Sustainability is a recurring buzzword in nowadays society. More than ever, the whole world is experiencing the catastrophic consequences of global warming and companies need to adapt to this changing environment. At first, when Environmental, Social and Governance concepts started to pop up during advisory meetings they were seen as an opportunity from a marketing perspective. The main ideology at the time focused on “anything that helps the planet is good for business”. Having a sustainable profile meant a lot at the eye of the customer. For this reason, many brands started to adopt the word “sustainable” or “organic” for enhancing their brand awareness.

As concerns towards, not only environmental issues but also to human rights, started growing, individuals became more observant on whether brand’s were actually sustainable. It has been discovered over time, that many companies provided misleading information about how eco-friendly their products are (Investopedia, 2021). This occurrence is known as “greenwashing”. A notable example are the world’s biggest carbon emitters which attempted to rebrand themselves as number one in saving the planet. Companies which usually go through the process of renaming, repackaging and rebranding without providing any supporting data, are greenwashed. Thus, it is important not to listen just the marketing side, but dig up some information which can be found on the company’s website. By reading what they have accomplished and by taking a closer look on their priorities, a greenwashing business can be easily identified.

The generational shift is having a positive wave upon the growth of awareness and consciousness on environmentally friendly products. Millennials have the reputation for being values-driven since they have been through the two big crisis being the Great recession (2008) and the Covid-19 pandemic (CNBC, 2021). As a consequence, they became activists of the climate change situation. A recent PwC report illustrated that 57% of consumer said companies should deal more with environmental issues, such as global warming and water distress, 48% want companies to show more progress on social issues, such as integrity and diversity, and 54% expect more from companies on governance issues, such as addressing increasing pay gaps (Financier Worldwide, 2021). On the whole, companies need to be more proactive on ESG concept especially the big players of each sector. Fashion, for example, is amazing in creating desire but at the same time it fuels some of the world’s biggest problems: overconsumption, overproduction, environmental damages and work ethics. The big maisons are trying to shift their orientation in solving these issues, but is still not enough. They should portray this example to other companies, but unfortunately the numbers do not show their effort so far. The only way to avoid the deterioration of the consequences of climate change, companies and governments seriously need to put into practice their vows and as Max Bittner, CEO of Vestiaire Collective, said in an interview with McKinsey (2021) “But I think what is happening right now, and why this is more front and centre than it’s ever been before, is because we’re starting to now live through the first real impacts of what global warming actually means. I think right now we don’t have a choice.”

On top of that, the United Nations sustainable development goals (SDGs) are facing a financing gap of $100 trillion and in order to close this significant gap a collaboration between financial institutions and top business players will be needed to meet the 2030 goal. This gap presents a snowball effect, because it perpetuates in every sector which is trying to adapt to new sustainable terms. For example, the fashion industry is at least $1 trillion short of the total investment needed to decarbonize the industry and reach a stabilized phase (Vogue Business, 2021). As a matter of fact, on one hand countries are incorporating laws for businesses to reduce their carbon footprint but on the other, funding is necessary. New, environmentally friendly technologies are expensive and a funding is required to sustain the cost.

To sum up, sustainability cannot be considered as a marketing tool anymore. Countries, companies and consumers need to take a step towards more sustainable choices by taking into account the three ESG concepts. If we don’t act now, there is no turning back.

 

Sources:

CNBC. (2021). Millennials spurred growth in sustainable investing for years. Now, all generations are interested in ESG options. https://www.cnbc.com/2021/05/21/millennials-spurred-growth-in-esg-investing-now-all-ages-are-on-board.html

 

Financier Worldwide. (2021). Material issues: ESG in the age of activism. https://www.financierworldwide.com/material-issues-esg-in-the-age-of-activism#.YZO6uk7MKUm

 

McKinsey & Company. (2021). How online marketplaces are making secondhand fashion a first choice. https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/how-online-marketplaces-are-making-secondhand-fashion-a-first-choice

 

Vogue Business. (2021). Fashion’s climate goals have a funding problem. https://www.voguebusiness.com/sustainability/fashions-climate-goals-have-a-funding-problem