Communicating the Sustainable Transition of Industrial B2B Companies

I. The Sustainable Transition of Industrial B2B Companies

In 2023, any industrial firm faces a tough challenge: providing top-notch products to its customers while closely overseeing the quantity and caliber of resources employed. This imperative arises from the pressing need to transition towards more ethical and sustainable models.

As a matter of fact, the next-generation industrial system will be grounded in different paradigms compared to the current global industry. The integration of new models will give rise to renovated products and services. A series of changes that will better align with the efforts of governments and institutions to actively participate in shaping a more sustainable society with a significantly reduced environmental footprint. This transformation inherently necessitates the introduction of new strategies, technologies, and skill sets.

One of the emerging paradigms is Industry 4.0, which has shown its effectiveness in stimulating the advancement and reshaping of organizational processes. This transformation not only enhances sustainability but also bolsters competitiveness. Its emphasis on digitization and automation of critical assets serves as a driving force for (re)designing both products and processes. Consequently, this approach significantly contributes to enhancing a company's sustainability efforts, ensuring responsible waste management and recycling as integral outcomes of these processes.

In this context, the approach to be pursued is consistently "value-driven”, and such an orientation carries substantial implications for production methods, supply chain configuration, digital sustainability performance evaluation and management, and the structure of the organization.

This leads to a crucial question: how can industrial companies properly communicate their transformation?

Furthermore, how could the process be supported by effective and clear communication of the newly renewed corporate values? What are the key performance indicators (KPIs) that should be regularly monitored, updated, and shared with the public, internal and external stakeholders, and customers?

Let's try to answer these questions.

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II. Communicating Sustainability

Several B2B companies are actively working towards carbon neutrality objectives and embracing ESG (Environmental, Social, and Governance) initiatives. These efforts are motivated by a sense of ethical responsibility as well as regulatory mandates that impact society on multiple fronts, including governments, which are bound by agreements like the Paris Agreement, the UN 2030 Agenda, and EU regulations, as well as citizens and businesses. 

These companies may view the shift towards sustainability as a chance to bolster their reputation in the market. They can achieve this by embracing a set of values that prioritize long-term considerations.

Today's B2B companies are thus called upon to incorporate sustainable transition into the communication of their value proposition, also known in literature as the Customer Value Proposition (CVP).

This is because effectively communicating sustainability, as confirmed by many studies and industry insights can be a source of competitive advantage in B2B markets.

Companies that are already innovating and offering sustainable solutions to their customers and stakeholders are grappling with the challenge of communicating the benefits of adopting these sustainable offerings. This effort is made in an attempt to reestablish a trust-based relationship that places a greater emphasis on human values.

Following CVP (Customer Value Proposition) criteria could potentially be a key factor in achieving this goal:

"In contrast to traditional branding and positioning strategies that normally emphasize an internal perspective and relatively intangible benefits, focusing on CVP elements in the communication of sustainable renewal prioritizes an external perspective, tangible benefits, and the presence of a value set that conceptually supports all the interventions. CVP articulates in detail how the sustainability of the supplier can be translated into economic, environmental, and social benefits for customers and other stakeholders" 

(Source: Ranta et al.)

In order to bring all of this to fruition, it is advisable to follow the following steps:

1. Collect data on production, material flows, system capacity, and sales. This not only allows the company to track all single materials in the value chain in real-time, from sourcing to distribution, but also to analyze their flow to identify inefficiencies and improve performance in logistics operations, reducing costs and maximizing profitability. Once this phase is finalized, production efforts should be directed toward products that minimize carbon footprint while ensuring maximum efficiency.
2. After laying the foundation for a more sustainable supply chain, it is time to share progress with internal and external stakeholders. Different approaches can be adopted depending on the strategic context. For example, distributing quarterly internal newsletters highlighting key sustainability metrics, such as reductions in carbon dioxide emissions per location and energy consumption, can be a choice. 
3. After defining your sustainability vision and goals in line with the brand's identity, mission, and original values, the company needs to develop a digital communication strategy aligned with the expectations of the target audience. Here, the challenge for B2B marketers and communication professionals lies in choosing the most suitable platforms and channels for communicating the new message. It is also essential to focus on selecting an appropriate tone of voice that enables authentic and transparent communication. Sustainability objectives and results should always match with the values, needs, and aspirations of stakeholders.

III. Our First Ally: A Website That Communicates Sustainability

Among the many digital communication tools available, the corporate website remains a cornerstone. Since the early days of the digital era, corporate websites have proven to be effective channels for communicating sustainability and providing evidence of a company's commitment.

Given their importance in such a communication strategy, a careful evaluation of best practices is essential, especially with a view to avoid the "greenwashing effect”:

“Greenwashing occurs when there is a gap between promises and concrete results and is significantly more likely if a B2B company adopts a "cosmetic" communication strategy, focusing on conveying a message without accompanying it with concrete actions”. (Source: Siano et al.)

When examining large corporations, it is pretty evident that their websites frequently include sections dedicated to organizational structures and sustainability governance tools. Notably, these websites should prominently showcase transparent reporting, presenting sustainability reports that adhere to principles set forth by international organizations.

In addition to sustainability reports, companies also employ other ways to communicate their sustainable activities. In this regard, the code of ethics and conduct, certifications, and inclusion in specific sustainability indexes are valid indicators for assessing the effectiveness of sustainability communication on the website.

However, another crucial factor to consider is that a sustainable organization inevitably promotes engagement processes to create 'shared value' with its stakeholders.

Consequently, corporate websites should incorporate tools that foster "inclusive" communication, well-organized forms of collaboration, and personalized engagement methods. The latter should prioritize stakeholder feedback, granting them a means to exert some influence on corporate decision-making.

As a result, the website should house a core set of essential information crucial for the effectiveness of the communication strategy. Nevertheless, stakeholder engagement should extend beyond the confines of the website alone; it should be seamlessly integrated into the broader digital communication strategy, capitalizing on all the interactive possibilities provided by new technologies, particularly those facilitating the development of an integrated multichannel approach.

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SOURCES

• AA.VV. (2013), Industrial Sustainability: challenges, perspectives, actions 
• AA.VV. (2022), Business transformation through sustainability based on Industry 4.0 
• Ray, A. (2022), Three Steps To Properly Communicate Your Sustainability Efforts Across The Value Chain
• AA.VV. (2020), How B2B suppliers articulate customer value propositions in the circular economy: Four innovation-driven value creation logics
• AA.VV. (2017), An Industry 4.0 research agenda for sustainable business models 
• AA.VV. (2016), Communicating Sustainability: An Operational Model for Evaluating Corporate Websites