Keep raising the bar through leading purpose driven business
Today sustainability is on everybody’s lips – sometimes even to the point of annoyance if the lack of concrete content is too evident. However, whether talking about customer expectations, operations or procurement, sustainability is the common nominator.
There are a couple of strongly emerging sustainability trends that I find very impactful and will also change our business landscape. The first and very evident one is the rise of the eco-conscious and empowered consumer making consumption decisions based on a set of rigorous sustainability criteria. This consumer is typically a millennial on generation Z and combined they represent the single biggest consumer group in terms of aggregated procurement power. This is really a force to recon with as these consumers also vote with their wallets.
I get often challenged with the argument that consumers in general are not willing to pay more for sustainability. Based on consumer surveys they truly are, but only if the benefits are understood and the added value and impact of sustainability is transparently communicated. In addition, more often consumers decide not to buy at all if a product or service is perceived as unsustainable.
The chain reaction that the eco-conscious consumer has started by demanding more from brand owners and retailers quickly travel upstream and reach the producing industry. Most companies have already seen the business opportunity and are adding sustainability elements in their products, value propositions and marketing efforts. The business potential is simply too large to ignore, and the most ambitious companies are completely rethinking their strategies and business models to capture the growth opportunities stemming from decarbonisation and the creation of circular economies. Sustainability based business concepts seen as radical few years ago are quickly mainstreaming. For instance, who would have guessed that the retailer Walmart, also one of the largest companies in the world by revenue, has set the disruptive target to beyond sustainability and aims to completely transform to a regenerative company operating within the planetary boundaries and net-positive impact. Where giants such as Walmart are leading the way others will follow.
Increasing numbers of companies are abandoning the long-lived idea of maximizing shareholder value being the only responsibility of a business, as once defined by Milton Friedman and the Chicago school. Alternative views are quickly taking over. The new kid on the block is the purpose driven company. Prominent scholars such as Harvard professor Colin Mayer claims that winning companies of today are driven by purpose and seek inspiration and growth by producing profitable solutions to problems of people and planet while at the same time not profiting from producing problems.
Purpose and sustainability are related but different ideas. Purpose always comes first. Sustainability can either contribute to it or can detract from it. Ahlstrom’s purpose is to purify and protect, with every fiber, for a sustainable world. Its through our business and products we can solve the problems our people and planet are experiencing and make positive impact in the world.
This is a blog post from Johan Lunabba, Vice President Sustainability & Public Affairs