With A Younger Consumer Base, Companies Are Turning To Sustainable Solutions
Contributor: Andy Marsh
Last year, millennials finally overtook the baby boomer generation as the largest generational cohort in the U.S. The older generation may still control the bulk of American wealth, but analysts predict that some $30 trillion of that capital will transfer to millennial pockets over the next 30 years as the boomer population declines. And although most millennials are likely too busy navigating financial insecurity, crippling debt and chronic anxiety to give much thought to these figures, corporations would do well to take notice.
For the most part, millennials have proved to be significantly more socially and environmentally conscious than their predecessors and have proved they'll quickly turn on businesses that don't align with their values. On the other hand, according to a 2019 Fast Company survey, 75% of millennials said they would take a pay cut to work for an environmentally responsible company. Now, savvy corporations are scrambling to build out corporate social responsibility departments and aggressive sustainability initiatives, committing themselves to popular causes such as waste reduction and clean energy.
A License To Kill ... Industries
For businesses operating today, sustainability isn't an option; it's mission critical. Millennials have earned a menacing reputation among business leaders for their ability to kill whole industries, and while that narrative may be somewhat overblown, it's certainly rooted in a kernel of truth.
Millennials don't have a particular vendetta against casual dining chains, cable TV or mayonnaise (although, to be fair, many of them are quite openly hostile toward Applebee’s in particular). More often than not, the issue is simply that tastes have changed, and many millennials have chosen to direct their limited discretionary income toward new categories of small luxuries and indulgences.
However, this is most certainly not the case for businesses that violate millennials' core values of sustainability and environmental stewardship. Recent years have shown that millennials are unhappy with how industry has impacted the planet and that they're willing to leverage their influence as consumers to make a difference. Let's take a look at a few examples.
While some millennials are happy to wear vintage or synthetic fur coats, the purchase of newly produced animal furs has become one of the latest victims of cancel culture. Fur farming has long been subject to aggressive opposition from animal rights activists due to unsustainable practices and animal cruelty. Now, it would seem that the decades-long campaign is working.
In just the past year, California became the first U.S. state to ban the sale and production of fur. Meanwhile, retailers and luxury fashion brands like Macy's, Bloomingdales, Prada and 3.1 Phillip Lim all announced bans on fur sales in 2019. Even companies like Canada Goose, whose products make relatively minimal use of fur linings and trim, have been caught up in enormous PR controversies related to fur, precipitating significant losses in stock price.
Although many trends have contributed to the slow decline of the diamond industry, one of the biggest factors has been changing attitudes surrounding the ethics and sustainability of diamond mining. Unsustainable diamond mining practices have led to severe soil erosion, deforestation and water pollution all across the continent of Africa, where much of the world's diamond production takes place.
With diamond mining tainted by a history of conflict and environmentally unfriendly practices, some millennials are turning to alternative solutions like lab-grown diamonds or comparatively inexpensive colored stones. This has led to significant declines in mined diamond sales, according to Bain & Company's Global Diamond Report 2019. The report cites consumers' growing insistence on environmental and social responsibility as one of the three key drivers of the mined diamond market's decline.
Oil And Gas
Most millennials may not yet have the capital to make much of a direct impact on the oil and gas industry, but they're finding other ways to wield their influence. For years, younger members of the generation have been lobbying for large universities and other investment institutions to divest from fossil fuel companies. And while it's taken some time, these efforts are finally filtering out into the mainstream investment community and making a real impact.
In addition to the divestment threat, millennials are also leveraging social pressure to prevent their peers from flocking to the oil and gas industry. This has led to serious recruiting challenges in the sector, with a survey conducted by energy recruitment company Energy Jobline and Airswift (viaOilPrice.com) of current oil and gas industry employees finding that nearly 50% of respondents were "either quite worried or very worried about an impending talent crisis."
The Path Forward
While the oil and gas sector may have dim hopes for repairing its relationship with millennials, other industries have far more opportunities. Even organizations that have earned a bad reputation can redeem themselves by committing themselves to operating responsibly and with minimal environmental impact.
For example, in 2012, Apple earned a tsunami of negative press coverage thanks to a Greenpeace report that identified the tech manufacturer's energy-hungry data centers as a leading consumer of coal-fired energy. This was a wake-up call for Apple, which announced the following year that it had transitioned its data centers to 100% renewable energy.
Nearly a decade later, Apple has built a new reputation for its ambitious sustainability initiatives and is consistently ranked as the world's greenest tech company. Not only has Apple demonstrated that it is possible to improve sustainability practices, but it's also shown how proactive promotion of those efforts can help rehabilitate a company's image — even with millennials.
Others would do well to follow this example. Investments made today in clean energy, sustainable operations and responsible production practices won't just ensure that your business is ready to thrive in a future where sustainability will be increasingly regulated and enforced; it will also ensure your organization is positioned to succeed among what is soon to be the most powerful consumer group in the world. And given their well-known penchant for "killing" entire industries, chances are that you don't want to be on their bad side.