Why Millennials Might Save the Planet

4 Aug 2016
SOURCE:
Abbie Reynolds - Sustainable Business Council

By 2025, 75% of the global workforce will be millennials, the generation born between 1982 and 2000 – who may turn out to be our environmental and social saviours.

The fact that millennials are powerful force in driving sustainability was a highlight at the recent Sustainable Brands conference in Sydney which I attended.

The data shows that millennials, while also tagged 'selfie-obsessed', 'entitled' and 'self-indulgent', are significantly more engaged with sustainability and social justice than previous generations.

This is not surprising given they're generally highly educated, they've had strong awareness of social and environmental issues from an early age and have the shadow of climate change bearing down on their futures.

They're also more financially disadvantaged than previous generations, carrying student debt and facing real challenges affording a home. A Deloitte Global Study identifies that they are also hugely ambitious and seek purpose in life beyond money. So, that influences the brands they choose to purchase and the brands they work for.

Social media has also given millennials a voice and that voice strongly connects to being part of the solution not the problem – a force that is fundamental to the latest evolution of sustainability where purpose drives business. 

And we're not talking about businesses that simply have a corporate 'purpose' statement.  This is about businesses that stand for something; that rather than being a company with a mission, purpose businesses are a mission with a company.  

Purpose businesses are coming to life in the United States. An early pioneer is globally successful Patagonia, the outdoor clothing company started by a team of young outdoor enthusiasts who wanted to ''build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis''.

In New Zealand, we have a few trailblazers such as Eco-store and Z Energy, showing us how prioritising purpose leads to growth.

The data backs the model. According to the HBR 2015 Business Case Purpose Survey, during the GFC purpose businesses continued to grow. Whilst the 2015 Imperative and NYU Workforce Index shows that purpose also increases employee productivity, engagement and loyalty with 20% higher retention rates than non-purpose firms, workers 50% more likely to be in top positions and 47% higher net promoters of brand.

Purpose-driven businesses also connect better with their customers – particularly with millennials. Take Dutch company, MUD Jeans, the world's first 'circular' fashion brand targeting its conscious millennial consumers through not only producing organic certified cotton jeans but empowering them to participate in recycling this precious resource, by offering its Lease a Jeans concept.

It's an experience that delights and engages. Indeed, MUD Jeans runs weekly webinars with its millennial market who are queuing to share ideas and stories, to be part of the conversation and wider community of change.

This is an exemplar of the 'circular economy', an industry forecast to be worth $4.5 trillion in the next 15 years and which many millennials embrace. The circular economy decouples growth from natural resources and turns the focus to generating revenue from waste and innovative, customer-focused products and services.

In New Zealand, businesses find a dilemma in all of this.  Consumers (including millennials) tell us through surveys that they care, and that they will pay more for sustainable products and services.  But their actions tell a different story.  And what we learn is that consumers don't want to sacrifice functionality to make a sustainable choice.  And many can't afford to pay more for the sustainable option. 

Certainly, conscious consumption is not yet part of the social fibre in New Zealand, partly because we still don't see the negative impacts of our consumption behaviours and because making sustainable choices is complicated. Consumers need brands to help them do that. 

This is the conundrum for business. However, consumer demand for genuinely sustainable brands is soaring and driving growth. In the United States for example, organic beef represents just 0.4% of the retail beef market, but from 2011-2014 retail growth exceeded 300% with suppliers unable to meet continued soaring demand, according to IRI market research.

Likewise, for S&P Global 100 companies, sustainable product revenue stream grew at six times the rate of overall company results, according the 2015 Driving Revenue Growth Through Sustainable Products Report.

Suffice it to say, our hyper-connected, media savvy and always-on consumers living in a challenging world are demanding better from their brands. Any business that doesn't engage is vulnerable to being left behind.

And what advice was given at the Sustainable Brands conference, about how to respond to this dilemma?

  • Bring organisational sustainability champions and the marketing team together to enable better story-telling about 'purpose' and sustainability activities.
  • Give consumers what they want before they know they want it. Great brands can create demand for new products and services – there are plentiful examples of this level of innovation from Apple through to Uber.
  • Be clear on your purpose, and the policies and activities you will need to adopt to truly live that purpose – Patagonia ran an advertising campaign telling customers not to buy their jacket as part of a campaign to address unsustainable consumption.

This article featured in the Sunday Star Times on 31 July 2016