Circular Marketing Links Sustainability and Growth

Marketing leaders play a key role in building momentum around sustainable practices but lag behind other business functions, according to new data from the World Federation of Advertisers (WFA) and Kantar’s Sustainable Transformation Practice. The report, released this week, drew on survey responses from more than 900 client-side marketers from 48 countries as well as existing work on sustainability marketing trends. Researchers also conducted in-depth interviews with 18 global leaders and 10 sustainability experts. In the two years since the WFA’s last report on marketing and sustainability, marketing organizations and brand leaders have developed a better understanding of the challenges they face, researchers found. The new report identified structural and institutional barriers to sustainable transformation, laying out an industry roadmap for marketers to drive growth alongside sustainability efforts through storytelling, design, innovation and collaboration. "Marketers are finally starting to grasp the scale of the sustainability challenge and, in particular, the climate crisis," Stephan Loerke, CEO of WFA, said in the report. "We have reached the point where the status quo is simply not an option. Transformation has become essential." Adweek’s 2023 Sustainability Honorees Are Setting Advertising’s Climate Agenda Circular marketing In order for sustainability and growth to align, most businesses will require systemic changes to adjust things like product development and end of life as well as profit and loss calculations. “We still can have a capitalist economic paradigm […] if we can decouple growth and the generation of profit from environmental destruction,” Solitaire Townsend, co-founder and chief solutionist at agency Futerra, said in the report. “It is actually possible to have vibrant growth, a generative and profitable economy without environmental destruction. But it will be radically dematerialized.” The report identified five levers that marketers have at their disposal in order to support this transition, a framework that the WFA and Kantar have dubbed “circular marketing and growth.” Those levers are as follows: Value Redefined describes an approach that evolves a traditional profit-and-loss framework to incorporate the cost and benefits to people and the climate.Sustainability First requires integrating sustainability into all aspects of the business rather than operating as its own silo.Radical Innovation encourages risky, imaginative, transformational changes to business models and product development to radically reduce climate and environmental impact.Transformative Relationships focuses on industrywide collaboration, partnering internally to build sustainability into the supply chain, and measuring and incentivizing agency partners.Creativity Into Action is about telling the sustainability story well, integrating sustainable practices into communications, aligning messaging with regulations and basing green claims on the entire product’s lifecycle. While sustainable transformation isn’t something that marketers can do alone, the report highlighted the importance of embedding sustainability throughout the marketing operating cycle—from measurement and trends to strategy and targeting. While 84% of marketers surveyed confirmed the importance of having a good sustainability data ecosystem and insights, just 30% said they do that well. In addition, 35% perceived a skills gap when it comes to marketing's sustainability knowledge. Inside the Agency Race to Bring Sustainability Efforts In-House Marketers must understand the value chain of their products and brands—not just the benefit to consumers, Jane Wakely, evp and chief consumer and marketing officer for PepsiCo, said in the report. “That is a change in how we as an industry go about things,” she said. “We have to understand … where we bring value to all the other stakeholders in that value chain, from the farmer through to logistics and transport, and how we maximize the value to our company, the planet and the people that we serve.” A vast majority of marketers surveyed (90%) said there was a need for a more ambitious sustainability agenda to create the necessary impact within the time constraints created by the climate crisis. Still, over a third (35%) said they lack the necessary internal resources. “It takes a village,” Cristina Diezhandino, global CMO for Diageo, said in the report. “The biggest win that we can have is real clarity around the end goal, determination to get there and a powerful orchestration organizationally.” Advertising Drove Consumption to Unsustainable Levels. Can It Reverse Course?

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To Align Sustainability and Growth, Embrace Circular Marketing

CMOs are uniquely positioned to help lead business transformation, new report shows

Kathryn Lundstrom

Stephen Lepitak

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Kathryn Lundstrom

Stephen Lepitak