Monthly Archives: August 2016

Why The Customers Will Pay More for Sustainable Products

The good news for companies that make sustainable products is that consumers say they are willing to pay more for products that have less of an impact on the environment. The catch, however, is that they’re willing to pay more only if you’re doing a good job communicating to your customers why your products are different.

That’s the finding of research from the University of Missouri, which focused exclusively on the apparel industry. The study found that consumers are willing to support apparel companies that employ sustainable and ethical practices, but those businesses have to prove it.

In fact, consumers say they would be willing to pay 15 to 20 percent more for such products. However, they are also likely to remain skeptical about apparel companies’ claims of sustainability unless companies are willing to confirm that sustainability .

Gargi Bhaduri, a doctoral student, who conducted the research with Jung Ha-Brookshire, an assistant professor of textile and apparel management, said the research has implications for all sorts of industries.

For all businesses, it’s important to be open about how you create products.

“To solve this issue, consumers seem to demand a universal standard authorizing agency to verify the claims of the businesses with transparent practices,” Bhaduri said.

Furthermore, it is essential that businesses find a profitable way to make these sustainable goods before they start using their sustainable practices as a marketing message, she said.

“It must be economically sustainable first,” she told BusinessNewsDaily. “Then they can be transparent and sustainable. Only then can they reach their goal.”

The researchers found that consumer skepticism of corporate transparency stems from the suspicion that sustainability claims are falsified or exaggerated by apparel companies as marketing ploys.

They found that consumers want information regarding product sustainability to be available conveniently. The researchers suggest the use of hangtags, care labels, and point-of-purchase tags with clear information about their sustainable business practices so consumers can make an educated purchase decision.

Green Building as an Economic Development Tool

From improving energy efficiency to mitigating the impacts of climate change, businesses have been working to meet the demand of a marketplace that’s ever-more ecologically conscious. One industry in which this shift has been markedly noticeable is construction, where companies have turned to new, more efficient techniques.

“In major markets now, conventional construction doesn’t really exist,” Nathan Taft, director of acquisitions for green builder Jonathan Rose Companies, told Business News Daily. “We’ve seen a real shift in the industry, getting a push from government mandate to push people along on the learning curve. People are just realizing that green building makes sense.”

Sustainable building involves an analytical, data-driven approach to various renovations, including installing insulation, updating lighting to LED fixtures, and diagnosing heating and boiler systems. This approach helps companies identify the most wasteful aspects of a given structure and determine how to best address that waste.

Sustainable building is not just about renovations. New construction is also a key element, with the designs constructed from the ground up to accommodate both environmental sustainability and human needs.

“We position buildings from a holistic standpoint to enhance efficiency, as well as tenant and resident experience,” Taft said. “Energy retrofits are often combined with creating a new community space. … We’re always integrating green from the very beginning, not just tacking it on at the end. It’s really what the building is about from its first inception.”

Some view sustainable construction as a vehicle to spur further economic development, particularly in communities that are typically seen as disadvantaged when it comes to attracting businesses. The U.S. Green Building Council (GBC) maintains this philosophy as part of its work to spread green building practices throughout the world.

By promoting its Leadership in Energy and Environmental Design (LEED) certification standards, the U.S. GBC encourages building designs that use less water and energy, reduce overall carbon emissions, and save money. The group might focus on buildings, but the effort is intended to have a ripple effect throughout the economy of entire communities and, ideally, the world, said Mahesh Ramanujam, chief operating officer of the U.S. GBC.

“When we look at the buildings-to-communities-to-cities mission, it’s no longer just a green building but it’s also an economic development tool,” Ramanujam said. “Being able to establish this from an environmental lens [and] economic lens, and most importantly [resolving] the income inequality gap … makes it attractive for businesses to come and invest in and grow the market.

“Our mission is about fundamental behavioral change in the marketplace, for [people] to understand sustainability principles in everything they do, in life cycles of consumers and businesses,” he added. “We want sustainability to be embedded in [the] life of the consumer, so that everything you touch, be it clothing, be it eating habits and hobbies, reflects the principles of environmental and human sustainability.”

Ramanujam said he believes green construction can affect every other industry, from health care spaces to retail. Not only will operating in a green building save these companies money, but it will also help themproject a sense of corporate social responsibility, which is increasingly important to consumers, according to a Nielsen report issued in October 2015. The report found that 66 percent of consumers said they were willing to pay more for sustainable brands.

“Consumer brands that haven’t embraced sustainability are at risk on many fronts,” Carol Gstalder, senior vice president of reputation and public relations solutions for Nielsen, said in the report. “Social responsibility is a critical part of proactive reputation management, and companies with strong reputations outperform others when it comes to attracting top talent, investors, community partners and, most [importantly], consumers.”

You a True Leader, or Just a Boss

How do you know if you’re a good boss and, more importantly, a good leader? The two roles aren’t mutually exclusive, but the best bosses are actually leaders first.

“When the boss is a true leader, the fact that he or she is the boss might be a side note,” said Charles A. Mohler, president and founder of Eagle CFO Consulting. “People often see a boss as getting things accomplished through rewards or punishment or consequences, while they see a leader as using mentorship and encouragement, trying to teach and train and motivate.”

“A leader runs with their team and empowers them with a shared vision and strong values in which everyone enrolls and excels,” added Jennifer Borba Von Stauffenberg, founder of Olive PR Solutions. “A boss can mean the same thing if the boss in question holds these values.”

According to the Great Boss Assessment survey by S. Chris Edmonds, founder and CEO of The Purposeful Culture Group, only 45 percent of survey respondents say their boss inspires their best efforts each day. Fifty-eight percent say their boss treats them with trust and respect daily, which means 42 percent of bosses treat team members with distrust and disrespect.

Experts agree that, when bosses embrace leadership qualities, they’re more likely to inspire their team.

According to Mohler, good leaders have following characteristics:

They have an open-door policy.
They’re willing to work with their staff and their team.
They’re able to share the purpose or the “why” of what’s being accomplished.

To become a better leader, reach out to mentors to get feedback on your strengths and weaknesses, Mohler suggested. This way, you’ll know what you need to improve on and what kind of information you need to seek out.

“From there, read books on leadership and actively participate in the company,” he added. “Don’t wait for someone to give you a title; just jump in and take the lead.”

If you’re still uncertain of your abilities, look to the team you’ve been leading, Borba Von Stauffenberg suggested.