The World of Brands at a Crossroads

Florian Platzek / Anna-Karina Schmitz / Annika Hagen - January 21, 2026

Tips for practitioners

Pressure on companies to operate more sustainably continues to grow. Climate change, political regulation, and rising expectations among consumers have firmly placed sustainability at the center of public and corporate attention. While some brands are regarded as pioneers that have embedded sustainability in their identity for years, others are still catching up step by step.

Waiting, however, can prove to be a fatal mistake. Many consumer goods brands have reached a decisive turning point. Sustainability is no longer optional, but mandatory. Companies that succeed in combining environmental responsibility with strong values will emerge from this phase in a stronger position. Those that hesitate, by contrast, risk losing relevance in a future in which sustainability, not least driven by regulation, becomes the new normal.

Sustainability pioneers and late movers

Green brands have built their reputation early on through ecological innovation and often attract a loyal, though relatively small, customer base. Their strength lies in their image as trailblazers in environmental responsibility. Patagonia, the California-based outdoor apparel company, is a well-known example, having anchored sustainability in its brand identity for decades. Yet even such brands increasingly face the challenge of growing beyond niche markets and capturing larger market shares. While consumers value sustainability, many are only partially willing to accept significant trade-offs in price, performance, or convenience.

Conventional brands, on the other hand, benefit from reach, brand recognition, and established networks. For a long time, they could treat sustainability as an additional selling point rather than a core requirement. With stricter regulation, such as measures under the European Green Deal, this approach is no longer viable. Sustainability is no longer voluntary; it is an obligation.

More regulation, more level playing fields?

Many executives view the new regulatory frameworks ambivalently. On the one hand, they provide clarity and help prevent greenwashing. On the other hand, reporting requirements, documentation, and certifications significantly increase complexity. Smaller companies in particular fear being overburdened, while large corporations may benefit from economies of scale and lobbying power.

At the same time, regulation reduces differentiation. If all brands are required to become more sustainable, the competitive advantage of ecological pioneers diminishes. This makes it all the more important to embed additional values such as quality, emotional appeal, or user friendliness alongside environmental claims.

Consumer expectations versus reality

Awareness of climate protection and sustainable production is growing yet purchasing decisions often remain inconsistent. High prices and inflation reinforce the tendency for consumers to support sustainability in principle while opting for cheaper, less sustainable alternatives in everyday life. For brands, this means that sustainability alone is not enough. It must be linked to tangible benefits, whether through performance, price stability, or experiential value. Refill stations in retail illustrate this challenge: early pilot projects failed due to low customer acceptance. The concept made sense ecologically but proved impractical for mass adoption.

First movers or fast followers – who has the advantage?

Companies must decide when it pays off to invest early in sustainable innovation and when it is wiser to wait and scale proven solutions. Research suggests that being first to market does not automatically confer a lasting advantage. Success depends less on timing and more on the ability to introduce solutions effectively to the mass market and scale them efficiently.

It is evident that sustainability is no longer merely a question of conviction. It has become a strategic imperative for consumer goods manufacturers. Whether green or conventional, all brands must reposition themselves to remain relevant in tomorrow’s market. Sustainability should not only be understood as an obligation, but also as a driver of value.

Literature reference

- Platzek, F./Schmitz, A. K./Hagen, A. (2025): The Role of First-Mover Advantages in Sustainability: Conceptualizing the Sustainability Transformations of Green and Conventional Brands. Business & Society, 00076503251343359.

DOI of the article: https://doi.org/10.70897/whu.wk.0012