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Green is the New Gold: How Sustainability Elevates Brand Value

From the Heartland Series based on the book – Industry 5.0

Brand value is a difficult concept to put boundaries around. It encompasses a blend of tangible and intangible elements, from financial performance and market share to customer loyalty and perception. At its core, brand value is the culmination of a company’s reputation, the trust it builds with consumers, and the unique promise it delivers. As businesses navigate an increasingly complex and competitive landscape, traditional measures of brand value are evolving.

Today, one of the most significant drivers of brand value is sustainability. Companies that integrate sustainable practices into their operations not only contribute positively to the environment but also enhance their brand’s worth by aligning with the values of conscientious consumers. In this week’s article, we explore how sustainability is redefining brand value and why it is becoming an essential component of a successful brand strategy.

As a society, we are becoming increasingly aware and concerned about the effects of our choices on the environment, as well as the problems that arise from emitting GHGs (Greenhouse Gases) into our atmosphere. As more consumers realize the power they have in shaping what types of businesses thrive, they’re demanding that companies take responsibility for their impact on the planet. But before we tie the two together, let’s look at the importance of brand equity and its relation to brand value.

What is Brand Equity?

Brand equity is a term that was first introduced by marketing professionals in the 1980s and sometimes confused with brand value. It refers to the importance of a brand name, and how much more consumers are willing to pay for a particular product or service. Brand equity can also be thought of as the intangible value that the brand’s perception holds in the consumers’ minds.

It refers to a value premium that a company generates from a product with a recognizable name when compared to a more generic equivalent. Companies can create brand equity for their products by making them memorable, easily recognizable, and superior in quality and reliability. Mass marketing campaigns also help to create brand equity, but it’s more of a relationship with the consumer that creates the higher equity. Good examples are Apple, Harley-Davidson, and Red Bull. Think about each and their customer bases. A good rule of thumb is that if customers tattoo the logo on themselves, brand equity is most likely very high!

Higher brand equity commands a higher price, more consumer loyalty (to the point of evangelism) and leads us on the path to building higher brand value. Think of off-brands and how they compete – it’s almost always on price. Companies with high brand equity don’t compete on price, they operate on a much higher level than that. Ultimately, competing on price is a race to the bottom.

When a company has positive brand equity, customers willingly pay that higher price for its products, even though they could get the same thing from a competitor for less. Customers, in effect, pay a price premium to do business with a firm they know and admire. Because the company with brand equity does not incur a higher expense than its competitors to produce the product and bring it to market, the difference in price goes to their margin. The firm’s brand equity (what the consumer thinks) enables it to command higher brand value (the price that consumers are willing to pay), hence why it is so important.

Think of a few examples of widely known brands such as Apple, Google and Nike. Each of these is a well-known brand, but it goes beyond just recognition and equity in the consumer’s minds. These brands stand for something, and that alignment with the customer is valuable – very valuable! For example, Apple’s brand value is estimated at $880 B. That’s not hard assets, or quantified purchase orders, or even real estate. That is solely the value of Apple’s brand name!

Since “Brand” is a significant asset to the company, it has the power to maintain their customer base, attract new customers, and increase sales. Successful brands cannot sit on their hands once they reach a significant point in the customers’ minds; they need to be protected for them to retain that value. This is why we see the most successful brands continue to promote, advertise, and maintain awareness in the business arena.

Brand is value, brand is trust, and in the business world, brand is everything.

Where Sustainability Fits into Today’s Business Brands

Sustainability is the future of building brand value. The word “sustainable” has been tossed around a lot lately, but it can mean different things to different people. Some consider it energy transformation (renewables vs. fossil), or community involvement (sponsoring a youth league), and others feel it’s elimination of discrimination in the workplace. We believe it’s all the above and more. A great saying is simply – Do things right and do the right things!

Today, a company can be said to be sustainable if it meets these criteria:

●  It is profitable (Doing Well).

●  It creates a healthy environment for its workers, customers, communities, and it uses resources responsibly (Doing Good).

This all means conducting their business without harming the planet, society, or individuals.

How do forward-looking companies achieve this? Well, first by creating a sustainability strategy. A good first action for many businesses is hiring a sustainability champion. Many times, this position is at the director level or higher. Most Fortune 500 companies now boast a Chief Sustainability Officer in their boardroom.

This position is focused on strategies such as:

●  Responsible Energy Use

●  Reduction of Waste and Waste Materials

●  Efficient Shipping and Transportation

●  Community Outreach

●  Diversity and Inclusion

●  Recycling and Resource Use

●  Materials Innovation

The idea of sustainability is often associated with environmentalism or corporate responsibility. However, sustainability goes beyond that and includes social responsibility. Many companies are now building sustainability into their mission statements and publicly reporting on things like ESG mandates/efforts.

Sustainability and Your Brand

Many businesses will face challenges with reaching their sustainability goals, however, the upside will be substantial. From their book, “The Sustainable Business Handbook”, David Grayson, Chris Coulter, and Mark Lee suggest that sustainability needs to be baked into your business strategy and your daily tactics. It’s not simply an annual report from a lone-wolf department, sustainability needs to be integrated into all aspects of your company, and when it’s ingrained into all you do, it becomes your “Brand”!

The authors surmise that “Sustainability must be short term as well as long term, tactical as well as strategic. The business case for sustainability matters because more sustainable companies better anticipate, prioritize, and address emerging risks and opportunities including new standards and regulations, while deep trust reservoirs make them more attractive to suppliers, customers, and partners, improving competitiveness.”.

These total business relationships lead to “deeper engagement, better access to information and enhanced understanding of societal expectations, supporting better strategy and accelerating research and development, innovation and growth.”

In a world where consumers are increasingly making purchasing decisions based on a company’s environmental and social impact, integrating sustainability into your brand strategy is no longer optional—it’s essential. The shift towards sustainable practices not only enhances a company’s brand value by aligning with consumer values but also drives long-term profitability and resilience.

As we move forward, companies that embrace sustainability will find themselves at the forefront of their industries, building stronger connections with their customers and creating a lasting positive impact on the planet. By making sustainability a core part of your brand, you’re not just investing in the future of your business, but also in the future of our world. Green truly is the new gold, and those who recognize this will lead the way in the next era of business innovation and growth.

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