Earth Day 2024: ‘Why Sustainability Matters to CX & EX’, by Clare Muscutt
This year’s Earth Day prompted me to write an article about the 'hot-but-not-yet-well-established' topic of CX and sustainability. I wanted to delve deeper into sustainability, its relationship with customer and employee experience and practical advice on how to cultivate a more eco-friendly, people-focused approach to CX that will benefit your brand, business and the future of people and our planet.
What is Sustainability?
The idea of sustainability is often broken down into three pillars: economic, environmental, and social—also known informally as profits, planet, and people.
The concept of "economic sustainability" focuses on conserving the natural resources that provide physical inputs for economic production, including both renewable and exhaustible inputs.
The concept of "environmental sustainability" adds greater emphasis on the life support systems, such as the atmosphere or soil, that must be maintained for economic production or human life to exist.
In contrast, social sustainability focuses on the human effects of economic systems, and the category includes attempts to eradicate poverty and hunger, as well as to combat inequality.
Businesses usually package these up into what are known as environmental, social, and governance (ESG) initiatives.
Jumping on the Bandwagon
Many companies have been caught out recently for jumping on the sustainability brand-bandwagon by making unsubstantiated claims that have resulted in brand damage. This is a dangerous marketing strategy known as 'Greenwashing'.
Etihad was called out by the ASA last year after a promise the watchdog made in September 2021 to crack down on unsubstantiated or misleading green claims by firms. There are more notable examples:
Unilever's Persil detergent 'kinder to the planet' ads were banned after the ASA found their claims on lower temperature washes were unsubstantiated.
Adverts for drinks firm Innocent were been banned after the advertising regulator ruled they "misled" customers over the firm's environmental impact.
Other brands that have faced ASA bans over climate claims in recent years include Ryanair, HSBC, Shell and Landrover.
Last year, the ASA banned an ad campaign by the German airline Lufthansa, which claimed that its green initiatives were protecting the world.
In 2022, the ASA banned ad campaigns on the grounds of misleading environmental or green claims by companies, including the alt-milk brand Oatly who claimed that following a vegan diet would reduce a person’s environmental impact more than cutting down their flights, buying an electric car, or purchasing sustainable meat and dairy.
Similarly, the Pepsi-owned tea brand Lipton and Aquapura Water both claimed to be 100% recycled when products included caps and labels that were not made from recycled products.
Not to mention the number of companies whose practices have resulted in brand damage from exploiting factory workers in developing countries or whose investors have been found to be backing companies linked to deforestation and modern slavery.
You can dive a little deeper into the organisations having the biggest positive and negative impact on the world here.
What is Greenwashing?
Greenwashing is when a company pretends to be eco-friendly despite using toxic ingredients and unsustainable practices to manufacture their products.
When a company engages in greenwashing, they effectively influence consumers to believe that they’re working towards saving the environment when they’re not. In fact, companies that go to great lengths to create a greenwashed marketing strategy are sometimes covering up their lack of environmentally friendly products or processes. They are interested only in improving their sales and making more money, and they do so by projecting a green image and deceiving conscious consumers.
Is Sustainability Important to Consumers?
In today's environmentally conscious world, many consumers are actively searching for businesses that genuinely prioritise sustainability. But does this consumer 'need' translate to sales?
As a research-focused and data-informed CX leaders, we know the gap between self-reported behavioural intention and actual behaviour can often be stark. In terms of sustainability, this behaviour is known as the 'Green Gap'. This presents businesses with a challenge about the value of 'doing the right thing'.
“55% of consumers say they still base their purchasing decisions on convenience and cost over sustainability and environmental impact.”
For example: A recent study by NielsenIQ found that 78 percent of consumers say that a sustainable lifestyle is important to them. Yet many business executives report that one challenge to their companies’ ESG initiatives is the inability to generate sufficient consumer demand for these products. There are many stories of companies launching new products and services incorporating ESG-related claims only to find that sales fell short of expectations.
When consumers are asked if they care about buying environmentally and ethically sustainable products, they overwhelmingly answer yes: in a 2020 McKinsey consumer sentiment survey, more than 60 percent of respondents said they’d pay more for a product with sustainable packaging. But interestingly, last year, McKinsey and NielsenIQ undertook an extensive study seeking to further answer these and other questions on consumer behaviour. They looked beyond the self-reported intentions of consumers and examined their actual spending behaviour—tracking dollars instead of sentiment. The result, for CPG companies, is a fact-based case for bringing environmentally and socially responsible products and services to market as part of overall ESG strategies and commitments. Creating such products turns out to be not just a moral imperative but also a solid business decision.
Importantly, whilst sustainability is increasingly important to customers, 55% of consumers say they still base their purchasing decisions on convenience and cost over sustainability and environmental impact, according to a PFS report. The important question to ask is how to quantify the value for customers for the 45%.
Case Study Example:
One success story on closing the 'Green Gap' and the role that sustainability plays in generating a stronger emotional response and deeper engagement from new and current customers comes from Adidas X Parley shoes. Their shoes are produced from the equivalent of 11 plastic bottles collected from the Indian Ocean and Caribbean Sea. The shoes were first produced in 2015 and by 2020, Adidas had sold in excess of 30 million shoes at around £170 per pair. Conscious customers saw that Adidas were able to produce high-quality shoes that were also having a positive, sustainable impact through their more sustainable product design and were willing to pay the difference in price for a product that better aligned with their values.
The Opportunity for Customer and Employee Experience
With stats like those, you can understand why there is motivation for marketing teams to greenwash. It's important to recognise that there is a difference between talking about sustainability and taking action on climate change and social issues. In customer and employee experience, we have the opportunity to provide genuine proof points of ESG strategies that people can see, feel and directly experience that can not only have a positive impact on people and the planet but also profitability. This holy grail is known as the triple bottom line.
What is the Triple Bottom Line?
Historically, businesses operated in service solely to their financial bottom line. In 1994, author and entrepreneur John Elkington introduced the concept of the triple bottom line (TBL) with hopes of transforming the financial accounting-focused business system to a comprehensive approach that measures impact and success. As a result of the triple bottom line theory and application, some businesses began to recognise the connection between environmental health, social well-being, and an organisation’s financial success and resilience. To get an accurate perspective of their operations beyond what is reflected in their profit and loss statements, organisations must fully account for all costs associated with doing business.
People consider all stakeholders (versus solely shareholders), including employees, communities within which an organisation operates, individuals throughout the supply chain, future generations, and customers—just to name a few.
The connection with corporate social responsibility (CSR) is central to this segment of the triple bottom line. CSR is defined as a responsibility among organisations to meet the needs of their stakeholders and a responsibility among stakeholders to hold organisations accountable for their actions.
A few initiatives that an organisation may consider as part of its CSR goals include: advancing human rights; ending poverty and hunger; diversity, equity and inclusion; gender equity; ensuring a healthy and safe work environment; and community engagement and volunteerism. Not only are CSR initiatives beneficial for stakeholders, but an organization integrating CSR into their business strategy is also good for business.
This article on the negative social impact companies have on their own customers and employees will help make sense of the connection between CX and EX.
Planet considers the relationship between an organisation or business and the natural environment and its ecological systems.
“Public opinion, consumer purchasing power, the speed and transparency of information sharing via social media, and even industry-led activism has made it easier for stakeholders to hold organisations accountable for their actions.”
Public opinion, consumer purchasing power, the speed and transparency of information sharing via social media, and even industry-led activism (for example, Patagonia 1 percent for the Planet) have made it easier for stakeholders to hold organisations accountable for their actions. This is seen in stakeholders rewarding an organisation’s positive impacts and reprimanding the negative. When that sentiment gains public attention, chances are high that it will impact who consumers buy from and who they ultimately support. Stakeholders are increasingly aware of not only the consequences business activity can have on the environment, community, and economy, but also of the importance of global issues, such as climate change and social justice. In fact, a 2020 Climate Change in the American Mind survey shows that “Nearly six in 10 (roughly 58 percent) of Americans are now either ‘Alarmed’ or ‘Concerned’ about global warming. From 2014 to 2019, the proportion of ‘Alarmed’ nearly tripled.”
Over the past several decades, businesses have increasingly adopted practices that help minimize environmental impact. More recently, large organisations like AT&T, DELL, EASTON, Hewlett Packard, Kohler Co., Levi Strauss & Co., and Target, to name a few, have taken a step further down the sustainability path by creating a net-positive or regenerative impact on the environment and society.
Prosperity considers the economic indicators over which an organisation or business has influence—for example, paying livable wages, ethical sourcing, and workplace health and safety.
Triple bottom line theory is systemic in nature through its view of people, planet, and prosperity. With this connectivity in mind, the United Nations (UN) created Sustainable Development Goals (SDGs) that “ensure all human beings can enjoy prosperous and fulfilling lives and that economic, social, and technological progress occurs in harmony with nature.” Many of the UN SDGs aim to improve a wide range of areas related to environment, people, and economic opportunities. One of the many prosperity-focused goals aims to provide decent work (safe working conditions, living wages, compassionate leadership) and economic growth for those in specific communities.
Examples from the UN’s SDGs of how businesses can help support the prosperity of their stakeholders include:
By 2025, take immediate and effective measures to eradicate forced labour and end modern slavery and human trafficking. Additionally, prohibit and eliminate all forms of child labour, including recruitment and use of child soldiers.
By 2030, devise and implement policies to promote sustainable tourism that creates jobs and promotes local culture and products.
Some companies, like Kohler Co. have taken a systemic approach to integrating prosperity into their business:
“As a global company, we understand that how we do business impacts the communities in which we live and work… We believe that in order to grow our business responsibly, we must have programs in place that positively impact the environment and society at scale.” —Laura Kohler, Senior Vice President, Human Resources, Stewardship & Sustainability.
What are Examples of ESG Issues?
To understand the meaning of ESG, a good first step is to identify the issues fit into the categories of environmental, social and governance. Those can include:
Environmental: Preservation of our natural world
Climate change
Carbon emission reduction
Water pollution and water scarcity
Air pollution
Deforestation
Social: Consideration of humans and our interdependencies
Customer success
Data hygiene and security
Diversity, Equity and Inclusion
Community relations
Mental health
Governance: Logistics and defined process for running a business or organization
Board of directors and its makeup
Executive compensation guidelines
Charity contributions and political lobbying
Fair employee compensation
Hiring and onboarding best practices
Is Technology a Greener Solution?
You might be thinking there could be opportunities to incorporate digital solutions into your customer experience to decrease paper consumption and streamline processes. For example, adopt paperless billing and receipts, use digital signage, and provide mobile apps for customer service inquiries.
When I mentioned I was working on this article, Jessica Davis pointed out to me that there are some challenges around the sustainability of digital we need to be aware of. She cited Gerry McGovern's book 'World Wide Waste: How Digital Is Killing Our Planet-and What We Can Do About It'
“Every time an email is downloaded it contributes to global warming. Every tweet, search, check of a webpage creates pollution. Digital is physical. Those data centers are not in the Cloud. They're on land in massive physical buildings packed full of computers hungry for energy. It seems invisible. It seems cheap and free. It's not. Digital costs the Earth”
The stats are mind-blowing:
1.6 billion trees would have to be planted to offset the pollution caused by email spam.
1.5 billion trees would need to be planted to deal with annual e-commerce returns in the US alone.
231 million trees would need to be planted to deal with the pollution caused as a result of the data US citizens consumed in 2019.
16 million trees would need to be planted to offset the pollution caused by the estimated 1.9 trillion yearly searches on Google.
Check out https://www.websitecarbon.com, which shows you the impact our your website and things you can do to improve it. I tried it and was shocked! But now I can do something about it...
What Can We Do As CX Leaders?
By identifying opportunities to weave ethical practices into your company's CX, you can not only improve customer and employee experience but also enhance your brand image and contribute to the global effort to reduce our ecological footprint and challenge social injustice.
Here are six steps I recommend to blend sustainability and CX into your current practices using aspects from my own framework CX Design:
1. Understand What Matters to Your Organisation
Creating a point of view on CX and sustainability can help you create a business case for why your CX strategy should include sustainable initiatives. You can start by conducting an internal discovery to understand your company's ESG and CSR goals. What are they, and which stakeholders are responsible for setting and delivering them?
Create a stakeholder map and go interview the right people. Your interviews should seek to understand what you company is trying to do and how well the goals are being met including any available data points on goals and success.
One of the stakeholders is likely to be the 'corporate office'. You'll be able to find out a lot from your company website, but depending on the size of your business, there may be entire teams dedicated to CSR.
Most big brands engage in ATL (above the line) and BTL (below the line) advertising on ERG/CSR, so the more aligned with ERG/CSR marketing is, it will become clear whether this is something that should be more consciously part of your CX proposition. If you have a brand team, brand marketing will be able to tell you how much importance your business has placed on communicating sustainability goals and efforts and bring you up to speed on campaigns and comms.
When it comes to DEI, HR is likely the right department to ask about how ESG/CSR relates to employee experience. Don't forget to capture data about employee demographics and sentiment.
Example: When I was working for Sainsbury’s, in 2012 they were about to sponsor the Paralympics in a multi-million £ sponsorship deal. They had no idea how inclusive their CX was for people with disabilities. My first project was to find out how well customers with disabilities were served before the brand was exposed to potential risk.
2. Find Out How Important Sustainability is to Customers
If your organisation is using survey-based research tools, you might be able to find existing data on how ‘important’ sustainability is to your customers. Most big brands track importance and satisfaction as part of their brand metrics but if you currently don’t measure sustainability, ESG/CSR could be a great question to ask in the next round of research and analyse customer demand in line with other key drivers. For example, to appreciate where sustainability fits into consumer demand, we need to understand that several factors, such as price, quality, convenience, and speed, come into play.
“If you currently don’t measure sustainability, ESG/CSR could be a great question to ask in the next round of research.”
Finding out if there are key segments that care more about sustainability can help you build tools like personas that will come in handy when mapping experiences and designing products, services and experiences that meet the needs of sustainability-conscious consumers.
Example: The Sainsbury's Paralympic sponsorship gave me an opportunity to research and understand the needs of customers with disabilities and create a set of user needs and personas that could be used to evaluate our current CX and serve as a design tool for the whole business in the design of products and services.
Next, you will need to conduct a discovery into how well CSR goals and customer expectations are being met through the customer experience today.
3. Involve the Right People
I am going to talk about journey mapping in point 4. But if you are going to go to the trouble of organising a workshop, don't miss the opportunity to engage people who will know the details better than you and will be able to contribute a helpful dose of reality about subjects like operations and product ranges–– and contribute plenty of ideas. Involving the right people from the right teams at this stage will not only create more meaningful outputs but also have the potential to reduce friction later down the line with having to convince stakeholders that action is required. After all, if they were part of it, contributed to it, and the opportunities were their ideas, they would want to support change.
Example: My Paralympic journey mapping involves store managers, the store formats team and the digital team, as well as representatives from a range of disability support groups, many of whom were Sainsbury's shoppers.
4. Evaluate the 'As-Is' Experience with a Green Journey Map
We love to journey map, but have you ever considered swim lanes on sustainability? Evaluating the ‘as-is’ experience is always the starting point for future innovation and a way to establish potential opportunities and quick wins for the business to address in BAU.
The goal of this exercise is to expose the gaps:
Between what sustainability-conscious customers need/expect and their experience
Between what your company is aiming for/talking about and the customer reality of what they experience.
Depending on your customer journey, complexity (and organisational level of CX design capability) this exercise can look different for everyone.
If you have an established customer journey map - here are some suggested maps /swimlanes for sustainability:
Maps for 'Economic, Environmental, Social'
A set of user needs and goals for sustainability-conscious customers along the top
A lane for 'What we say we do' to capture brand/comms messaging
And a lane for 'What we actually do' to capture metrics and data points around product and service categories.
If you business is huge and complex, you might want to just pick the most important / most publicised CSR goal and just focus on that with the same exercise to avoid things getting complicated.
But if you do not have an established customer journey map... You might need to get more creative and take a persona led approach by starting one from the perspective of an environmentally conscious consumer and map their needs and expectations before mapping the gaps.
If you can establish a set of pain points and opportunities off the back of this exercise you are off to a great start. But some quick wins might be about how to better connect customers with sustainability and make more socially conscious choices.
Example: The Paralympic sponsorship challenge was my first project at Sainsbury's, I had only been there 5 minutes and I was the first person with customer experience in my job title. We didn't have any journey maps. The brand promise was implicit that if we support the Paralympics, we include customers and employees with disabilities. I partnered with the disability action groups we were part of and asked for help to undertake mystery shopping in-store and online with representation from people with vision impairment, who were deaf or hard of hearing, had an intellectual disability, autism spectrum disorder and physical disability. I mapped out the stages of the shopping experience at a high level, and their feedback enabled us to map their experience across it during workshops. The teams present experienced an undeniable reality that they had zero visibility of. Not only were the gaps in experience stark but the people in the room experienced a 'belief' moment that no amount of output presentations could create.
5. Communicate Your Findings
As customer experience looks across the entire organisation and ignores the silos created by departments, you might be able to identify opportunities that have not been visible previously. Providing the business with a clear point of view on how well your customer experience matches the sustainability goals of the organisation and comparing the experience to the claims being made in advertising can often lead to a sharp intake of breath for senior executives.
Example: The Paralympic project became the first time I presented in front of the CEO and Sainsbury's Operating Board. I included a detailed report in the pre-read that highlighted that customer reality using real quotes from the mystery shoppers about barriers they experienced in physical and digital shopping experiences and centred my presentation around the brand-risks involved in not changing how we designed our stores and digital channels. Whilst a number of 'quick wins' were identified, the biggest win was getting budget to create an inclusive design toolkit and a full time person in my team to lead on inclusive CX initiatives. Beyond the Paralympics, this ignited the board's desire to become the most inclusive retailer in the UK –– and that opened doors for everything customer-centric that came next.
6. Design for a Brighter Future
If you’re lucky enough to be a CX designer like me, you can help your business work towards a greener future by considering sustainability within product, service and experience design and design service experiences that prioritise waste reduction and maximise social good.
If you can create a ‘green persona’ and tap into their unmet needs, you might find yourself coming up with new ideas such as repair services, rental options and collection options that reduce the carbon footprint of deliveries or apps that help customers manage waste.
Here is one of my favourite recent sustainable concept innovations from the team at Sainsburys called ‘Taste Me, Don’t Waste Me’ £2 food boxes. Genius!
Below is an example of my own that came out of a client project in social housing just to show how to bring CX design concepts to life in line with business goals.
Creating sustainable design principles is one way that you can help guide product and service development for your organisation and will enable you to indirectly impact and influence sustainable development. But the goal with any good CX design concept is to find the innovation sweet spot.
In a nutshell, when innovating, you’ll need to satisfy four different criteria if you want to make it a success:
1. Desirability: Are people waiting for this? Does it add value to the lives of your users and consumers?
2. Viability: Is your supporting business model sustainable, and can it be scaled?
3. Feasibility: Will you be able to deliver on your concept, both technologically and operationally?
4. Integrity: On a broader level, how does your innovation impact society and the planet as a whole? With the massive ecological challenges ahead, this criterion can no longer be overlooked and should be at the heart of your innovation thinking.
The challenge is that sometimes, the benefits of sustainability initiatives cancel one another out.
Let's look at some examples of sustainable product innovation:
Example 1 - Bottled Water
The desirability driver of water bottles is as clear as the liquid in them: providing clean water in a convenient way for customers. These products have proven to be highly viable, since they create recurring revenue for the manufacturer. However, if you look at the more eco-friendly alternatives, such as Dopper, you will see that this is not the case – customers buy one bottle and continue to fill it, drying up any recurring revenue streams.
The feasibility of the concept is outstanding as well: it is relatively cheap and easy to produce, thanks to ever evolving plastic bottling technology. But the catch is clearly the integrity aspect: the product’s negative impact in terms of waste and resources, as well as other ESG/CSR objectives, puts it at odds with maturing environmental and climate laws.
Water bottle producers face many challenges, and unless they meet the public’s expectations for durable, nature-friendly and zero-impact alternatives, they might suffer regulatory consequences in the not-so-distant future.
Example 2 - Pregnancy Tests
The desirability driver of pregnancy tests is, of course, to provide women with early information on a possible pregnancy, in the privacy of their own home. But as this case proves, not every innovation criterion is as black and white as one might think. Sometimes there’s even tension surrounding a single criterion.
Let’s set aside feasibility and viability for a moment and focus on the integrity criterion, based on the UN’s Sustainable Development Goals – or SDGs.
SDG 12: promoting circularity: From this point of view, the disposable nature of the test creates a negative impact as a result of the single use of disposable electronic and plastic parts. At-home pregnancy tests contribute to landfill waste and the depletion of resources.
SDG 3: access to health care: Needless to say, these types of tests significantly improve health care opportunities for women and their babies, by allowing women to seek antenatal care at an early stage of their pregnancy.
SDG 5: promoting gender equality: By providing women with early-stage information about their pregnancies, these tests facilitate family planning and afford women greater control over their lives and reproductive rights.
Example: As part of my CX design projects with my CMX (my consulting business) clients, we would conduct an exercise to assess the desirability, feasibility, viability and integrity of any concepts generated through CX innovation activities based on a set of pre-defined criteria. I've attached examples below.
Conclusion
Merging customer experience and sustainability is not just a shrewd business move but an essential step towards a greener future. By emphasising transparency, offering sustainable products and services, refining your supply chain and operations, harnessing technology, engaging customers, and empowering employees in the design process, your company can create a customer-centric and environmentally responsible business model.
This Earth Day, let's pledge to make a positive difference on our planet and in the lives of our customers and employees!
