It’s a known fact that in today’s business landscape, “sustainability” and “profit” have become key mantras for any company.
However, one aspect that is often overlooked is how sentiment analysis can simultaneously support businesses in reaching two critical goals: fostering sustainability, and gaining a competitive edge.
Investing in sustainability pays off for companies in the medium and long term
Sustainability and profits are usually seen as polar opposites.
On the one hand, businesses are pressured to comply with new and evolving regulations, all of which are becoming increasingly urgent due to climate change, societal expectations, and institutions such as the European Union.
On the other hand, there’s an undeniable need rooted in today’s business model: to gain popularity, attract new customers, and gain significant competitive advantage.
Although they may seem like completely opposite needs at a first glance — where one is focused on ethics, and the other on sales targets — both are intrinsically connected.
In other words, they’re two sides of the same coin.
Sustainability and inclusivity lead to business growth.
This is because both can help your business:
- Gain an advantage over competitors in the long term
- Broaden and diversify your audience, reaching new consumer groups that are more aware of social and environmental issues
- Retain employees and partners
- Improve your brand image and reputation
Let’s not forget that sustainability and inclusivity are vital elements within the ESG (environmental, social, governance) framework, representing fundamental considerations in today’s financial landscape.
These have become among the most crucial banking indicators for analysing financial performance and long-term viability.
Sustainable practices and profits have become increasingly complementary, and no longer conflicting. Businesses now recognise that focusing solely on maximising profits without considering the well-being of people and the environment doesn’t pay off in the long run.
As a result, “triple bottom line” theory has gained further traction, underscoring the interconnectedness of profit, people, and the planet.
According to a Deutsche Bank study, quoted by McKinsey, out of the 56 companies studied, those with a strong ESG score enjoy reduced costs of debt and capital. Similarly, the financial performances of 89% of the businesses analysed in the study are above average in both the short and long term.
5 tips for maximising the link between sustainability and sentiment
Sentiment analysis is usually discussed in a reputation analysis context, i.e. measuring the reputation of a company or brand.
However, sentiment can also serve as a tool to enhance sustainability performance, allowing for a detailed analysis of people’s perception and opinion of a company’s sustainability initiatives — whether your own or your competitors’.
Sentiment analysis involves identifying and categorising opinions expressed in any online text — such as reviews, online feedback, social posts, blogs, and surveys — to determine the emotional tone and the most-discussed.
Usually, Sentiment analysis is carried out using natural language processing (NLP) and artificial intelligence (AI).
Gauging your audience means gaining invaluable insights to measure and enhance your company’s sustainability efforts.
1 – Measuring the public perception of sustainability initiatives
Analysing the tone of voice of customer feedback will help you understand what your audience truly thinks about your company’s sustainability efforts.
Are customers aware of your sustainability actions? And are they saying anything about them? Are you, at the end of the day, communicating with them in the right way?
Let’s imagine a clothing company launching a new program to recycle second hand garments in exchange for customer discounts to reduce waste, CO2 emissions and foster a circular economy.
The initiative will be communicated to the media through press releases, social media, and a dedicated section on the company’s website.
This is where sentiment analysis will come into play. To assess the campaign’s success, the company will need to track reviews, feedback, and comments left by customers throughout the months following the campaign launch to understand whether:
- Customers are talking about the campaign and how often they do so
- The initiative is appreciated
- There are any criticisms or suggestions not yet considered.
2 – Identifying untapped opportunities and areas for improvement
As mentioned earlier, sentiment analysis enables you to evaluate various topics discussed in online customer comments and the corresponding level of appreciation associated with each topic.
Content analysis can reveal innumerable valuable insights for your company’s product team.
For example, you may find that customers are particularly impressed by an eco-friendly product you have just launched, but wonder why you do not implement other sustainable initiatives in your production chain.
Similarly, content analysis can be used to benchmark and conduct sentiment analysis on your competitors, helping you identify their weaknesses and use them in your favour.
Armed with this information, you can prioritise sustainable actions and implement the most significant improvements.
3 – Providing sustainable and personalised recommendations
By tapping into customer behaviour standards and preferences, companies can adapt their sustainability efforts to meet the specific needs and interests of their audience.
Consider a cosmetics company that has come up with a new sustainable product line. If a large proportion of its customers already choose and comment positively on anti-ageing solutions, investing in advertising targeted at this customer base to promote sustainable, anti-ageing products is likely to be successful.
This will simultaneously educate customers about sustainable choices and boost sales.
4 – Avoiding greenwashing
The European Parliament has recently proposed to ban the use of generic environmental claims such as ‘environmentally friendly’, ‘natural’, ‘biodegradable’, ‘carbon neutral’ or ‘ecological’ if they are not accompanied by detailed evidence.
This is aimed at preventing a practice called greenwashing, which involves employing communication tactics to portray one’s actions as environmentally conscious, while actually concealing their true negative environmental effects.
Not only the EU, but individuals themselves are also seeking improved behaviour from companies. People are increasingly looking for clear and transparent practices, particularly when they are willing to pay extra for environmentally friendly products.
To avoid the risk of being seen as engaging in greenwashing, it is crucial to ensure that your organisation’s sustainability goals and communication efforts are aligned.
By carefully monitoring and addressing any criticisms or concerns through sentiment analysis, you can implement corrective measures and transform negative feedback into fresh possibilities for improvement.
5 – Enhancing brand recognition through education and awareness-raising
By pinpointing widely discussed topics lacking sufficient clarity, you can develop informative content to raise awareness. This approach will contribute to heightened brand recognition, showcasing your organisation’s dedication and expertise in the field.
For example, Unilever recently collaborated with the Behavioural Insights Team (BIT) and a group of nine influencers from TikTok and Instagram to understand the role social media has in encouraging people to opt for sustainable options. Dove and Hellmann commissioned 30 pieces of social content inspired by sustainability, which were then tested by BIT to measure their impact on consumers.
The study revealed that the generated content had a genuinely positive influence on individuals’ thinking and behaviours. A significant 78% of respondents said that social media served as the most motivating source of information for adopting more sustainable actions, surpassing the influence of TV documentaries (48%), news articles (37%), and institutional campaigns (20%).
By effectively harnessing sentiment analysis, a company can not only improve its sustainability efforts, but also strengthen its relationship with existing customers and attract new, more environmentally and socially conscious ones.
This approach naturally makes companies more sustainable. However, it fortifies their long-term solidity and competitive edge too.
