Empty business statements are meaningless in the era of the socially conscious consumer

What is on the minds of business chiefs as the year ends, and they contemplate a holiday season and a welcome break – one in which they can be a bit more reflective about where they are heading?

Putting aside anxieties about the general election and Brexit, and encroaching globalisation and the rise of artificial intelligence, the one abiding worry is their sense of purpose. Perhaps late in the day, corporates are realising that if they don’t have an objective, coupled with principles that they are seen to be adhering to, they will suffer.

This is beyond the now old-fashioned mission statement. When they became the rage, seemingly every company everywhere chose a few words that appeared to mean something they could put under their logo and use to adorn their marketing material. They were empty and meaningless, and nobody could ever judge them on whether they matched what they proclaimed or lamentably failed. “Building homes for tomorrow” – isn’t that what builders do? They don’t construct homes for the past. “To help make every brand more inspiring, and the world more intelligent” – please. “Our mission is to operate the best specialty retail business in America, regardless of the product we sell” – so we have no particular affinity for the product we sell, it could be anything?

I could go on, but you get the picture of vague, empty rhetoric that sounds good but is actually rubbish. Now, as 2020 nears, the need is altogether different. Customers, consumers, are much savvier and more clued up than they ever were. They’re worried about the environment and their fellow man in a way they never were previously. They expect the companies they deal with to have a purpose beyond merely making a profit for their shareholders. They should, too, have a set of values that are beyond reproach.

Public attitudes are changing, and rapidly. The latest example of this comes from this year’s OC&C Retail Proposition Index prepared by OC&C, a leading global strategy consultancy.

It asks 50,000 consumers globally to rate the retailers where they’ve shopped on the strength of their overall proposition, and then to score the key elements of that proposition such as price, range, and service. These results are then used to rank the retailers.

This year’s survey reveals a major shift in what influences where people choose to shop, with two seemingly conflicting trends of value shopping and ethical consumerism becoming increasingly significant.

In short, people don’t want to feel ripped off and they want to be sure that what they’re doing is not going to damage the planet. A store chain that can combine both of those will do well; one that does one, but not the other, will not.

M&S Simply Food beat John Lewis, Amazon and Aldi to become the UK’s favourite retailer this year. Three of the top 10 favourites were discounters.

But it’s price and sustainability that is winning. All those messages in M&S telling you where, how, when and by whom the fish was caught or the fruit was grown, and the ditching of over-elaborate sole-use plastic packaging is paying dividends.

According to Matt Coode, partner at OC&C, “sustainability, value and trust are the most important trends for consumers this year”.

What is termed “conscious shopping” is a clear differentiator for shop brands that win and those that lose. Almost half, 45 per cent, of consumers said that a retailer’s impact on the environment is important to them when shopping. This rise to 55 per cent among the millennials and Gen Zs, who will drive over 90 per cent of spending growth in the UK over the coming five years.

First to spot and respond to the shift towards sustainability were health and beauty suppliers. Possibly because they were also targeted by protestors, they began addressing the ethical and environmental effect of their products. Now, there is no escape for any company – says OC&C, “it is now vital that all brands have a strong and authentic sustainability strategy”.

It’s all part of the push to ESG, environmental, social and governance. This promises to bring about a sea change in corporate attitudes and behaviour, far bigger than anything ever set in motion by those other three initials of yesteryear, CSR or corporate social responsibility.

Then, CSR was something to be paid lip service to. Often it was added to the domain of the company secretary, and frequently it was tagged on to board agendas, and would fall by the wayside if the meeting dragged on. CSR was an afterthought, of little consequence.

ESG is entirely different. The world has altered, and the people now populating that world – the millennials and Gen Zs – have different expectations. They’re purchasers, and increasingly, they’re shareholders. That is what is driving the increasing domination of ESG: the rise of the socially conscious investor. Last time, with CSR, it was talked and written about, but that was about all – it was not widely taken up by those who matter to company bosses more than anyone, the shareholders.

As they walk off their ethically reared turkey and organically grown vegetables this Boxing Day, more than a few chairmen and CEOs will be pondering how, in the year ahead, their organisation can become even more ESG-aligned.