Sustainable innovation: Staying true to your brand promise

Two years ago, the Best Global Brands magazine published an article titled “Sustainability and its impact in brand value.” The core idea was that sustainability (however we define it) influences brand value in three different ways:

1. Sustainability creates new sources of revenue. Sales generated through innovative products and services which are built around the idea of sustainability, such as hybrid cars (Honda and Toyota) and detergents that wash at lower temperatures, saving energy (Ariel 300).

2. Sustainability positively influences customers’ choices. A brand that is associated with sustainability equities can create a halo around its products and services, making customers more willing to choose it (Body Shop and GE).

3. Sustainability guarantees the longevity of the business. By adjusting their supply chain, raw materials, processes and disposal of products to the new realities of the planet, companies will adapt their business for the future (Coca-Cola, Nokia).

Two years on and these ideas have proven true – not only to sustain brand value in the aftermath of one of the worst recessions since The Great Depression, but also to help smaller or regional companies raise their profiles on the global stage. But we’ve also seen that when these principles are not consistent with the business strategy and values, they can actually create skepticism around the brand or simply distract the business from its core purpose, negatively influencing brand value.

Sustainable brands in fast-developing markets

Large companies from fast-developing markets have traditionally invested in social and environmental projects. This is because issues like lack of clean water and environmental deterioration are all too apparent in these regions. Solutions come in various forms, such as building basic infrastructure in the communities where the business is based, setting up a foundation or developing innovative products that not only bring new money to the company, but also improve the lives of people involved with them – either as consumers or suppliers.

Most Brazilians would agree that Natura, the native cosmetics, fragrances and personal care brand, is a great example of a fast-developing market brand that invests in corporate citizenship initiatives. It has had a presence in the domestic market for over 40 years, delivering great products, consistent profitability and strong social and environmental consciousness. It uses sustainability as an innovation trigger. Its EKOS line, which honors the Brazilian biodiversity by using ingredients produced by less privileged communities in Brazil, illustrates this approach. Natura is also heavily involved with programs that celebrate nature and entrepreneurship to promote social transformation, starting with its own sales force. Valued at R$ 4,652 (US$ 2,629) by Interbrand, Natura is now the sixth most valuable brand in Brazil and has been exporting its successful and sustainable brands to Latin America and Europe.

To read the entire article, click here to download the PDF. 

Contributors

Executive Director, Consulting