consumers, too. Have you ever been guilty of the convenience? Because, come on, we have more important things to do than spending an hour comparing the most ecological and sustainably produced toothpaste for sure. (Excuses, excuses)
Fast forward two years, one of the quotes from the key outcomes of the EU Green Week 2020 rightfully summarizes that despite what consumers tell us through these surveys, there is still work to do, and there is a clear opportunity out there for us:
“People make decisions based on price, accessibility, well-being and trends – and don’t respond well to guilt, fear, or contributing to the greater good. We need evidence based, positive and global narratives about living in the world of tomorrow as well as actionable information on what we can do. Governments and businesses play a huge role to make sustainable living THE default option.”
Garette Clark, UNEP
Summarizing the various arguments, there is a clear expectation from consumers that give sustainable and socially responsible businesses a strong competitive advantage. The big “IF” is if we could be invited to go and try out the glass slipper in the first place, i.e. make it oh so easy for the consumer to consider the more responsible options.
In reality the prince ISN’T going to knock on every maiden’s door, that happens only in fairytales. We must evolve to become the choice of the consumer, by understanding the basic behavior.
How about the eventual investors? They want to invest in brands that have potential in creating competitive advantages in the market, but they need to be shown how this can be materialized.
So how are we going to live happily ever after? We’ll continue exploring this in the next posts.