Consumer demand is increasingly putting pressure on business-to-consumer (B2C) companies to practice responsible business by doing better by the environment. But why is this same pressure not applied to business-to-business (B2B), software-as-a-service (SaaS) and other business service providers? And what could be achieved if it was?
The future of the planet can sometimes seem very bleak. We’re facing more wildfires, floods, storms, drought, and water shortages due to climate change, but there’s also plastic and environmental pollution, food security issues, deep social injustice and inequality, and countless more problems to tackle. They’re not only top of the news, but top of the mind as well.
Over the past few years, sustainability concerns are proving to have an impact at the till. In April, Business Insider reported that a good product is no longer enough to win a consumer’s favour. “Shoppers want more than just quality,” reporter Remi Rosmarin wrote, “often looking for products and brands that align with their personal values.” They’re also willing to pay a premium for it over a non-sustainable competitor’s brand.
And it’s not just about organising an annual feel-good beach clean-up or switching promotions from mailouts to emails. Consumers are demanding real dialogue and action on the hard stuff: carbon emissions and climate change.
None of this is new; any self-respecting B2C business should be ensuring it can walk the talk on sustainability by now. But much of the focus and pressure has been on businesses selling products and services directly to the general public. It’s just as important for B2B and SaaS companies to focus on sustainability as well.
Voting with their wallets
Recently, London brand consultancy Wolff Olins and ethical insights platform CitizenMe partnered up to talk to 7000 people in five global markets. They found that people want fundamental change in the world, and they want businesses to drive it, ahead of governments and other traditional sources of regulatory power. (Read more about this research at the link here .)
“More recently, we’ve investigated this further,” global chief executive Sairah Ashman wrote for UK business magazine Campaign last year.
“We asked people exactly what’s needed to drive the change they seek. The standout finding is that businesses must push to do things differently. Completely differently. Only 6% of consumers want businesses to continue as they are, using established methods.
“Everyone else, regardless of age, seniority, geography and gender, wants them to push the boundaries.”
This is not only socially responsible, but it’s smart business to follow your customers’ lead. Ashman says their research showed that people wanted businesses to actively help them make more conscientious purchase decisions and also to demonstrate “forthright ethics”.
When consumers unite in their preferences, it can be a huge driver for global change. In 2015, Nielsen polled 30,000 consumers in 60 countries around the world and found one overwhelming conclusion in their final report. Across the board, consumers are willing to pay extra for one thing: sustainability. They found this was especially true for millennials, those born between 1977 and 1995. While 66 percent of global consumers are willing to pay more for sustainable goods, 73 percent of millennials are.
Now approaching their mid-40s, the oldest of that cohort are beginning to move into positions of power in their workplaces, where they may bring that same concern to business spending.
B2B companies should get onboard
Many B2C companies are focusing on how they can do more good in the world and create less waste, pollution, or negative social impacts in their operations. But they’re often looking downstream at their customers, from where the pressure is coming – not upstream to their suppliers.
By buying product and service from B2B and SaaS companies, B2C businesses are customers too. They have an important role to play here because their purchase dollar has power on behalf of their customers, and they can demand that the businesses from which they buy products, service or software transparently and actively care about environmental and social values.
B2C companies can force change upstream by choosing service providers and suppliers that meet their environmental and social standards. This has benefits beyond helping the planet and feeling good. If you’ve noticed your competitors aren’t leading the charge in this way, it’s a valuable way to make change and stand out from the crowd. It will also reassure customers that your business is doing everything it can to fight its share of the environmental battle on their behalf.
We’re walking the talk
At Flux, we’re working to become carboNZero certified in New Zealand, which means reducing our emissions and offsetting those that we can’t. Although there is little economic incentive to do this, we recognise that it is simply the right thing to do. Some carboNZero partners are looking to improve the certification process by reviewing a company’s entire supply chain and service provider network; analysing the businesses that a company partners with alongside their own practice. We applaud this change and would encourage all companies to take account of the environmental and social values of a service provider as part of the standard consideration process.
Since shifting to a remote-first operational structure in March 2020, we’ve reduced our collective CO2 emissions from commuting by 76%. In terms of product development, we’re focused on enabling energy retailers to capitalise on future energy technology that benefits the environment, such as renewable Distributed Energy Resources. And we’ve resourced and prioritised working groups to help tackle social and environmental energy challenges as we grow, working with local and international community groups.
Ultimately, no business is an island. Each one benefits from the health of the community of which they’re a part. Consumers and companies alike should be demanding all businesses – whether B2C or B2B – have an active and demonstrable social and environmental conscience. That helps the planet, but also the bottom line.