Sustainability in sales: green pays off

Europe's "Green Deal" requires companies to act sustainably. Four Business Studies professors from Dortmund University of Applied Sciences and Arts have investigated whether sustainability in sales at German companies is just a nice word on paper or a lived practice. Their conclusion: companies still have a lot to do. But if they act now, it will pay off.

Sales is one of the largest fields of work in Germany and is essential for companies to bring the products or services they offer to customers. Around one in ten employees in Germany works in sales. "As the interface to customers, sales can accurately assess whether the increasing demands of sustainability regulation on companies are being implemented and are relevant to decision-making," says Prof. Dr. Sabrina Scheidler, corporate sustainability expert and co-author of the study. Sales employees therefore have a "whistleblower" function.

For the first major study on the implementation status of sustainability in sales, researchers at Fachhochschule Dortmund University of Applied Sciences and Arts surveyed several hundred sales employees from various industries and hierarchical levels. The majority of them see a growing importance of the topic of sustainability in companies and the potential for a future competitive advantage. Interest is also high at customer level: 84% actively request sustainability information - such as the carbon footprint or certificates of origin for materials.

"The pull of regulation is increasing and aspects of sustainability are often already formal criteria in tenders on the customer side," summarizes Prof. Scheidler. "However, when it comes to the actual decision-making process, sustainability-related aspects have so far only played a subordinate role. There is also currently little additional willingness to pay on the part of customers." This lack of appreciation for sustainable activities on the customer side leaves its mark on sales, as her colleague Prof. Dr. Fabian Kubik adds. "In our study, we found that there is little real prioritization of sustainability in sales and corresponding sales management. Implementation here is still hesitant."

Only a few companies have anchored sustainability in their sales targets. "As an employee, I do this particularly well and intensively, for which I am rewarded by the company," explains Fabian Kubik. This is particularly true in sales, where a variable remuneration component linked to specific targets is commonplace. "That's why companies' sustainability targets need to be broken down into individual employee targets. These could be targets for the sale of sustainable products, but also the prudent planning of digital or on-site appointments." This is the only way for employees to have clarity about how to act in terms of sustainability and the corresponding incentives to do so. "Otherwise, no matter how sustainable a corporate strategy is, it will have no effect at the end of the chain," emphasizes Fabian Kubik.

According to the authors of the study, the translation of sustainability strategies into KPIs, i.e. performance and success indicators, is where the biggest levers for greater sustainability in sales can be found. According to the study, only 18% of respondents had sustainability-related individual targets. "Sustainability must be relevant to business," emphasizes Sabrina Scheidler. It is not only the majority of employees surveyed who believe that implementing sustainable sales practices at an early stage represents a strategic competitive advantage. The authors of the sustainability study can also back this up with figures.

To do this, they divided companies into two groups: Sustainability leaders have clear and deeply rooted strategies in this area and actively implement sustainability aspects. The sustainability laggards include companies that only react to pressure from laws and regulations, make only minimal efforts or even block the issue of sustainability.

"We see that the sustainability leaders are significantly better positioned in terms of business performance than the procrastinators," says Prof. Dr. Hanaa Ryari. They have more sales growth and higher profits than the industry average, and their sustainable activities also score highly in terms of customer and employee retention. Among sustainability hesitants, one in three employees is already planning to leave the company in the next year, compared to only one in ten among sustainability leaders. The hesitants also have significantly greater problems in recruiting new employees. "As there is an increasing shortage of skilled workers in sales, companies are well advised to take action now. Sustainability pays off," says Hanaa Ryari.