Environmentally friendly products are causing storms in the consumer market.
Green consumer goods take the throne in part thanks to the rise of fast-growing startups like Seventh Generation (green laundry) or Beyond Meat (which makes plant-based meat substitutes) to deliver certified products. green, the quality that consumers really want to buy. Companies, including Unilever, realize that “You have to think not only about money, but also convenience and quality,” said Engel, of Unilever. No one wants to buy a product that is good for the environment that cannot remove dirt from their clothes ”.
The generational shift also contributes to the green wave. NYU Stern’s research shows that younger households are more likely to buy products introduced as sustainable. Multinational corporations, amid slowing growth, quickly embraced this association, promoting R&D and marketing focusing on the sustainable segment. The online retailer Amazon also launched Climate Pledge Friendly this year in six countries.
In the context of climate change, green consumption trends offer brighter prospects for the future of the planet. But a real shift in sustainability is often costly, leaving manufacturers scrambling with the question “Who will pay for green products?” The NYU Stern report found that most green-labeled products cost 3-165% higher.
Many businesses believe that sustainability means sacrificing profits. Sustainable production requires an expensive investment in new processes and equipment, so developing green products puts them at a disadvantage over competitors from emerging economies, while the It is difficult for their suppliers to ensure transparency as well as sustainability of their inputs. Unable to push this additional cost to consumers, some businesses seek to reduce costs and increase efficiency in operations.
François-Xavier Roger, Chief Financial Officer Nestlé, at a conference in September, said the cost of packaging exchange and carbon neutrality is not small and added: “Consumers will not pay for this. Neither are investors and shareholders. What we have to do is find efficiency in our supply chain and in our departments and departments to keep our green efforts. Paula Quazi, Co-Founder of Smol, a startup in green laundry products, also said the carton packaging the company uses is much more expensive than plastic and the company has to balance the extra cost. there.
Not all green change has a negative impact on profits, Engel argues. He cites Unilever’s energy-saving efforts that have helped reduce costs. Or Tesla, Nike, IKEA … have earned more than $ 1 billion in annual revenue from sustainable products or services. The Harvard Business Review report also showed that between 2006 and 2010, the top 100 most sustainable global companies in the world had significantly higher average sales growth than their competitors.
Not just financial benefits. The more evidence that sustainability brings with it a range of business advantages such as driving innovation, building risk management, strengthening customer loyalty, attracting talent, especially helping companies outperform moving away from short-term growth goals and repositioning businesses for a future of depleted natural resources. One example is Ørsted, the multinational power corporation in Denmark. Within 10 years, Ørsted has transformed from one of Europe’s largest fossil fuel users to a leader in offshore wind power. Ørsted has reduced carbon emissions by up to 86% and became one of the most sustainable companies in the world according to the Corporate Knights 2020 Global 100 Index.
Another issue, such as that of Sustainability Consultant Sue Garrard, is that “Some companies are taking sustainability seriously and are really working on doing the right thing. But there are many brands that just ‘eat’ this opportunity to sell … In fact, some green claims about products are misleading ”. She cited many of the products claiming to be made from recycled ocean plastic, while there is currently no system for large-scale collection of ocean plastic and only very few small facilities recover trash from landfills. sea. That is why this past November, the UK Department of Competition and Market conducted an investigation of products and services claiming to be environmentally friendly.
John Sauven, Executive Director of Greenpeace UK, emphasized: “Any company that wants to gain public trust and wants to be a leader in green initiatives must first do its best, then Please display billboards ”.
Translated by Hoai Thi
Source from: Brands Vietnam