Consumers are progressively seeing the value of sustainability.
IBM Institute for Business Values (IBV) released a report this year. According to it, 49 per cent of consumers paid a premium on products and services branded as sustainable in 2022. This is a 59 per cent increase in their findings from just a year before. Three out of five consumers reported that socially-responsible or sustainable products made up at least half of their last purchase.
Beyond consumer demand, sustainable practices can lead to better funding. It can also lead to being better prepared for future legislation and a better brand image, according to Sage’s Georgina Lavers.
There are many benefits to incorporating sustainability into a business. However, making false claims about sustainability can damage one’s reputation and lose customer trust.
So, how do businesses become more sustainable without being accused of greenwashing? One method growing in popularity is certification from an external third party. There are many certifying bodies on the market, so it is important to use the right ones to add value. Though there are many, the three below are well-respected and attainable for businesses of all sizes.
The demand for renewable energy is rising. Deloitte provided a recent analysis demonstrating the large and resilient growth of the renewable market over 2021 and 2022. The report showed that renewables are one of the most competitive energy sources in key areas.
RBC Capital Markets echoes the demand for renewable energy in Canadian markets. They are quick to warn, however, it will be challenging to switch over completely. That is due to fossil fuels being a large part of the Canadian economy. That said, the report highlights the importance of adapting to renewable technology to reach net zero CO2 emissions by 2030.
This presents a complicated problem. The national demand for clean energy is growing, yet the Canadian economy uses fossil fuels. If a business wishes to be powered by renewable energy, how would that be achieved?
One solution is Bullfrog Power, a third-party energy company that purchases renewable electricity to make businesses carbon neutral. Installing solar panels for a business can be expensive and unrealistic, which makes it unattainable for many.
Bullfrog Power claims that by purchasing their electricity, a business’ electricity is green. This is achieved by paying Bullfrog Power to purchase renewable energy for the power grid on a business’ behalf.
A business can work with Bullfrog Power. In doing so, they can say their electricity is certified by an external body to be renewable and carbon neutral. The company is quick to say that they are not a utility. Instead, purchasing electricity in this way directly supplies renewable energy to the power grid. The electricity is purchased at wholesale cost, so it is attainable to businesses of any size.
For businesses ready to take the next step in becoming sustainable, a B Corp certification may be the right call. B Lab, the non-profit company providing the certification, measures and scores a company’s entire social and environmental impact. If the company scores higher than 80, it can be B Corp certified.
The benefits of becoming a B Corp are mainly in marketing to like-minded customers and employees. The B Corp name has become recognized as a leader in sustainability certification, so this may be a good choice.
B Lab does not measure or prioritize any single issue within a social and environmental context when doing assessments. Every company, regardless of size, can be assessed by B Lab. That said, B Lab states their process is thorough. This certification is mainly for businesses that are ready to be assessed in depth.
The first step in becoming a B Corp is to take the B Impact Assessment. The Impact Assessment measures a company’s overall practices on governance, workers, community, the environment and customers. From there, a business must make a legal commitment to be accountable to all stakeholders. This accountability takes different forms depending on the business structure. In all cases, though, the legal accountability is towards “workers, communities, customers, suppliers, and the environment – not just shareholders” according to B Lab.
Finally, a company must sign an agreement with B Lab. This agreement outlines performance standards, transparency guidelines and commitment to the legal requirement.
Some businesses are eager to earn B Corp certification but are not ready yet. It is also possible for small businesses to become pending B Corps.
Sustainability Excellence Associate
Some businesses or professionals see the value of sustainability but feel they lack expertise. The Sustainability Excellence Associate (SEA) certificate from the International Society of Sustainability Professionals (ISSP) may be a good option.
The ISSP offers the SEA certification for individuals who want a solid understanding of the foundations of sustainability. The SEA certificate is not only tailored to entrepreneurs, but professionals of all kinds. Its benefits include having a respected professional credential, marketing and learning about sustainability in business.
The SEA certification requires candidates to pass an exam of 75 multiple-choice questions. The study materials consist of a study guide, more than 300 flashcards and 42 practice questions.
After someone has been SEA-certified, they can pursue the ISSP’s Sustainable Excellence Professional certification if they wish.
Consumers increasingly see the value of sustainable businesses. If a business does not meaningfully incorporate sustainable practices, they may be accused of greenwashing. A recent example is BP’s massive pushback against the fossil fuel giant’s green energy campaign. Another is H&M’s fast fashion greenwashing in a recent lawsuit.
As a business, when it comes to marketing, greenwashing scandals can be worst case scenarios. So, to avoid these scandals, some companies are choosing to certify themselves to earn consumer trust as well as meaningfully lessening their impacts on the environment.