Millennials may save the planet
In less than a decade, 75 per cent of the global workforce will be millennials - the generation born between 1982 and 2000, who may turn out to be our environmental and social saviours.
The fact that millennials are a powerful force in driving sustainability was a highlight at the recent Sustainable Brands conference in Sydney which I attended.
The data shows millennials, while also tagged ‘‘selfieobsessed’’, ‘‘entitled’’ and ‘‘selfindulgent’’, are significantly more engaged with sustainability and social justice than previous generations.
This is not surprising given they’re generally highly educated, they’ve had strong awareness of social and environmental issues from an early age and have the shadow of climate change bearing down on their futures.
They’re also more financially disadvantaged than previous generations, carrying student debt and facing real challenges affording a home.
A Deloitte global study identifies they are also hugely ambitious and seek purpose in life beyond money. So, that influences the brands they choose to purchase and the brands they work for.
Social media has also given millennials a voice which has become a force for good.
Purpose businesses are coming to life in the United States. An early pioneer is globally successful Patagonia, the outdoor clothing company started by a team of young outdoor enthusiasts who wanted to ‘‘build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis’’.
In New Zealand, we have a few trailblazers such as Eco-store and Z Energy, showing us how prioritising purpose leads to growth.
According to the HBR 2015 Business Case Purpose Survey, during the Global Financial Crisis, purpose businesses continued to grow. The 2015 Imperative and NYU Workforce Index shows purpose also increases employee productivity, engagement and loyalty.
They have 20 per cent higher retention rates than non-purpose firms, workers 50 per cent more likely to be in top positions and 47 per cent higher net promoters of brand.
Purpose-driven businesses also connect better with their customers. Take Dutch company, MUD Jeans, which targets consumers through organic certified cotton jeans and empowers them to participate in recycling by offering its Lease a Jeans concept.
This is an exemplar of the ‘‘circular economy’’: it decouples growth from natural resources and turns the focus to generating revenue from waste and innovative, customer-focused products and services.
In New Zealand, businesses find a dilemma in all of this. Consumers (including millennials) tell us through surveys that they care, and that they will pay more for sustainable products and services. But their actions tell a different story.
And what we learn is that consumers don’t want to sacrifice functionality to make a sustainable choice and many can’t afford to pay more for the sustainable option.
Conscious consumption is not yet part of the social fibre in New Zealand, partly because we still don’t see the negative impacts of our consumption behaviours and because making sustainable choices is complicated.
However, consumer demand for genuinely sustainable brands is soaring and driving growth. In the US for example, organic beef represents just 0.4 per cent of the retail beef market, but from 2011-2014 retail growth exceeded 300 per cent, with suppliers unable to meet continued soaring demand, according to market research company IRI.
Suffice it to say, our hyperconnected, media savvy and always-on consumers living in a challenging world are demanding better from their brands. Any business that doesn’t engage is vulnerable to being left behind.
Purpose businesses are coming to life in the United States.