Sustainability In Business: what happens after COVID-19?
Sustainability in business is emerging as a key tool with which to recharge and rebuild myriad industries. COVID-19 has affected business at every level across the globe, drawing the pitfalls and inconsistencies of supply chains and exploitative practices into the open. The Coronavirus pandemic has wounded humanity but it’s also exposed pre-existing wounds.
The fashion industry is responsible for exploitative working conditions, modern slavery, micro plastics, pollution, overflowing landfill sites and rapid resource consumption. These issues predate Coronavirus.
Of course, many brands have been shifting toward circular practices for the long term benefits for many years. Companies with a strong focus on innovation and sustainability and circular practices have shown resilience in the face of a global pandemic, with many others pivoting their models to replicate this success.
It’s now clearer than ever that system change is needed and brands, investors and consumers are waking up to the facts. So what happens next?
Consumers want sustainability in business
Consumers were calling for more transparency from brands, allowing them to make informed, autonomous decisions, before the COVID crisis. That sentiment now remains the same. Recent polling by IPSOS conducted across 14 countries shows that 65% agree climate change should be prioritised during the coming period of economic recovery.
Industry data tells us that many consumers find it difficult to understand a brand’s sustainability claims. A study by GlobalData Retail recently found that 78.4% of UK shoppers struggle to understand which retailers are truly sustainable. Greenwash and false marketing have driven a wedge between brands and consumers.
At the same time, brands who are authentic, who are getting the conversation right are winners in today’s and tomorrow’s market. We’ve seen time and time again that authenticity and honesty result in consumer trust, loyalty and positive brand sentiment.
What does the future look like for sustainability?
“It’s unlikely that consumers will slip back into old ways entirely after COVID” says James Omisakin, Co-Founder and Cheif Product Officer of Compare Ethics. “We observed an increase in preference for sustainable products before this period, and Compare Ethics expects that to accelerate again.”
Data recently collected from 6000 consumers across western Europe, by McKinsey, has shown that an additional 16% would seek products with sustainable credentials when shops reopen, 20% intend to reduce overall spending for the rest of the year and 45% would look favourably upon companies that communicate concern and purpose rather than price and product.
Eugene Rabkin recently wrote for The Business of Fashion that, “two-three years from now, once the virus is beaten back and a vaccine is created, consumers will go right back to buying goods from luxury conglomerates and fast fashion behemoths alike.”
However, forecaster Li Edelkoort has suggested that quarantine consumption will likely have a profound cultural and economic impact, catalysing an acceleration towards heightened expectations of purpose-driven, sustainable action and opposition to wasteful business models
Forecasters have suggested that industries will be forced to embrace sustainable practices after COVID-19 but there is a danger that virtue signalling and greenwash may take the place of action if the proper tools are not used to objectively assess businesses and their claims.
True sustainability in business requires a profound transformation throughout entire industries and it will take more than brand pledges to achieve this. In order to adopt sustainable practices across global markets, transparency and verification are needed.
How do we secure the future for sustainability?
Innovative companies on average generate annual total shareholder returns that are 3.6 percentage points higher than those of their peers but market leaders cannot successfully innovate and remain profitable and globally cohesive without the help of tools, processes, collaborations with startups, sustainable businesses who can scale and lead the way.
In BCG’s 2019 Global Innovation Survey reported 80% of companies rated innovation a top-three priority, but only 30% said its organisations were good at it.
By using AI, algorithms and third-party data to develop verification tools and processes that can be applied globally, we can establish a ‘human-centric’ economy post COVID-19 and eradicate greenwashing in the process.
“A more resilient future for sustainability in business benefits everyone.” Says our Co-Founder and CEO Abbie Morris. “But that means accountability, it means real innovation at every level, not only for the fashion industry, but for every industry. Consumers see that, businesses at every level are aware of it and investors understand it.”