Sustainability: a vital challenge for brands and the planet 

Even if the Coronavirus crisis has pushed the figure of Greta into the background, both brands and their stakeholders are becoming aware that sustainability is essential. Most strikingly, shareholders themselves seem to have made sustainability one of the most important criteria.

Signs of change

At the end of 2020, despite the reluctance of their directors, P&G shareholders demanded greater transparency and obtained a report on what the company was doing to limit deforestation (P&G’s portfolio includes brands that are particularly tree-consuming, such as Pampers, Tampax and Tide).

Kering (which owns luxury brands such as Gucci and Yves Saint-Laurent) found that certain cashmere goat breeding practices were damaging to the Mongolian steppes. Together with the Wildlife Conservation Society, NASA and Stanford University, the group developed more sustainable breeding techniques and effective tracking.

AB inBev (the world’s largest brewery group, which owns Budweiser and Corona, among others) pledges to use only low-carbon aluminium cans. Ikea is committed to producing only furniture with recycled products by 2030 and is launching its second-hand buy back programme (not yet active in Switzerland to our knowledge). And the list of brands that are taking action is growing.

Deloitte, in its “Resources Study 2020” report, identifies three major trends that may determine better energy management: increasing consumer sentiment and employee pressure to address climate change, the convergence of environmental and economic considerations, and the growing quest for reliability, resilience and self-sufficiency.

As a result, both large institutional shareholders (such as Black Rock, for example) and individual investors are becoming increasingly sensitive to the concept of sustainability and are likely to cause brands to reconsider their relationship with the planet and its inhabitants.

Swiss brands in good position

This year, the Wall Street Journal published the “100 Most Sustainability Managed Companies” ranking. This ranking of listed companies, based on 4 criteria (human capital, business model and innovation, environment and social capital), identifies the brands most likely to deliver sustainable value to their shareholders.

Interestingly, brands such as Facebook and Apple are ranked 65th and 68th, while Google, Amazon and McDonald’s do not even make the list. It is also worth noting that no car brand is included in this ranking. Similarly, in terms of countries, some business giants are falling behind (India with two companies listed; Russia, only one) or are completely absent (no listing for China).

Seven Swiss brands are included in this ranking: Georg Fischer (10th), SGS SA (13th), ABB (16th), Nestlé (29th), Lonza Group (34th), STMicroelectronics (35th) and Geberit (70th).

This shows that our companies are becoming aware of the importance of sustainability in terms of development (in comparison, the USA ranks 18 brands, Japan 15 and France 9).

Towards sustainability leadership

Brand’s practices are increasingly observed and their environmental and social behaviour has a significant influence on consumers. This may explain why shareholders and investors are paying much more attention to these aspects. The figures also show that brands whose strategy focuses on social responsibility and sustainability are generally more profitable.

And the statements of Shiro Kambe, one of the heads of Sony (the brand that occupies third place in the Wall Street Journal ranking), sum up the current awareness and sound a warning: “If we want to continue in this type of business, the planet and society must be sustainable and healthy. Without that, Sony cannot exist. So it’s a question of survival not only for the planet and its inhabitants, but also for the brands themselves, whether they are mega, large, medium, small or start-ups…