And why should we create sustainable products ?
In order to explain why sustainable products create value, it is important to better understand what sustainable design is.
Sustainable design or eco-design is a way of designing products according to the principles of sustainable development. In recent years, sustainable concepts and products have multiplied to the point of transforming our consumption model. Many have questioned why has this movement gained so much in popularity? While we question how to explain why sustainability-driven design projects and products create so much value?
At Punctuate Design, we have paid particular attention to this last question and have clarified it for you in this article. Based on our experience in sustainable and circular design, in addition to the various studies and analyses we have reviewed and investigated into, we can offer you our clear and objective answer.
In 2018, Futerra released a study which showed that 88% of consumers were expecting their favorite brands to drastically change their strategies in terms of sustainable development. This can be linked to the fact that, in recent years, environmental considerations due to climate change are becoming deciding factors in our consumption habits.
In fact, consumers are becoming increasingly sensitive to the consequences of their behaviors and lifestyles on the environment due to mediatic exposure of man-made ecological catastrophes. For example, some consumers found themselves outraged at the televised sight of the infamous plastic continent which has formed from the accumulation of waste products and garbage within the Pacific ocean. Another example where these ecological impacts are being exposed by the media is the published FMI report which breaks down the causes of global warming. As modern consumers are becoming more aware of these challenges, they are pressuring for legislations to be put in place which lead to more responsible production and consumption habits.
In a 2020 report, the American company IBM insisted on the importance for brands to move towards a more sustainable model. It considered consumers as the drivers of this evolution. In this report, we learned that 6 out of 10 consumers were ready to modify their buying habits to reduce their environmental impact and that 8 out of 10 respondents considered sustainable development as an important factor in their consumption behaviors.
Lastly, amongst the most concerned, 70% said they were ready to pay an average of 35% premium for sustainable and environmentally responsible brands. This IBM report thus revealed a clear and serious desire to change towards more sustainable products among its consumers.
However, this willingness to change is experienced differently by each consumer: it is context-sensitive and idiosyncratic, being influenced by each person’s previous experiences, cultural background, and values and expectations. In that sense, not all consumers perceive this in the same manner. If some feel ready to evolve by themselves, others on the contrary wait to be encouraged to do so. Mirroring Futerra’s results, according to Forbes, 88% of consumers were waiting for a first change from their prefered brands before considering their own evolution.
We could identify 3 types of consumers ready to adopt a more sustainable consumption model:
The first type is the convinced consumer, whose desires are linked to his convictions and values. Feeling worried and alerted by the climate emergency, this consumer will tend to swiftly adapt their consumption model. The second type is a pragmatic consumer who will tend to choose a sustainable product among a multitude of other criteria. Their choice will be primarily based on the quality-price ratio, but they will not necessarily choose the most ecological solution, if, for example, it seems too costly. The last type is a prosaic consumer who will have more conventional and straight-forward motivations. They will choose a sustainable product out of a spirit of contradiction, fed by a skepticism towards agents who are not committed to the planet. However, they will wait for these agents to evolve before changing their habits themselves.
These trends, as many as there are, accelerate consumers' desire to move to a more sustainable model. But in recent years, one of the most significant accelerating factors leading to this new consumption habit has been the COVID-19 crisis. Acting as a catalyst, the global pandemic succeeded in sensibilizing even the most skeptical of consumers about the importance of sustainability. Indeed, according to the PwC survey carried out after the first wave of confinements, 52% of the people questioned said they were more respectful of the environment than they were six months earlier to the pandemic.
Legislation is a science that evolves at the rhythm of societies. As soon as new social factors and considerations emerge, they end up being codified and legislated sooner or later. Sustainable development, but also the sustainable production and consumption that results from it, will be no exception. In order to put everyone in agreement, the involved governments are quickly forced to clarify the following questions:
- What are the pillars, main principles, and objectives of sustainable development?
- How can we contribute to creating more sustainable projects, processes, and products?
- Or how can sustainable development be better implemented within our industry?
In 1992, during the Earth Summit in Rio, the represented governments finally decided to formalize the notion of sustainable development around three main pillars: the economy, ecology, and social issues.
A multitude of agreements followed, aiming to regulate and establish a global and sustainable transition, such as the Paris Agreements, in 2015, which legally bound the 194 signatory States to act against climate change.
In that sense, sustainable design creates value mainly due to the fact that it results from a growing consumer desire to move towards a more ethical and responsible model which respects the environment. It is that need for sustainable products which is pushing legislation to exponentially evolve and professionally constain the market.
According to researcher Randi Kronthal-Sacco, working at the NYU Stern Center for Sustainable Business in New York, it is clear that brand managers who do not pursue sustainable development strategies in the coming years will be increasingly left behind. Indeed, these global commitments to sustainable development are later adapted at a national level more or less strictly depending on the country. And yet, it would be unthinkable today for a company to ignore the sustainable dimension of its production, especially if the goal is to sell on international markets.
Brands no longer have a choice, they must move towards a more sustainable production not only to meet consumer demand, but also to respect the laws put in place by the countries or governments. If legislation acts as a real booster for brands which develop sustainable products, it can be a considerable hindrance for those that do not take it into account.
In the former case, sustainable and regulatory brands will obtain qualifications and distinctions that will bring them to the forefront of the market, ahead of their competitors. By having eco-responsible labels, reparability signs, or "made in" certifications, they will benefit from a substantial marketing advantage. The most committed brands will even have the possibility to win prizes, distributed by public or private agents, rewarding their efforts. Examples include the Cradle to cradle certification or the Green Product Award. These awards also provide advantageous publicity, visibility, and notrierity, and are sometimes even complemented with enticing financial support.
In the latter case, the brands that are most reluctant to make the changes will slowly but surely find themselves at a great disadvantage. On an international scale, a production that does not respect the environment or is negligent with regard to sustainable development will have to pay various taxes depending on the legislation of the country of export. On a national scale, each country defines its own rules, but many have introduced taxes to fight against global warming, such as the famous carbon tax. According to figures from The Institute for Climate Economics, 44 countries and 31 provinces or cities were implementing a carbon pricing system in 2020, through a carbon tax and/or an emissions trading scheme. Among these countries is Canada. Legislation is also evolving on the regulation of packaging, which could also be taxed in the foreseeable future.
In one of its articles published in 2020, Forbes magazine noted a significant increase in the investments made by brands in sustainable development. From large technology companies, such as Apple, Dell, Amazon or Google, to other large consumer product companies, all are committed to evolving their model and are getting more than encouraging returns in terms of CX and brand loyalty.
In fact, according to researcher Randi Kronthal-Sacco of the NYU Stern Center for Sustainable Business in New York, sustainably designed products have become a real success in the market in recent years. The study shows that the share of the market given to sustainable products in 2019 was about 16%, which was already a significant increase compared to previous years. However, even more encouraging is the sustainable products’ market share which was measured to have generated nearly 55% of the growth of consumer goods (CPG), between 2015 and 2019. Their research further explains that, contrary to common belief, the COVID-19 pandemic had not slowed down the marketing of durable goods. In fact, the study showed that it had even increased during that period.
Nevertheless, the question remains: are sustainable investments profitable ?
More often than not, what holds a brand back from switching to sustainable production is more a question of cost than a question of will. Companies often question themselves if sustainability-driven business can be profitable. For smaller companies to which investing in sustainability represents a financial risk, some brands are still perplexed as to the interest for the validity for them to change their model. Some wonder if it would not be easier to pay the taxes, rather than reinventing themselves.
However, according to the digital company Business.com, which specializes in performance marketing, small businesses also have a growing interest in green marketing. Although the results may be difficult to assess in the short term, success and profitability are still achievable with sustainable production, provided they take it one step at a time. The idea is not to transform the model all at once, but to do it gradually. In fact, multiple small-scale and low-risk initiatives can be implemented, such as starting to include recycling or repurposing waste materials in the production, and so on.
Therefore, sustainable design sells because sustainable production is reliable, because it has been growing steadily in recent years, and also because it has been proven to be profitable for companies, whatever their size.
However, one must be wary not to fall into the trap of greenwashing - a practice consisting in overselling its eco-responsible image to consumers. Companies who use this misleading strategy find themselves with counterproductive results since loyal customers label it as false advertising, and are found disappointed and frustrated. It jeopardizes the brand’s credibility, thus affecting its perceived value, and ultimately threatens the long-term survival of the company.
How to avoid falling into the trap of greenwashing?
The best way to fight greenwashing is to be honest and transparent with consumers. This can be done by clearly putting forward the product's strengths in terms of sustainability, and thus without hiding its weaknesses. After all, if the product faults are too extensive to the point of affecting its sales, it may be time for the company to make changes on a higher level.
In this process, it is sometimes useful to call upon external professionals who are more experienced in the processes involved in the conception and production of sustainable products. These experts can help the company to optimize its conception, production, and marketing, without falling into greenwashing. For this purpose, a company can request, for example, the services of an industrial design studio.
Hence, sustainable design creates value because it is the best marketing argument available - as long as companies do not abuse its use. Therefore, when in doubt, it is better to call on the services of sustainable design experts.
And yet, despite the obvious evolution of brands in terms of sustainability and the multiplication of sustainable concepts and products on the market, consumers expect more. Greenwashing has made them increasingly skeptical about the origin of the products they consume. Consumers find themselves more often than not needing to regain confidence in the brands they love and consume. This is why the sustainable market is evolving at this very moment and will continue to in the coming years.
This perspective allows the emergence of new economic models such as the circular economy. Circular products, resulting from this system, are registered in a cycle from which they never leave except to be recycled or transformed at their end-of-life. The objective is to produce while limiting the production and accumulation of waste which overflow our landfills. Circular production is meant to be ethical, inclusive, and goes much further in terms of sustainability than a classic linear economic process. Proven to be very promising in terms of sustainable performance, this approach is already adopted by the biggest industry leaders such as the Phillips Group for example, which discussed their circular transition.
To conclude, sustainable design creates value because the market for sustainable products is ever-evolving with new ideologies, paradigms, and perspectives as modern society’s lifestyles and habits are changing. Today, sustainable design can be considered an inherent part of a circular economy model.