Green for Profit or Green for the Environment?

Concerns

Is the “take/make/waste” market becoming obsolete? How will #sustainability practices help to sustain your business? What does it mean to practice corporate responsibility in 2020 and beyond?

Case Study

Levi Strauss Co. is a prime example of how a mature business has maintained its #longevity through corporate responsible and #progressive business practices. Originating in San Francisco, California, the world’s biggest denim #brand is currently 167 years old. The brand believes, ”giving back never goes out of style" (Levi Strauss Co., 2020). Examples of positive social impacts through its previous initiatives include introducing the first women’s blue jeans in 1934, opening one of the country’s first radically integrated factories in 1960, the LS&Co. response to the growing AIDS crisis in 1982, being the founding member of the Better Cotton Initiative in 2010 as well as many other influential company milestones.

The BCI’s goals are to significantly reduce companies’ environmental footprint by #reducing chemical and water use in cotton production. This has prompted more businesses to become members that “support farmers’ directly by investing in improved practices” (Unzipped Staff, 2019). LS&Co. understands that environmental consciousness is included within the definition of corporate responsibility. The company did see 2 decades of net losses and poor growth from 1997-2015 that many experts relate to market share and international retraction and expansion; but, through the BCI’s efforts, Levi Strauss Co. was able to launch its new Wellthread Collection in 2015 that features products made with 100% cotton for easier #recyclability produced with up to 96% less water in the production process while keeping the company’s iconic, long-lasting design. More recently, the company has partnered with the Blue Jeans Go Green program that #reuses the brand’s jeans found in landfills and turns them into alternative products such as building insulation. The result? Levi’s delivered its highest annual revenue growth rate in a decade in 2017. The #CEO of LS&Co., Chip Bergh, attributes these results to a few rebranding techniques including the meaningful #viralcampaign called “Water Less”. The company has also just recently decided to go public on the #NYSE in 2019 at a time when green #investing is at an all-time high. “2019 saw a total of 479 #green bonds issued worldwide, up by a quarter compared to the previous year” (Smith, 2020). It has been predicted only to increase in 2020.

A Current Fad or Growing Trend?

Levi’s target market includes consumers between the ages of 15-25. When the BCI was formed, Millennials were within Levi’s target market. #Millennials are credited as the single most environmentally concerned generation to date. Currently #Centennials, or Gen Z, hold Levi’s target market after Millennials have set the standard of brand loyalty to brands with a conscience. Now the “digital natives” have taken their concerns to brand authenticity and social message. “41% of this generation read at least five online reviews before making a purchase, and they share twice as much positive feedback than negative” (Wordstream, 2019). LS&Co. continues to convey their valuable social message through channels catered to Centennials as 40% of direct-to-consumer #sales compromise the business. An example of this is the CEO’s idea of launching a virtual music festival on Instagram Live during the current COVID-19 pandemic to combat the loss in sales from the rescheduled annual music festival, #Coachella, at which Levi’s are deemed the unofficial uniform. Chip Bergh continues to feel confident and hopeful during the COVID-19 crisis.

No Longer an Option

It is no secret that the fast-growing green market has become of peak public interest in the last 2 decades. “71% of employees say that a CEO’s environmental activity influences their desire to work for that company” (Horowitz, n.d.).

This means #consumers, #investors, and #employees all hold green values close to their heart. Therefore, the business logic that being environmentally friendly comes with an economic sacrifice is no longer supported by financial data. Green for #profit and green for the #environment are virtually one and the same.

---

References:

5 Essential Strategies for Marketing to Generation Z. (2019, August 21). https://www.wordstream.com/blog/ws/2019/08/21/marketing-to-generation-z

Ballard, J. (2020, April 19). 3 Reasons Why Levi Strauss Can Survive the Coronavirus. https://www.fool.com/investing/2020/04/19/3-reasons-why-levi-strauss-can-survive-coronavirus.aspx

Bryant, B. (2020, April 20). Celebrate 50 Years of Earth Day. https://www.levistrauss.com/2020/04/21/celebrate-50-years-of-earth-day/

Dinh, M. (2019, January 18). Levi's Growth Story - How Levi's came back from the biggest drop in revenue to hit the sales record in 2017. https://beeketing.com/blog/levis-growth-story/

Horowitz, S. (n.d.). Green And Profitable Home: Thanks for Visiting. https://greenandprofitable.com/

Smith, E. (2020, February 14). The numbers suggest the green investing 'mega trend' is here to stay. https://www.cnbc.com/2020/02/14/esg-investing-numbers-suggest-green-investing-mega-trend-is-here.html

Why We're Invested in the Better Cotton Initiative. (2019, May 30). https://www.levistrauss.com/2019/05/13/why-were-invested-in-the-better-cotton-initiative/