To attract Millennial consumers, many brands are realizing the need to act responsibly – and to be seen to do so.
Don’t be evil. Not a bad idea. It may not have been emblazoned across Google’s masthead, but when the company’s founders penned its manifesto in 2004, they wrote: “Don’t be evil. We believe strongly that in the long term, we will be better served – as shareholders and in all other ways – by a company that does good things for the world even if we forgo short-term gains.” Since the 2015 restructuring, the motto has been slightly diluted to “Do the right thing” but it’s a message modern consumers have taken to heart.
According to last year’s Cone Communications/Ebiquity Global CSR Study, “Nine out of 10 consumers expect companies to do more than make a profit, but also operate responsibly to address social and environmental issues.” With 84% of global consumers actively seeking responsible products, it is vital companies are seen to do good.
Car manufacturer Tesla has shunned fossil fuels in favor of sustainable technology, shared patented information about batteries and electric charging stations and worked with competitors to boost the roll out of electric vehicles. Such transparency helped Elon Musk’s company record US$4.0bn of revenues in 2015.
Millennial consumers expect brands to stand for more than the products they sell. Music-streamer Spotify already has a cool image but has endeared itself to Millennials by partnering with the Starkey Hearing Foundation to provide hearing aids in the Philippines.
While the likes of adidas, Marks & Spencer and Nike have incorporated good into their company thinking, a raft of start-ups have embedded CSR from the get-go. London-based Bella Kinesis donates US$5 from every purchase to the Mann Deshi Foundation, a charity in India that provides rural women with a business education. “We wanted to create something that empowers women worldwide,” say founders Shaleena Chanrai and Roshni Assomull. In Seattle, women’s running apparel company Oiselle has partnered with Every Mother Counts (EMC) to launch a branded collection of clothing from which all proceeds go to the charity.
Some companies have adopted a ‘one for one’ model, in which they donate an item for every purchase a customer makes. Online optician Warby Parker has a slightly different approach: it tallies up the number of glasses sold and makes a monthly donation to its non-profit partners, which covers the cost of sourcing that number of glasses. Under this program, which trains staff in developing countries to sell spectacles at affordable prices, two million people in need have already benefitted.
Doing good can bring benefits of its own. The 2015 Nielsen Global Corporate Sustainability Report found that sales of brands committed to sustainability grew more than 4% globally, while those without grew less than 1%.
“In a world where trust in big businesses has been eroded – and social media can amplify reputational risk – it is vital that brands show they stand for more than making money,” says Mark Larson, Head of Consumer and Retail, KPMG in the US.
KPMG International has created a state of the art digital platform that enhances your experience, optimized to discover new and related content.