How To Keep Your Sustainable Brand Alive in a Recession

There’s no denying it anymore: our planet is in a climate crisis. Reducing CO2 emissions is on everyone’s lips, as companies increasingly acknowledge their contributions through off-setting schemes and ESG initiatives. It’s a trend that’s here to stay – with 53% of high-net-worth investors saying ESG is essential in their investment decisions, while 54% of consumers try to purchase products or services from brands that take a stand on social or environmental issues.

But there’s a big problem looming on the horizon: a recession. The combination of weak GDP and rising unemployment rates means that many companies are no longer able to prioritise sustainability within and beyond their business. Research by KPMG suggests that financial constraints are causing 34% of surveyed chief executives to pause their ESG programme, while a further 50% say that such a move will likely be taking place within the next six months.

The same issue is faced by consumers – it’s a metaphorical fork in the road that forces us to ask: do I go for what’s right for the planet or do I go for what’s right for me (and my wallet)?

Problem 1: Sustainability is still more expensive

Consumer behaviour shows us that people want to live more sustainably. Between 2016 and 2021, the combined sales of sustainability-marketed consumer packaged goods grew at 2.5 times the rate of conventionally marketed products. That’s a big deal. The needle is shifting.

But as much as people would like to purchase more sustainably, it’s not always an option. The World Economic Forum describes this as an ‘intention-action gap’. When asked, consumers will claim that they are willing to pay more for sustainable products – but when it comes down to it, their purchasing decisions don’t necessarily back this up.

This can be linked to the ‘green cost premium’. At this point in time, many, if not most, low-carbon product alternatives still cost more than their carbon-intensive alternatives. Research by Kearney shows that sustainable products are an average of 75-85% more expensive, with markups varying widely depending on the category.

It won’t always be the case (In fact, this cost disadvantage is projected to decline as green technologies scale and adapt to demand in market. In the US, for example, solar power has already reached cost parity with both coal and natural gas, while electric cars in the Europe are predicted to be cheaper to make than fossil-fuel cars by 2027.) – but for the time being, and for the most part, making a sustainable choice still means you’re making an expensive one.

The most recent GWI report included some surprising data. Fewer people now say that helping the environment is important to them compared to pre-pandemic – and the number of people who say they expect brands to be eco-friendly has also shrunk.

There are two likely reasons for this shift in attitude: the cost-of-living crisis and mental bandwidth. While climate change has always been an ongoing problem, it also feels like a long-term fight. A recession, and its immediate, detrimental consequences, is a now-problem. GWI’s research shows that, in some of the countries they monitor, there is a very clear relationship between changes in how people feel about their personal finances, and changes in the degree to which helping the environment is important. Priorities are shifting. Sustainability suddenly feels like a luxury again – and one that few can afford.

Problem 2: Sustainability is still hard to grasp

The second challenge facing sustainable businesses and those with green(er) products or services is mental bandwidth. Over the last few years, consumers have started feeling numb to the messages put out there by companies. In fact, they’re switching off in general. Globally, the number of consumers who say social media causes them anxiety has grown 11% since Q2 2020, while interest in news, politics, social issues and current affairs has declined in over 90% of GWI’s tracked countries since 2020.

Sustainability, despite being a global issue, is therefore having to fight for people’s attention. This is only made worse by opaque labels, confusing messaging and serial greenwashing. According to Trend Watching, “What does sustainability mean?” is still one of the most Googled sustainability-related phrases of the year. Evidently, something, somewhere, has gone very wrong.

But where there are problems, there are also opportunities. Below are three ways in which you can keep your sustainable business front-of-mind in these turbulent times.

Opportunity 1: Make it really, really easy to understand

The answer, therefore, lies in the simplicity. With a plethora of new terms being introduced on the daily (from ‘net-zero’ to ‘carbon-positive’), there is now an obvious demand for clarity and accountability.

That means developing simple, transparent, and tangible messaging. Your brand’s impact must be clear. Your methods easy to grasp. And if all else fails, you simply have to be interesting enough that people can’t help but look. Force them to see – don’t make engaging with you feel like a chore.

Heineken uses 100% renewable energy across its production process – something the beer manufacturer is keen to share with its audience. So, instead of just telling people about their renewable energy (been there, done that), they showed them the impact. With a billboard covered in solar panels that read, “This billboard is cooling your Heineken. Cheers.”

The homelessness charity Crisis used the same tactic to demand attention. Highlighting the fact that homelessness in the UK “can’t be ignored any longer”, they installed a massive, 4.3 metre tall, hyper-realistic sculpture outside King’s Cross Station. It stopped people in their tracks, leaving them with no choice but to reflect on the issue and hopefully support the charity in their work.

With consumers increasingly sceptical of green messaging, now is no longer the time for subtlety or nuance. For years, Patagonia championed sustainably behaviour – from telling people not to buy their products to repairing their items for free. But when their messaging was mirrored by other competitors in the outdoor clothing market, they made a drastic choice. Suddenly, Patagonia wasn’t just talking the talk anymore – they were walking it. Founder Yvon Chouniard gave away 98% of its stock to a non-profit fighting the climate crisis. And the result? People paid attention.

Opportunity 2: Adapt your messaging & offer to fit the times

If selling your entire business to an environmental charity isn’t quite your thing, there are other ways in which you can attract your audience to your sustainable products/services. And that’s by adapting your messaging – as well as your offer. Amid a cost-of-living crisis, consumers aren’t going to respond to indulgent, ‘treat-yourself’ ads – instead, they’ll want to hear from brands that understand and appreciate their current financial situation.

Think about reshaping your value proposition. If your business’s go-to message has always been around sustainability, why not think about the other benefits it provides? Here’s something worth noting: A June 2022 BCG survey found that less than 10% of consumers purchase sustainably just to “save the planet”. Up to 43%, however, said they would make make a sustainable choice if sustainability was linked to other benefits, such as health, safety and quality. That number increases again, to roughly 80%, when barriers such as convenience, information and cost are addressed.

So, what else can you provide? Does your product/service improve convenience? Is it made from more durable materials, so it lasts longer? Is it easy to repair? Even if your product is more expensive than its less-sustainable competitors, you could focus on telling the story of how quality items are cheaper in the long term.

Wake-up light inventor Lumie has tapped into both the cost-of-living crisis and the ongoing reusable trend with its range of refurbished lights. Offering their refurbished best-sellers at a 40% discount allows them to not only reach a wider audience, but it embeds them in their consumers’ minds as a sustainable, eco-conscious brand.

Opportunity 3: Embrace your role as a market leader

Ultimately, it might pay off to simply stick to your guns. According to EY’s ITEM Club, the leading UK economic forecasting group, the recession may hit hard now, but won’t necessarily last long. The group predicts that the economy will to return to growth during the second half of 2023. The risk of sticking with your sustainable offer is therefore likely to benefit you in the long run. Andrea Fuder, Chief Purchasing Officer at Volvo says, “During the journey it pays off to be brave… you can’t calculate everything to the last digit and only then make a decision.” It’s about the long-term view.

Decisive corporate action can be an opportunity to become a leader in the market. The green economy is growing steadily, and markets will be shaped by positive business behaviour moving forward. According to the World Economic Forum, “demand for green materials is projected to outpace supply, so leaders in developing a green offering and go-to market look poised to benefit.” Maybe now is the time to embrace your role as a leader in your own markets.

At saintnicks, we work with a wide range of brands looking to tighten their ESG game and enter the green economy. From fuel tanks to business travel, we’ve been hard at work perfecting the art of sustainable messaging and environmentally-friendly offers. As a business, we’re also in the process of finalising our own B-Corp accreditation, so know first-hand the challenges and opportunities that arise when tackling sustainability.

If you’re looking for new and exciting ways to stay relevant in market and reach the right audiences, drop us a line today. We’d love to have a chat and help you optimise your messaging.