19.1 Sustainable Marketing

Environmental Sustainability

Consumers increasingly demand purpose over profits from the brands they work for, shop for, invest in, and allow within their communities. In fact, an IBM study on consumer behavior indicated that 57 percent of consumers would alter consumption habits to be more environmentally conscious, and nearly 80 percent of survey respondents indicated that sustainability is essential.¹⁰ Therefore, sustainability is a business imperative. As defined by Philip Kotler, Professor Emeritus at Northwestern University, “the concept of sustainable marketing holds that an organization should meet the needs of its present consumers without compromising the ability of future generations to fulfill their own needs.”¹¹ In other words, products and services consumed today should not harm consumers of tomorrow.

Sustainable marketing infuses purpose into socially conscious brands, products, and services. Marketing seeks to differentiate the brand based on mission. Sustainable brands define a purpose, orient to consumers' and related groups' values, align purpose with strategy, and reflect sustainability in marketing. This business strategy gives brands an edge with those who seek brands that align with their values.

The three pillars of sustainable marketing include environmental sustainability, social good, and economic return (see Figure 19.2). You may have heard the term “planet, people, and profits,” which describes the three pillars of sustainable marketing. Businesses meet the needs of the marketplace without sacrificing the future viability of the world. Companies are increasingly following an environmental, social, and governance strategy and use these ESG pillars to guide their work. The topic extends beyond sustainability into doing what’s right socially and ethically. Companies report their quantitative and qualitative results in annual disclosures to share the impact of ESG efforts.

Figure 19.2 Three Pillars of Sustainable Marketing (attribution: Copyright Rice University, OpenStax, under CC BY 4.0 license)

The environmental pillar focuses on reducing a company’s impact on the environment. For example, companies may reduce their environmental impact through recycling, reusing, minimizing waste, and increasing energy efficiency. Stonyfield Organic has a commitment to the environmental pillar with its plans to cut carbon emissions by 30 percent by 2030. In addition, it plans to focus on energy conservation, waste reduction, and sustainable packaging and logistics.¹² Additionally, Subaru of Indiana Automotive operates a “green lean” manufacturing facility that is designed as zero landfill. Subaru recycles or composts 98 percent of its manufacturing waste, and the remaining 2 percent is incinerated as waste to fuel.¹³

The social pillar considers a company’s consumers and employees and creates a more inclusive environment for its community. Much of the work in the social pillar occurs through responsive programs for employees that increase well-being. However, companies can also reach beyond their walls to impact their communities.

Adobe is another example of a company that works inside and outside its organization to effect social change by partnering with local nonprofits in the communities in which its employees live and work. Adobe has a rich diversity, equity, and inclusion initiative within its organization that empowers diverse voices. For example, Gen Create is a digital space for diverse thinkers and creators to collaborate to change the world for the common good. Finally, Adobe provides access to its software to underserved communities to work toward greater equity regardless of location.

The economic pillar (governance pillar) of sustainability concerns profitability and business ethics. Businesses cannot be sustainable if they are not profitable, which is a clear key sustainability performance indicator. Companies can demonstrate success in the economic pillar through proper governance structures, risk management, and compliance. Proper governance over voting, legal compliance, and accounting standards shows people that companies are following their obligations. Governance also includes business ethics, anticompetitive practices, and tax transparency. At the end of the day, is the company doing the right thing for its investors and all of its interested parties?

Governance structures can be examined to ensure diversity of leadership that aligns with the company’s various interested and influential groups. Fortune and Refinitiv partnered to develop a Measure Up initiative that aims to bring transparency to businesses diversity, equity, and inclusion work of the Fortune 500. The initiative reviewed measures such as policies, employee resource groups, percentage of minorities in board or leadership positions, and salary parity to determine a score for companies. Companies such as Microsoft, Target, and Gap rated highly on the criteria, demonstrating advanced diversity, equity, and inclusion.¹⁵ Amazon publishes its representation statistics sorted by job level to illustrate how it is making progress on creating a more diverse workforce.