- The COVID-19 crisis has heightened awareness of the importance of addressing environmental challenges.
- Companies are seeking to increase the environmental and social resilience of supply chains.
- To make the case for investment, they need to understand how to use sustainability as a competitive advantage.
Whether making collective commitments on biodiversity or developing alternatives to the plastic bag, it’s encouraging to see that leading consumer goods companies are not holding back on their sustainability activities. However, an important question dominates the consumer goods and retail agenda – one that is critical to scaling up these activities: how can companies use sustainability as a source of competitive advantage?
Doing so is not easy. First, the complexity of the science, the environmental trade-offs, and the many sustainability standards out there mean that consumers are understandably confused.
Take a single-use plastic bottle. One company might claim to have made its bottles easier to recycle. Another might say it’s making its bottle from paper, while another might say it has moved from plastic to glass bottles. How can a consumer – with little time or appetite for scrutinizing detailed labeling – know which of these solutions is more sustainable?
It’s equally difficult for corporate leaders to know where to focus. In our analyses of which issues are material for consumer-facing companies – especially those in the food and beverage sectors but also those in home and personal care – we often find up to 25 topics of importance.
But how does an organization pursue 25 sustainability initiatives that meet its environmental, social, and governance (ESG) goals while also presenting a coherent narrative and a sense of distinctiveness?
Adding to the challenge is the fact that discussions of COVID-19 and the human and economic devastation it has created are dominating the public debate. Yet the pandemic is closely tied to environmental and social challenges, such as access to health, which calls for an integrated approach.
The good news is that the case for pursuing a sustainability agenda is clear. In an article earlier this year, we argued that abandoning their efforts today could leave companies facing grave risks down the line and make restarting sustainability efforts impractical or unaffordable.
Since then, we’ve been encouraged to see that leading consumer companies have not abandoned or watered down their sustainability ambitions. These companies understand that the COVID-19 crisis has actually heightened awareness of the importance of addressing environmental challenges.
In fact, in a recent BCG survey of more than 3,000 people in eight countries, 70% of respondents said they were more aware than before the crisis that human activity threatens the environment, which in turn poses a threat to life on earth. More than two-thirds of respondents said they thought economic recovery plans should make environmental issues a priority.
