How can businesses include ecological action and social responsibility into its marketing efforts while remaining dedicated to corporate profitability?
Climate change and social responsibility shape the need for companies to augment their marketing strategies. Climate reports produced by leading national institutes and international organizations indicate continual increases in levels of atmospheric greenhouse gases. Atmospheric carbon dioxide levels are forty percent higher than 1750 levels.
The consequences of this increase are more volatile temperatures, increased health risk, decline in the quantity and quality of freshwater, degradation of terrestrial and inland water ecosystems, rising sea levels, and threats to biodiversity. Climate change is already affecting where people live, how they live, and how firms conduct business.
An increased awareness of corporate social responsibility has been concomitant with the rise in efforts to address climate change. The United Nations recently published 17 goals for sustainable development that seek to promote prosperity while protecting the planet. These goals address a range of social needs including responsible consumption and production, education, health, poverty, gender equality, social protection, and job opportunities.
Given that commerce is essential to the attainment of these goals, industry leaders participate in the development process. Firms that address these goals can enhance their commitments to corporate social responsibility. In addition, commitment to these goals has potential to affect consumer preferences and reduce the carbon footprint of the supply chain.
How can the firm incorporate ecological action and social responsibility into its marketing efforts while remaining diligent about corporate profitability? The 1987 Bruntland report from the World Health Organization offers a starting point when it defines sustainability as development that “meets the needs of the present without compromising the ability of future generations to meet their own needs.” This definition provides a compass pointing towards the goals of sustainability, but it does not offer a roadmap outlining how to attain a level of sustainability.
Since the publication of this report, industry practice has increasingly embraced the notion that sustainability derives from focusing on the triple bottom line.
Figure 1 outlines the pursuit of sustainability. The sustainable organization must generate acceptable levels of economic performance or it will not survive. It must also nurture social performance in its interaction with customers, suppliers, consumers, and other interest groups. Survival is also contingent on the firm’s ability to achieve acceptable levels of environmental performance throughout the supply cycle from raw material procurement to post-consumption reclamation. UN sustainable development goals enable the firm to align its social responsibility efforts and environmental action with other public and private organizations.
Figure 1 illustrates that these alternative bottom lines are not always compatible. For example, the firm can raise its short-term financial performance by ignoring the costs of waste produced in its manufacturing facilities. The sustainable organization, however, simultaneously works toward achieving heightened performance in the economic, social, and environmental realms.
We use this triple bottom line logic to define sustainable marketing as the study all efforts to consume, produce, distribute, promote, package, and reclaim products in a manner to achieve ecological, economic, and social objectives. The inclusion of “all efforts to consume” recognizes that many entities are involved in sustainable marketing. Sustainable marketing is not limited to government or non-government organizations, nor is it solely an activity undertaken by consumers.
Manufacturers, wholesalers, retailers, and services firms each have opportunities to contribute to sustainable marketing. This definition also recognizes the need to consider the production, distribution, and reclamation of products as integrated components of the marketing effort. Efficiency at one stage of this process (e.g., distribution) may offer advantages in the channel, but the goal of sustainable efforts is to limit the total ecological influence associated with consumption. Finally, sustainable marketing must consider the promotional efforts employed to gain consumer support of ecologically friendly products.
This perspective enables the firm to take an eclectic view of its marketing efforts. Ninety-three percent of the 250 largest firms worldwide now report on their ecological, social and economic performance via sustainability reporting . Consumers are also more inclined to incorporate broader societal and ecological concerns into their decision-making. Across markets, buyers’ interests in becoming more sustainable influence a substantial amount of buying decisions. Firms that adopt sustainable marketing offer marketplace solutions that provide triple bottom line value to businesses and consumers.
Notes:
1. Dahlstrom, Robert and Jody Lynn Crosno (2018). Sustainable Marketing, Chicago, IL: Chicago Business Press.
2. Sandra A. Waddock, Charles Bodwell, and Samuel B. Graves (2002). “The New Business Imperative,” Academy of Management Executive, 16 (2), 132-148.
Savitz, A. (2012), The Triple Bottom Line: How Today's Best-Run Companies are Achieving Economic, Social and Environmental Success--and How You Can Too. San Francisco, CA: John Wiley & Sons.
3. Carter, Craig R. and Dale S. Rogers (2008), “A Framework Of Sustainable Supply Chain Management: Moving Toward New Theory,” International Journal of Physical Distribution & Logistics Management 38(5), 360-387
4. https://www.un.org/sustainabledevelopment/sustainable-consumption-production/ (7 June 2019).
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The article was written for BI Marketing Magazine.