The B2B Opportunity in Corporate Sustainability.
By Tensie Whelan and David Linich
Suppliers for major brands have a unique opportunity to grow market share through B2B sustainability solutions. Corporate leaders are facing mounting pressure from global markets and regulators to make verified, traceable sustainability commitments, such as decarbonization, circularity, and sustainable sourcing. Brands are leaning on suppliers to help them meet this demand. Suppliers are seeing more requests for evidence of sustainability performance in requests for proposals and on third-party due-diligence questionnaires, and those businesses that can provide solutions for sustainability challenges are receiving increased investment.
Major brands that require suppliers to improve the sustainability of their offerings include McDonald’s, which has asked its beef suppliers in Brazil to provide deforestation-free beef; Salesforce, which asks its suppliers to demonstrate their compliance with Science Based Targets initiative standards, carbon neutrality, and other climate commitments in its procurement contracts; and Mars, which requires its suppliers to provide proof of low-carbon, no-deforestation approaches for producing key commodities, such as palm oil.
Despite the increasing scrutiny of environmental, social, and governance practices from federal and state governments in the U.S., demand for sustainable products and services is continuing to grow across the country and in global markets. Market research conducted by the NYU Stern Center for Sustainable Business (CSB) has found that sustainability-marketed consumer packaged goods products in the U.S. are growing nearly twice as fast as conventionally marketed products, with a 28% price premium, on average (based on 10 years of data). And other CSB research found that sustainability is of interest to all types of U.S. consumers — across political parties, locations, levels of education, incomes, and other demographics.
Read the full MIT Sloan Management Review article.
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Tensie Whelan is a Clinical Professor of Business and Society and Director of the Center for Sustainable Business.