Tag Archives: sustainable business

Sustainable business?

I work in a research institution, where sustainability is an important overarching theme in research. Consequently sustainability comes up in water cooler discussions quite regularly. One occasionally revisited topic or a problem is that why don’t more people shop more sustainably, i.e. why doesn’t sustainability sell?

One answer to this question came to me when I recently bought a bottle of ‘sustainable’ biodegradable dish soap that was on sale, i.e. the same price as ‘normal’ detergent. The first impression was after the usual dose that the stuff doesn’t clean anything. I ended up using multiple times more of the biodegradable formula than regular detergent to get grease off the dishes. I ended up wondering exactly how sustainable it is to use an ounce of the detergent when a few drops used to do. The definite conclusion was that I certainly weren’t getting anywhere near the value for my money. When I remarked on this in facebook, a friend of mine replied that, even after thinking about it, he couldn’t come up with one product being marketed as sustainable of environmentally friendly that was any good. It seems almost as though manufacturers or product managers are either focused on performance and value for money, or sustainability, whatever it means.

And here exactly is the problem. There is a distinct impression in many products, including the dish soap I bought, that they are clearly marketed and designed for sustainability, performance or value for money were far from the top of the list of qualities that were considered when evaluating the product during development. In fact for many products it seems that the main selling argument is ‘sustainability’ or ‘eco-friendliness’, other specifications and attributes be damned. While I don’t doubt that there is a number of consumers who will value sustainability in its many forms over other product attributes, I’m willing to hazard an educated guess that the main stream of consumers in fact don’t. On the contrary, I believe the issue is that the existing products work just fine, and moving to a new product is a risk that, however small, may seem not worth taking if there is no clear incentive. It’s widely held in innovation management literature, before sustainability, that value for money, i.e. perceived price/performance -ratio is the deciding factor in adopting new products or technologies. Patri Friedman put it sublimely concisely “incentives work, even if you don’t believe in them.”

One could argue that sustainability an sich is an important value proposition, but there is little that I’ve seen to support that. Otherwise people would shop more biodynamic food and drive small diesels with filtered deep frier fat for fuel. Even in Denmark, arguably one of the most sustainably conscious countries in the world, it’s industrial chicken and pork, and just about the only thing keeping people from driving large powerful cars is lack of parking space and vehicle taxation. Even further, performance of the product has to be on some acceptable, satisficing, level of performance for the sustainability-oriented consumer.

It seems that the problem becomes, not why don’t people shop sustainably, but what can we do to incentivize people to transition towards sustainabilty? The answer is: better products. One of the premium examples of sustainable products that are good I can come up with, are biodegradable bicycle cleaners and lubrication products. The one’s I’ve tried are reasonably priced, although more expensive that the cheapest petroleum-based products, but what is more important they’re actually better! Pine-oil based degreasers are safer to use, clean better and you don’t have to take special measures to dispose of them after use. Bio-degradable chain lubes that I’ve tried work better and longer in adverse conditions than the regular petroleum-based ones I’ve tried. And they’re sustainable, so it’s a win-win – paying some extra isn’t such a chore all of a sudden.

The lesson here is plain and simple: if you match or preferably exceed the performance of incumbent substitute products in the same price bracket with your sustainable product, people will buy. I will dare say that for the majority of consumers sustainability, whatever it means, is not a sales argument that alone will excuse performance and value for money, nor does it need to be. However, sustainability can be the part of a value proposition that will stand out tip the buyer over to choosing to your product over similarly performing substitutes.