The United Nations has called it “the defining issue of our time”. With activists such as the teenage Greta Thunberg bringing the climate change emergency to the G7 and Extinction Rebellion bringing the streets of London to a standstill, the issues around climate change and sustainability are very much in the public consciousness.As the public wakes up to the challenges around the environment, so too do shareholders, consumers, employees and governments. They are asking business what it is doing to combat the effects of global warming.“Investors are moving us this way,” Brian Gilvary, chief financial officer of BP told the Confederation of British Industry (CBI) conference in London. “ESG (Environmental, social and corporate governance) makes up 50% of the conversation we have these days.”According to the WEF Global Risk Report for 2019, the “failure of climate-change mitigation and adaption” is the second most impactful risk in the world. Investors and customers – particularly Millennials – are putting pressure on companies to demonstrate that they have a social and environmental conscience at the heart of their business.
Conscious consumerism: what it means for business
“The growth of conscious consumerism is putting businesses under pressure to demonstrate their purpose, in order to maintain competitive advantage,” says Francesca Rivett- Carnac, co-founder of Stand Agency – a communications and impact relations agency that works with brands and charities.Price, product and service are givens, she says. Younger consumers now expect brands to show they are acting in the best interests of sustainability, transparency and fair employment. “This shift in consumer mindset is fuelling a rise in new market entrants who are putting purpose at the heart of their business from the outset, across sectors as diverse as financial services, fashion, health, food and drink,” she explains.“It’s not difficult for investors to see the opportunity. The success of impact investing has already helped to challenge perceptions that purpose comes at the expense of profit. Global businesses like IKEA, Unilever and Patagonia are demonstrating that it’s possible to make a positive social and environmental impact while maintaining a healthy bottom line. Purpose-led businesses are having a moment.”