It’s hard to read the news these days without one company or another trumpeting their green credentials. In case you hadn’t noticed: M&S has Plan A, Tesco has a Community Plan, GE’s launched Ecomagination, Virgin announced $3bn for a competition to combat climate change while setting up a biofuel business; while Sky and HSBC have both gone carbon neutral. Even Wal*Mart has gone sustainable!
Let’s face it, green is the new black. The day your CEO thought would never come – green has got cool, sexy and more importantly, profitable.
But reading between the lines, how do you tell if it’s true green or green wash? With so much energy, not to mention money and celebrity behind businesses going green these days, it’s sometimes hard to judge whats the real deal, what’s promising or what’s just shameless opportunism. Will the latest green product really help save the planet and deliver a sustainable future, or is it just a marketing gimmick?
Forum for the Future asked nine green business and branding gurus* (including Jonathon Porritt - Founder Director of Forum for the Future, Rita Clifton - Chair of Interbrand and William J. Kramer - Director, World Resources Institute) to review these recent high profile company cases and give us the low down on the recent trend towards sustainable business. The gurus gave us 10 points which help make sense of all the noise as well as providing tips on getting ahead in the race to go green.
1. A real sea change is underway
Looking at the current trends and recent announcements, there are signs of real progress and positive signals of change. In an arena that was once confined to Body Shop and hippies, we’re now seeing a major shift in more mainstream businesses as – Tesco, M&S and Topshop are all in on the act, along with the luxury end of the market - Duchy Originals, Green and Blacks and even Harrods.
"We’ve seen a fundamental shift over the past 2 years. Significant uptake is reaching a potential tipping point – though this is still the early adopters. It’s still a mixture of real strategy and PR but encouraging to see we are past the era of “pure PR” such as CSR reports."
2. Land ahoy... but not docking just yet
Despite progress, the size of the challenges we face in building a sustainable future means there is still a long way to go. Even the more progressive strategies – such as General Electric’s business focused ‘Ecomagination’ program launch in 2006 - do not fully acknowledge or live up to the scale of change required:
“GE’s Ecomagination is doing well. They (product range) have 12% growth while the rest of GE is 9% - but the rest (of the company) remains largely untouched. It is fantastical to think at this point that there has been a fundamental change across GE”.
3. Get your house in order first
It’s critical to get internal alignment and buy in before external communication. Companies need to look joined up, with no obvious internal contradictions and have both management and staff buy-in before they go public, making claims and commitments. As any good marketer knows, this is integral to building consumer trust and credibility.
"My recommendations would be – you need to first get internal sorted before talking externally”
“Sustainable brands will have credibility, trust, and measurement"
4. Take sustainability to the heart
Our gurus speak of the need for full and strategic sustainability integration - to get it into the heart and whole of the organisation. Though this is starting to happen, contradictions remain and it is a key challenge going forward
“The future will need to see companies moving through performance optimization to real strategic transformation. We need to bring SD into the heart of the company and have a truly integrated approach”
“Key challenge in the next five years – “Embedding SD values into the heart of the proposition: customer service, product, operations. Companies will be held to account in all areas”.
5. Delivery and performance is everything
Sustainable business needs to be built on real actions, activities and results with the most convincing examples of sustainable business built on tangible improvements, product or service performance and delivery. Consumers are increasingly savvy over green wash and public scrutiny is likely to follow this trend. Green products and services have to match their competitors, or be better.
“If it's all about branding and marketing, I'm not really interested in helping the process. Branding should grow out of what actually happens on the ground.”
“If it doesn't actually emerge from what the company does, how it behaves (and can be shown to behave, not from its own reporting, but by independent third parties), then the branding effort will largely fail, for either one of two reasons - for those who care, they will sniff out the frauds, and punish them, as exposed hypocrisy carries a big price in business as in politics; for the large part of the market that doesn't care, it's a waste of money.”
6. Challenge and change the business model
Fundamental questions regarding unsustainable business models need to be addressed before strategies can be fully credible. Question everything and decide if you want to do the same stuff differently, or really do different things.
“The main challenges are falling into traditional models of thinking about selling products… We need a new business process (where) the aim is not to sell but to build a trusting relationship based on understanding each other and building societies together that neither could build alone”.
7. Business [not consumers] in the driving seat
Although consumer interest is increasing, it’s not yet strong enough todrive these trends on its own or make up the entire business case. Business strategy can't completely rely on consumer insight or market research. Bold action and leadership is needed from business to drive this change through to the consumer.
"Consumers will (drive this), but don’t over-emphasize this. Their behavior is usually driven by the media and NGO agenda. They are a real challenge because of the difference between what they say they’ll do and what they actually do. The important thing here is being ahead of consumers "
8. Rise of the (green) opportunity agenda
Numerous recent high profile cases link sustainability more to the opportunity agenda of business growth and new market development, rather than the traditional territory of risk, reputation and compliance. M&S’ Plan A and GE’s Ecomagination are the most obvious examples of companies doing this, in showing how to link your business and strategic priorities with sustainability goals
“The issues are now entering the value driving agenda and companies have started to build the value of their brand using SD.”
“At last companies are beginning to realize the potential economic upside from providing solutions to the major problems the world is facing in climate change, water quality, air quality and chemical exposure et al.”
9. Changing marketing
Sustainable business practices will require (and are already acquiring) new approaches to marketing. Our gurus commented, for instance, on the perception that agencies lack awareness and or a need to shift to see more CSR people being involved in strategic marketing and planning. Some feel more fundamental changes may require a more ideological and strategic shift – such as the rise of a new marketing ethic.
“A unique new sustainable marketing agenda, which needs to be based on integrity, consistency, subtlety and a genuine engagement with consumers.”
“Engagement with consumers around a very different set of values and intangible forms of value.”
10. And the winner is...
GE and M&S were the most mentioned for best practice and leadership – as well as cases that are already commercially benefiting from sustainability. According to our gurus, HSBC and Unilever are the ones to watch. Wal*Mart and Tesco were frequently mentioned, though opinions are split on the green reality of the agenda and more evidence of real results is needed before these can be considered serious contenders. They have the big business buying power potential to make a real difference.
“Marks and Spencer are doing absolutely the best job. HSBC are also good. Wal-Mart are strong on the supply side and the way they use shelf space and allocation to drive improvements.”
Our green gurus see a real shift in business awareness, attitude and buy-in to the green agenda.
Chris Sherwin, Forum for the Future’s Head of Innovation said: “These are fascinating trends that only three years ago would have been laughed at. Leader businesses are starting to show some real and promising commitments here – the question is, will your business lead or follow the crowd?”
Katie Zabel, Communications Officer on 07825 204434 or
k.zabel@forumforthefuture.org.uk
