Jay on strategies for responding to sustainability-oriented competitors
Sustainability-focused startups are entering established companies’ market space, bringing both new threats and new opportunities.
Employees want to work for them, customers are willing to pay more for their products and investors are eager to become shareholders. “Hybrid social ventures” like Whole Foods, Patagonia, and Honest Tea that combine commerce with sustainability missions are leading the movement for sustainability-oriented innovation in business.
For established companies that were not necessarily built with sustainability in mind, these new entrants are competing for their most attractive customers and talent. Customers that prefer sustainability-oriented products and services tend to be young and relatively wealthy. Talented employees who have a choice of where to work, particularly millennials, increasingly want to use their skills at companies that they perceive to be doing good in the world. A continued generational shift toward sustainability-oriented values threatens to shift the balance even further in favour of companies that have sustainability baked into their DNA.
Although these hybrid social ventures are still relatively small in many industries, forward-thinking executives have begun to take notice and create plans for responding to them.