28.11.2022  |  Klima, miljø og energi

What about sustainability in an energy crisis, war and economic recession?

Indhold fra partner Hvad er dette?

When Covid-19 hit us a few years back, most of us were in agreement that this was an extreme circumstance and level of insecurity that was unique. Fast forward two years and we are, again, in a situation that many feel is extreme and unique. So, what does this mean for the sustainability agenda, and especially for consumer interest?

Well, despite an eventful year, with a war in Europe breaking out, the energy crisis intensifying, inflation surging and a recession waiting around the corner, sustainability is still on people´s minds. At least when we follow-up on one of the overarching indicators in Sustainable Brand Index: how large a share of the population discusses sustainability. As seen in the graph below, the level remains at the same high level throughout the year (so far).

So, what does change in a recession? Primarily how we define the value of having a sustainable brand. According to us, there are four key arguments for a sustainable brand, regardless of the economy:

  1. Sustainability is a hygiene factor – to manage risk
  2. Sustainability is a factor in demand – to make consumers pay a price premium
  3. Sustainability is a differentiating factor – to stand out
  4. Sustainability is a brand-building factor – to build trust in the brand

In the upcoming challenging times, number 1 and 4 will be the ones to focus on. Hygiene factors, meaning things that you must do, regardless of the situation, will still increase in number and scope. Getting the consumer to pay a premium for a sustainable offer will be challenging. Differentiating your brand with sustainability is no longer an option, all brands are deep in the game nowadays, and all positions are taken, or all actors are expected to deliver on them. This leaves us with number 4 above, sustainability as a brand-building factor. This is where you will add value for your brand during and after the recession.

In 2013, Les Binet and Peter Field, two prominent figures in the world of advertising, released their study The Long and the Short of It - Balancing Short and Long-Term Marketing Strategies. Drawing on the IPA's (Institute of Practitioners in Advertising) databases of marketing case studies, Binet and Field conducted a study to identify which type of marketing, short-term activation or long-term brand building, was most effective in increasing sales. What Binet and Field found was that a balance between short-term campaigns and long-term brand-building was vital, but also that the latter, after six months or longer, was what drove sales the most. The optimal balance depended on the industry. Why is this relevant to sustainable branding? Well, if there's one thing we can see from our study Sustainable Brand Index™, as well as other studies, it is that brands are strengthened in the long term by communicating sustainability.

Last but not least, you really do not have a choice in a recession. Look at the scenarios below. If you pull back on sustainability, both the work and communication, you will be left hopelessly behind once the recession has passed. In short, do the right thing.

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