Insights and its role in supporting sustainability targets

In early 2012 I worked on my first sustainability-focused project. This involved helping a large bank understand how they could streamline their printed statements to lessen their paper footprint. Since that time, the world of sustainability has changed dramatically. Over the past several years the topic of sustainability has evolved, broadened and become more of a focus in some cases, a lightning rod in others. The terms have broadened to include eco-friendly, green, low-impact, carbon-neutral, net zero, real zero and others.

As companies consider how they will address sustainability-driven initiatives, there are a number of issues they need to keep in mind. This guidance is based on an extensive body of work in the area having supported product, engineering, marketing and sustainability focused professionals leading these initiatives for varied clients.  Getting involved early allows the insights function to drive strategy, as opposed to reacting to information gaps with patchwork research projects.

Driving Factors

Start with why companies are investing in and exploring sustainability.  In most cases, this is not an altruistic undertaking.  There are extensive outside pressures forcing the issue.  This includes but is not limited to:

Governmental – The EU continues to lead the way with its Corporate Sustainability Reporting Directive (GSRD). Beginning in 2025 GSRD will require large publicly-listed companies in Europe to disclose their greenhouse gas emissions.  California is not far behind in putting pressure on manufacturers and large businesses to minimize their footprint.  Because of California’s huge economic impact, businesses pay attention while other states follow.  Accommodating guidelines coming out of California becomes a cost of doing business.

Business – While the business press vilifies Blackrock CEO Larry Fink for pushing a low carbon transition agenda, as the largest asset management firm in the US, Blackrock’s outsized positions in many leading companies gives it a strong voice in the C-Suite.  As a result, some companies are documenting their environmental efforts.  Many large companies are now asking their vendors to submit information about their carbon footprint.  Some even require vendors to identify a path to becoming carbon neutral as a condition of partnership.  (MarketVision recently completed an audit of our processes and is
recognized as carbon neutral.)

Consumers – Our research shows that the general concern about all things environmental can vary greatly.  While over simplified, consumers tend to fit into one of three categories:

• Environmental advocates – Representing the second largest chuck of consumers, they are willing to spend their money – even in high dollar categories – to have an environmental impact. 
• Silent believers – The largest group of consumers who recognize the value of sustainability efforts, but are either skeptical about the value or are not yet willing to spend extra money on their own unless the dollar amount is irrelevant to them.
• Non-believers – A small core of consumers who seem disinterested in sustainability efforts. 

At some point, consumers will be one of the driving reasons companies increase their focus on sustainable practices.  It will happen at different times in different categories (i.e. EV vs. ICE vehicles, cleaning products, retail packaging, and building materials all are in different stages of acceptance).

Strategic not Reactive

In determining how a company will address its carbon footprint/sustainability, leadership needs to chart a course that focuses on what is achievable short term while developing long-term strategies to address more difficult challenges.  Waiting and hoping the issue won’t impact your business will only put a company on the defensive when the inevitable push from government, business partners or consumers/buyers comes.  Even worse, a competitor will figure out how to address your sustainability challenges, providing them with market differentiation causing your organization to play catch up.

Role of the Insights Profession

Sustainability research isn’t as clearly defined and narrowly focused as traditional marketing research.  An insights professional needs to become familiar with business processes that are often unfamiliar, including manufacturing, vendor relationships, supply chain and other core business functions.  Understanding how these and other functions are impacted or impact sustainability is critical to developing an informed strategy.  Referred to as life cycle assessment, this approach quantifies the environmental impact of a product from production to end-of-life disposal. This information along with insight from buyers/consumers and leadership help to create a story that the organization can rely on to guide strategic decisions.