Making Sustainability Marketing Work - Part 1

(The political backlash against ESG and other aspects of so-called "woke capitalism" is creating a conundrum for some marketers. On one hand, the backlash is real, and marketers would rather not attract the attention of anti-ESG partisans. On the other hand, recent research continues to show that a majority of people are concerned about the environment and generally support actions aimed at improving sustainability. In this post, I'll discuss the current state of support and opposition to ESG, and in my next post, I'll describe how marketers can make sustainability messaging more effective.)

The ESG Backlash is Real . . .

The political backlash against ESG, the practice of using environmental, social and governance factors to assess a company's performance and impact on society, is undeniable.

• Earlier this year, President Trump issued an executive order requiring federal agencies to shut down diversity, equity and inclusion (DEI) initiatives, and end DEI performance requirements for federal contractors and grant recipients.

• At least 21 US states have enacted anti-ESG laws in some form.

• Several high-profile US companies - including Meta, Walmart, Target, McDonald's, Ford, Citi, Harley Davidson, and Tractor Supply - have scaled back or otherwise modified their ESG policies.

While various versions of "corporate social responsibility" have existed for decades, the modern ESG construct entered the business mainstream following the publication of an influential 2004 UN report titled "Who Cares Wins."

In the following decade, numerous research studies were published showing that sizable majorities of consumers and business buyers were placing great importance on the environmental and social track record of companies when making purchase decisions.

As a result, some marketing leaders became enamored with "purpose marketing" and began incorporating environmental and social claims and themes into their marketing campaigns.

It's not surprising that the current political environment is causing many marketing leaders to question the wisdom of using ESG-related messaging in their campaigns.

While a healthy dose of caution is warranted, most companies should not abandon ESG-related messaging altogether. That's because not all ESG-related marketing messages are equally polarizing.

But It's Not Universal

ESG is an umbrella concept that covers a wide range of issues and initiatives, and public attitudes toward those issues and initiatives vary greatly. So far, the most intense public opposition to ESG has tended to focus on social initiatives such as DEI.

In contrast, several recent research surveys have shown that most people are concerned about environmental issues and want to buy products and services that are environmentally sustainable. One of the more recent and most robust surveys I've reviewed is the "2025 Conscious Consumer Report" by Public Inc. (the "Public Inc. Survey").

The Public Inc. Survey

The Public Inc. Survey was an online survey of more than 3,000 adults (ages 18+) in the United States and Canada conducted by Ipsos on behalf of Public Inc. The survey was conducted July 11-24, 2004 among a nationally representative sample of 1.510 US adults and 1,508 Canadian adults. Survey data was weighted by age, gender and region using the latest available census data for each country.

The report states that the precision of the survey was measured using a credibility interval and that the survey is accurate (overall) to within +/- 2.0 percentage points, 19 times out of 20.

The results of the Public Inc. Survey reveal broad interest in environmental issues and widespread support for sustainability.

• 76% of US respondents agreed that climate change poses a serious threat

• 70% of US respondents said that companies should be doing more in terms of sustainability and ethical best practices

• 79% of US respondents believe that being purposeful in how they spend their money is one of the best ways to motivate companies to change

• 68% of all respondents agreed that sustainable products improve the health and well-being of their children and family

• 65% of all respondents agreed that sustainable products improve their own lives

• 58% of all respondents said they would pay more for products and services that are ethical and sustainable

Perhaps most important, fully three-quarters of the respondents identified themselves as environmentally conscious consumers.

At first glance, these survey findings suggest that using sustainability claims in marketing should be an easy decision. Unfortunately, however, these findings don't tell the whole story.

First, it's important to recognize that these findings may overstate the breadth (or at least the intensity) of public support for sustainability. And second, other findings in the Public Inc. Survey suggest that the sustainability claims marketers have been using have not been all that effective at driving increased sales of sustainable products and services.

I'll address these issues in my next post, and I'll describe four attributes that will make sustainability claims more effective at driving revenue growth.

Image courtesy of medicalofficecareers.com via Flickr (CC).