Putting Sustainability at the Heart of CX

This isn’t just about appeasing the eco-conscious consumer; it’s about securing your business’s future.

by Execs In The Know

Imagine stepping into your favorite store or landing on your favorite brand’s website and realizing every product is designed for convenience and crafted with the planet in mind. This isn’t a far-off fantasy — it’s the evolving reality of customer experience (CX) where sustainability takes center stage.

Sustainable CX demands a wholehearted commitment. It involves a comprehensive business transformation that places sustainability at the forefront. To carve out a path and vision for this change, brands must be deeply dedicated to enhancing consumer experiences, have a profound grasp of sustainable development goals, and possess a clear insight into the factors that encourage responsible consumer behavior.

So, how are leading brands putting sustainability at the heart of their CX strategies, and what lessons can leaders learn from their journeys?

Why Sustainability Matters for CX

Sustainability has become critical to customer experience and business strategy for several compelling reasons. First, the growing awareness and concern over environmental issues among consumers mean that people increasingly consider the ecological impact of their purchasing decisions.

Businesses are swiftly adapting to the challenges brought on by climate and social crises, responding to the growing demands for change from investors and the public. Supply chains progressively aim for net-zero goals, and sustainable transformation has emerged as the top priority for global CEOs. The main challenge for companies now is figuring out how to engage their consumers in this transformation journey.

According to a Nielsen report, 73 percent of global consumers say they would definitely or probably change their consumption habits to reduce their environmental impact.¹ This shift in consumer behavior signifies that brands must align their values with those of their customers to build trust and loyalty. Businesses integrating sustainability into their core operations often see enhanced brand reputation and increased customer satisfaction, driving long-term loyalty and growth.

Moreover, sustainability in CX is not just about meeting customer demands; it also offers significant operational benefits. Implementing sustainable practices can lead to cost savings through improved efficiencies and reduced waste. For instance, McKinsey & Company reports that companies adopting sustainable practices can reduce operational costs by up to 60 percent.²

Additionally, these practices can open up new market opportunities and drive innovation as companies seek to develop eco-friendly products and services. In a competitive landscape, this differentiates a brand and appeals to a broader audience, including eco-conscious investors and stakeholders. Therefore, sustainability is a win-win strategy, enhancing CX and business performance.

Is Your Brand Walking the Talk?

Patagonia has long been the poster child for sustainability. It doesn’t just sell products; it sells a philosophy. The brand placed a provocative ad in The New York Times when it launched its “Don’t Buy This Jacket” Black Friday campaign³ in 2011, urging consumers to consider the environmental impact before making a purchase. It was a bold move.

And it paid off in spades, solidifying customer loyalty and trust. Patagonia’s transparency and commitment to environmental ethics set a high bar in an age where consumer trust is hard-won and easily lost.

After its acclaimed 2011 campaign, Patagonia’s 2016 Black Friday initiative pledged to donate all revenues to environmental protection groups, resulting in an impressive $10 million in sales — four times the company’s estimates. Unlike typical campaigns focused on seasons, themes, or new releases, Patagonia’s marketing is dedicated to saving the planet, empowering customers to join a larger-than-life movement with significant impacts on the company’s brand, reputation, and mission.

As Patagonia’s founder Yvon Chouinard states, “I know it sounds crazy, but every time I’ve made a decision that’s best for the planet, I’ve made money.” In a business world driven by growth and profit, Patagonia’s commitment to environmental priorities is a powerful reminder that doing good is indeed good for business.

Subscription-based early learning company Lovevery⁴ is deeply committed to sustainability, driven by the desire to preserve the planet for future generations. In its eighth year, Lovevery has over 350,000 active subscribers, and one of Fast Company’s Most Innovative Companies.

The brand aims to ensure its products have the longest possible life. By 2025, it plans to use 90 percent renewable, bio-based or recycled materials in its products and packaging. It already employs eco-friendly materials like FSC-certified wood, organic cotton, and bio-based plastics. By 2030, Lovevery aims to achieve net zero carbon emissions throughout its supply chain. Its dedication includes working with suppliers to utilize renewable energy and reduce transportation emissions, ensuring every aspect of its operations leaves a minimal carbon footprint.

In addition to its future goals, Lovevery has already made significant strides in sustainability. From January 2019 to February 2022, it offset 13,934 metric tons of carbon, equivalent to the emissions of 3,002 passenger vehicles driven for a year. It has invested in renewable energy like wind power, and uses sustainable materials in its products. As a member of various sustainability initiatives such as the Climate Collaborative and the SME Climate Hub, Lovevery is committed to transparency and continuous improvement in its environmental impact.

Brands prioritizing sustainability can see up to a 10 percent increase in revenue due to enhanced customer experience and loyalty.⁵ Can your brand afford to be this transparent? More mportant, can it afford not to be?

Sustainability Isn’t Just a Trend, It’s a Necessity

Consumers today are not easily fooled by greenwashing. They demand authenticity and tangible action. Dave Pitsch, Vice President of Guest Services at Arc’teryx, recently delivered a compelling keynote address at the Customer Response Summit in Tucson titled, “Shaping the Future of Guest Experience and Circularity.” He highlighted Arc’teryx’s pioneering efforts in sustainability, focusing on its commitment to embedding circularity into its operations. Central to this commitment is the ReBIRD™ platform, which encompasses initiatives in care and repair, resale, and upcycling, all aligned with the brand’s goal to “Leave It Better.”

Pitsch emphasized how Arc’teryx’s dedication to minimizing environmental impact and actively contributing to a more sustainable future resonates deeply with its community and beyond. His presentation also underscored the importance of integrating environmental stewardship into the fabric of customer experience, offering inspirational and actionable insights for leaders in the field.

According to Ogilvy, a whopping 90 percent of global investors are willing to revise their investments if a company lacks a solid Environmental, Social, and Governance (ESG) strategy.⁶

The stakes are high — failing to meet these expectations can lead to reputational damage and financial loss. Are your sustainability efforts robust enough to meet these expectations? If not, it may be time to rethink your approach. This isn’t just about appeasing the eco-conscious consumer; it’s about securing the future viability of your business.

The Role of AI in Sustainable CX

Artificial intelligence (AI) isn’t just about optimizing operations — it’s also about fostering sustainability. At the forefront of this movement is IBM’s AI-driven weather technology, which assists farmers in making eco-conscious decisions. This technology showcases the potential of AI to support sustainable development by enhancing the precision and efficiency of agricultural practices, ultimately leading to more sustainable food production systems.

But AI’s influence extends far beyond agriculture. Businesses across various sectors that leverage AI for sustainability have witnessed significant boosts in operational efficiency and a marked reduction in waste. For instance, predictive analytics can help companies forecast demand more accurately, thereby reducing overproduction and minimizing waste. This technology can also optimize supply chains, ensuring that products are transported in the most efficient and environmentally friendly manner.

Imagine leveraging AI to predict and reduce your carbon footprint. Advanced algorithms can analyze energy usage patterns and recommend adjustments to minimize consumption, leading to substantial cost savings and a reduced environmental impact. Could your next big tech investment also be your greenest one? The potential for AI to drive sustainability initiatives is immense and increasingly accessible.

Moreover, AI is crucial in optimizing supply chains to reduce emissions. By analyzing and streamlining logistics, AI can identify the most efficient routes and modes of transportation, cutting down on fuel usage and greenhouse gas emissions. Additionally, AI-driven systems can enhance energy efficiency within operations by monitoring and controlling energy consumption in real-time, adjusting systems automatically to reduce unnecessary usage.

Another critical aspect is AI’s ability to predict and mitigate the impacts of climate change. For example, AI models can simulate various climate scenarios and their potential effects on business operations, enabling companies to develop more robust and adaptive strategies. These insights are invaluable for businesses aiming to build resilience against climate-related disruptions while maintaining a commitment to sustainability.

The possibilities are vast, and the implications are profound. Leveraging AI responsibly can transform your business into a beacon of sustainability, balancing profitability with positive environmental impact. Integrating AI into your sustainability strategy can enhance your operational efficiency and contribute to a larger global effort to combat climate change and promote sustainable development.

Designing for Inclusivity and Sustainability

A new generation of consumer values inclusivity as much as sustainability. This dual focus can create a powerful brand narrative. In fact, seasonal research from Accenture¹⁰ found that 69 percent of older millennials are more likely to choose one brand over another if that brand demonstrates inclusion and diversity in its promotions and offers, 72 percent in its in-store experience, and 70 percent in its product range.

Are your products and services inclusive and sustainable? If not, what’s holding you back from aligning your brand values with those of your customers? Inclusivity and sustainability are no longer separate pursuits. They are intertwined in the fabric of modern consumer expectations. Ensuring your products and services reflect these values will attract a broader audience and build a deeper connection with your existing customer base.

Making Sustainability Mainstream

Transforming sustainability from a buzzword into a business imperative requires a comprehensive approach. It’s about embedding sustainable practices into every aspect of the customer journey. Ikea’s commitment to sustainability, from solar panels to veggie hot dogs, is a testament to how brands can make eco-friendly choices accessible and desirable. Its focus on inspiring change with affordable, recyclable, and energy-effective product design means consumers choose sustainability daily. What small steps can your brand take to make a big impact?

Brands that integrate sustainability into their core operations enhance their public image and realize significant cost savings and operational efficiencies. This dual benefit of enhancing brand perception while reducing costs makes sustainability a smart business strategy.

The Intention-Action Gap

According to Kantar’s 2020 foundational study on the intention-action gap, 92 percent of people say they want to live a sustainable life, but only 16 percent are actively changing their behaviors.¹¹ Bridging this gap requires brands to make sustainable choices on the path of least resistance. The study also revealed that the most environmentally conscious consumers are worth $382 billion to the Fast Moving Consumer Goods (FMCG) sector and becoming more valuable by the year. This points to sustainable innovation and direct-to-consumer (DTC) communication about your green initiatives being beneficial for both business and the planet.

Could simplifying sustainable options in your product offerings lead to greater customer adoption? Creating convenience around sustainable choices can dramatically shift consumer behavior. You can effectively close the intention-action gap by redesigning your products, packaging, and services to prioritize sustainability without compromising convenience.

It’s Time to Be Brutally Honest

When clothing brand Noah publicly declared, “Noah is not a sustainable company,”¹² it wasn’t admitting defeat — it was calling for a reality check. No brand is 100 percent sustainable, but transparency and honesty can win over skeptical consumers. Brands practicing radical transparency often see an increase in customer trust. Are you ready to be brutally honest about your sustainability challenges and milestones?

Radical transparency involves openly sharing both your achievements and shortcomings in sustainability. This honesty not only builds trust, but encourages collective problem-solving and innovation.

Creating a Sustainable, Inclusive CX Ecosystem

The journey toward sustainable CX is ongoing and demands continuous effort and innovation. It’s about creating value, not just avoiding harm. Brands like Pelacase,¹³ with its biodegradable phone cases, show that it’s possible to innovate sustainably without compromising on quality. Pelacase’s commitment to a waste-free future and the creation of products that are 100 percent biodegradable demonstrates how sustainability can drive product innovation and market differentiation. How can your brand innovate to create meaningful, sustainable experiences?

To truly integrate sustainability into your CX, consider every touch point — from product design to customer service. Each interaction is an opportunity to reinforce your commitment to sustainability and deepen your customer relationships.

Your Next Steps in Sustainable CX

Are you ready to put sustainability at the heart of your CX strategy? The time to act is now. Let’s create a future where business success and environmental responsibility go hand in hand, making sustainable choices the new norm for all. By embracing sustainability as a core value, we can inspire our customers, drive innovation, and ensure a thriving future for our businesses and the planet.

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