A fast-changing world: How B2B marketers can embrace sustainability
Sustainability isn’t just a big topic for B2C – it’s setting the B2B agenda as well. B2Bs are facing increased pressure from customers, investors, and regulators to improve on environmental matters. In addition, there is evidence that environmentally-conscious companies generate greater customer loyalty and conversion rates – so what can you do to embrace sustainability within your business?
First, what does B2B sustainability mean?
Essentially, it means sustainable growth – not sustainable in the sense that it endures, but growth generated with minimal environmental impact. In essence, this means decarbonising operations and ensuring that investments are ethically as well as economically sound.
Reducing environmental impact isn’t cheap. One McKinsey report looked at the cost of reaching net-zero emissions by 2050, looking at sectors which cause about 85% of current emissions. They concluded that it would require capital spending of $3.5 trillion per year more than is currently spent now, for a total of $9.2 trillion per year. That’s equivalent to half of global corporate profits in 2020.
On the face of it, this seems overwhelming. But as with any large project, it starts with small changes that build up over time.
What is driving the shift to B2B sustainability?
By 2025, it’s estimated that millennials will make up 70% of the workplace. This means that an increasing proportion of B2B decision-makers are millennials. Numerous studies show that millennials care more about sustainability and company purpose than their forerunners – the baby boomers and Gen X – do. It is likely that millennial decision-makers will be looking for evidence of sustainability as part of their selection process.
And this doesn’t apply to just buyers either. The millennial workforce has also proven to be more discerning about which companies they want to work for. As Kirk McDonald, CMO at AT&T Advertising & Analytics, succinctly puts it: “Boomers worked for companies. Gen Xers work for people. Millennials and Gen Z work for purpose.” With both prospective buyers and talent taking sustainability into account, companies which can’t evidence green credentials are at disadvantage.
This demographic shift is good news for B2Bs which are investing in sustainability, since it can be a source of competitive advantage. But changing your operations is not sufficient – you also need to ensure that your target audiences know about it. Whilst some companies engage in greenwashing, others fail to communicate their sustainability credentials even when they have a strong story to tell.
How can B2Bs become more sustainable?
On a basic level, it means things like:
- Selecting more ethical vendors
- Reducing product packaging – e.g. cardboard and plastic
- Reducing waste from events and giveaways
- Introducing a more sustainable dimension to marketing – e.g. cutting down on direct mail
- Forging partnerships with charitable organisations and good causes
On a more substantive level, B2B companies need to delve deeper into the value chain, examining not only their own carbon footprint but also that of their customers, their customers’ customers, and their partners to understand the opportunities for decarbonisation within those different value chains.
A sustainable value chain will be different for every business, but it usually involves waste-reduction strategies for production and shipping, as well as reduced greenhouse gas emissions. It can also mean minimising the use of natural resources, like water, coal, oil, and natural gas – and in turn, maximising the use of renewable resources, such as wind energy, solar energy, and hydropower, as well as renewable materials, like bamboo, cork, and corn-derived plastic.
In essence, any B2B which wants to generate green growth needs to:
- Develop a strategy for sustainability
- Make it operational through clearly defined measures
- Take new offerings to market to unlock top and bottom-line growth.
This will involve developing a perspective on which customer segments to prioritise, updating your value propositions, charting new routes to market, and potentially upskilling your team. You may also need to adjust pricing.
Research suggests that both B2C and B2B customers could pay premium prices for sustainable alternatives. This is because demand for green products is expanding more rapidly than supply, which creates a higher willingness to pay. Once supply catches up with demand, that should ease, and other factors will influence prices for green alternatives, such as regulations around carbon taxes.
Communicating sustainability in your B2B marketing
Investing in your operations is only the supply half of creating a sustainable business. The other half is demand – turning those investments into revenue. That’s why it’s important to communicate the value of your sustainability to your customers and claim that position in their minds.
B2B marketing campaigns which promote sustainability are most successful when they are strategically planned and executed. Businesses need to communicate more than just a credible stance – they must also convince customers of the value and advantages of sustainable actions. After all, not all customers will immediately appreciate the benefits of using green products and services offered by their business partners. Elements to consider include:
Localising your message:
Sustainability doesn’t always mean the same thing in every culture. Consult a Local In-Market Expert to find out what the key sustainability issues are in your target markets, and what messages are likely to resonate.
Green business certifications are a good way to win the approval of customers and investors. However, they are not all created equal. Carry out research to find out what is most relevant and credible to your sector and target markets. Explain to customers what the certification means – don’t assume they already know. (This is particularly true when marketing across borders.)
Skipping the sermon:
It is easy for messaging about sustainability to turn into sermonising, which can be off-putting to some target audiences. Don’t try to convert others or initiate potentially contentious discussions, but adopt a clear and transparent position, communicate it and answer questions as honestly as possible.
This goes without saying. It’s important to avoid exaggeration and only make claims which can be supported by fact. A realistic message like ‘We’re trying but not quite there yet’ is more powerful than big claims which fall apart under scrutiny. Terms like ‘green’, ‘sustainable’, ‘ethical’ etc are broad and open to interpretation – back up your claims with specific and up-to-date facts and figures that demonstrate meaningful action.
Make sure you can document any claims you are making, and make these publicly available – for example, on a website or in an appendix.
Make sure your marketing is proportional to the effort you’re making:
A massive global marketing campaign to promote a relatively small sustainability initiative might look as though you’re trivialising the issues involved and could even invite ridicule. Keep your marketing efforts proportional to the actual sustainability changes you are making.
Examples of sustainable B2B companies
Some of the biggest B2B players are counted among the World Economic Forum’s ranking of leading sustainable corporations worldwide. For example, a B2B company – Schneider Electric – is number one on the list. Other examples include:
- Salesforce, a leader in cloud-based software, started Earthforce, a team of employees dedicated to raising awareness and volunteering to clean up the planet.
- Flexis is a company which many businesses rely on for product development, logistical support, and supply-chain solutions. Its most recent sustainability efforts include an e-waste programme, reverse logistics, and solar tracking.
- Uzin Utz is a leader in flooring systems which is considered a pioneer in sustainability. The company develops and produces low-emission installation materials and launched a solvent-free adhesive as far back as 1987.
- BASF is engaged in sustainability within construction chemistry. The company highlights this with its campaign “Quantified Sustainable Benefits” and a dedicated microsite. On this site, partners such as architects, investors and construction planners can find multimedia information on environmental sustainability and how the industry can benefit from this.
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Oban can help your B2B business
In the coming years, it’s likely that companies that don’t invest in sustainability will see a negative financial impact. This will force them to acknowledge the shift in buyer behaviour and make changes to their operations and marketing. It may be easier for them to make these changes than it was for pioneers because the industry and its consultants will have built up a bank of knowledge on what to do.
Oban has an extensive track record of helping B2Bs grow by expanding into new markets and building their presence in existing markets. Our network of Local In-Market Experts provides the linguistic, cultural and digital insights that often make the difference between success and failure. To find out more, get in touch.
Oban International is the digital marketing agency specialising in international expansion. Our LIME (Local In-Market Expert) Network provides up to date cultural input and insights from over 80 markets around the world, helping clients realise the best marketing opportunities and avoid the costliest mistakes.