ING Equity markets sees third industrial revolution: responsible & sustainable growth
25 maart 2010
What a good read! ING is “spot on” about some major trends: consumer demands, responsible sourcing, emerging markets. These trends will separate winners from losers. And whereas ING notes that some people consider all this “soft”, it concludes that in fact it is all about hard benefits. Let’s put it differently. From our own experience we know that these trends not only separate the winners from losers, but also the men from the boys. Play time is over, it is time to act. Not taking on the challenges simply is no option. ING says buy low valued MCCs. I would like to add: send complacent board members home.
According to the report: A revolution in marketing/sales is coming. ‘Brands’ have a responsibility to act. Against the background of demographic growth in developing areas and economic/social crises in the West, we are at a crossroads where consumption growth will have to be decoupled from impacting society. An increasing minority of consumers are choosing a sustainable positive lifestyle and are no longer willing to compromise on responsible behaviour from companies. Hence the need for companies to focus on clean labelling, local sourcing and a new DNA for brands.
Companies will have to adjust their total value chain to resource scarcity (food, energy, water) and responsible sourcing, as this will be critical for their cost level, margins and brand equity.
Emerging market strength is redefining the balance of power and creating MCCs. Economic and political crises, as well as food, energy and water trends, should lead to a redistribution of power towards EM. Multi-committed companies (MCCs) are in the sweet spot of these trends and could create the third industrial revolution: real responsible and sustainable growth.
‘Hard’ business benefits need new equity research. Although there is a perception that these trends are soft, in our view we are reaching a point where new factors need to be incorporated into research.
Just to emphasise: the writers of the report are not “the soft guys” of a sustainability department, but equity markets analysts. A job well done.
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