Knowing your customer is one of the first rules for running a successful business, and customers today care about sustainability.
One in three consumers prefer shopping with the planet in mind, even if it means paying a little more, according to a SurveyMonkey study. Sales of products marketed as sustainable also grew 2.7x faster than those that didn't, according to a study from New York University's Stern Center for Sustainable Business. While making your company more environmentally friendly will likely require an upfront investment, it could pay dividends in the long term, and you don't have to reinvent your entire business plan.
Here are three sustainability tips for every business owner in 2023.
1. Rethink your packaging.
Ericka Rodriguez founded her vegan lipstick brand, Axiology, in 2014 in New York City. Though her lipsticks were originally packaged in recyclable aluminum, Rodriguez learned that their plastic components meant they often couldn't be recycled. So she and her team of four employees began testing ways to make their packaging more environmentally friendly. They settled on a compostable, food-grade paper free of animal-sourced waxes and glue that wraps around the lipstick like paper on a crayon. While it took a year and a half and thousands of dollars to make the switch, the final production cost is now less than that of the aluminum packaging, enabling Rodriguez to lower the retail price of her flagship lipstick from $28 to $24. The new packaging also helps differentiate her brand from the competition.
"I don't think the world needs another plastic packaging lipstick brand," Rodriguez says. "There are already so many."
2. Consider responsible sourcing.
Nadya Okamoto and Nick Jain founded the direct-to-consumer period care brand August in 2021. The main material for their products, cotton, is the most profitable non-food crop in the world, but farming with pesticides, fertilizers, and other chemicals can contaminate waterways and soil, creating havoc in ecosystems. So, August's founders were committed from the start to use only sustainably farmed, organic cotton versus the popular industry alternative viscose, a type of rayon that is less sustainable and the subject of various health concerns. That means the cotton crops used for their products create fewer greenhouse gas emissions and don't contaminate surrounding ecosystems. The average price of a 28-pack of regular tampons retails for between $10 and $11, while a 24-pack of August's tampons is priced between $14 and $15. For Okamoto, the difference in price is worth it for her customers and her business.
"Supply chains are being challenged to be as ethical as possible," says Okamoto. "Our deepened commitment to making sure that we stand by those values has helped us cultivate a beautiful community."
3. Beware of greenwashing.
It's no secret that companies overstate how environmentally friendly their products are. "For me, greenwashing is overclaiming in a significant way or lying about what you're doing," says Tensie Whelan, director of the Center for Sustainable Business at New York University. "Some of it is a lack of competence. This is a whole new area. We're all learning all the time."
While misleading claims about products being environmentally friendly are common, companies that exaggerate details about sustainability risk significant reputational damage. Greenwashing has been at the center of controversy over the past five years as companies like Tide, Coca-Cola, and Banana Boat sunscreens have faced inquiries and even lawsuits challenging various claims related to sustainability.
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