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by Anthony Kleanthous, Senior Policy Adviser, WWF-UK
June 2007
As I write this I find myself in the midst of a revolution in sustainable consumption, driven by a powerful combination of moral conviction and hard cash. Sustainability has become very big business.
A couple of years ago, I embarked on a project with my old friend and predecessor at WWF, Jules Peck (now a senior adviser to the Conservative Party) to find out whether and how sustainability could create positive and lasting value for shareholders. Could green really turn to gold?
We trawled through mountains of reports, interviewed 50 industry leaders and conducted a quantitative survey of brand and marketing professionals in major agencies and brand-owning companies. The resultant report, called "Let Them Eat Cake: Satisfying the new consumer appetite for responsible brands," called for a new approach to business in which sustainability would act as a positive driver of brand and shareholder value. Sustainability, we argued, could act as a differentiator between mainstream brands, encourage loyalty and even change people’s perceptions of themselves.
In "Cake" we showed that the majority of mainstream consumers would buy green if the improved environmental and social performance could be "built in" to their regular brands for free, and effectively communicated. (See our Ten Point Plan for Sustainable Brands below.)
At the time, our message was received with a mixture of fear and skepticism; brand owners were terrified that, by drawing attention to their CSR activities, they would be shot down for not being perfect. The marketing press viewed the whole sustainability agenda as inherently anti-commercial, and refused to cover it.
A year after publication, the industry has tipped, at least in the UK. Recently a leading publication, Marketing Week, hosted a heavily over-subscribed conference on Green Marketing, attended by senior marketers and brand managers from many of the world’s leading corporations. Star of the show was Britain’s Marks & Spencer, whose "Look Behind the Label" campaign, in which customers were told the CSR stories behind some of its key product lines, was "its most successful ever." The company's share price has soared on the back of stellar sales and unprecedented brand reputation scores.
Encouraged by this success and inspired by Al Gore’s Oscar-winning documentary film, "An Inconvenient Truth," chief executive Stuart Rose recently launched a $390 million program of change called Plan A ("Because there is no plan B"), which sets out clear positions and targets in five key areas. Consumers and staff have been heavily involved not only its conception, but in a comprehensive communications campaign that includes in-store materials, full-page advertisements in the national press, a web site and a highly effective PR campaign.
Now that green is the new black, many companies are desperate to follow M&S’s example. The moral argument is won; the business argument is won. All that remains to figure out is how to do it effectively, affordably and credibly.
Of course, the backlash has already started: Fair Trade creates inequities amongst local growers; offsetting fuels guilt-free consumerism; sustainable palm-oil kills orangutans. How can any company navigate its way through this minefield of conflicting concerns and fuzzy science?
One of the world’s largest and most sophisticated brand-owning companies, Unilever, may have the answer. It has learned much from its acquisition of Ben & Jerry’s and the runaway success of Dove’s "Real Beauty" campaign. Now, it has developed a detailed and comprehensive process called "Brand Imprint" to embed social, economic and environmental strategy into category planning, brand development and marketing plans. This ensures that the sustainability agenda is led from within the core business, rather than being a merely a corporate- or compliance-led agenda. Several of Unilever’s brands, including Lipton, Comfort, and All Small & Mighty, have already been through the brand imprint process, with some impressive results. Unilever’s CSR director, Santiago Gowland, cites the example of how All Small & Mighty’s move to a more concentrated formula helped it to gain preferential marketing treatment from its biggest customer, Wal-Mart.
M&S, Unilever and other major companies such as Tesco, GE, Interface and Philips are learning how to build more sustainable brands. Others — afraid of the pain that brings the gain — continue to peddle dubious offsetting schemes and incidental philanthropy to increasingly savvy and cynical consumers. To understand the difference between these two approaches is to understand the difference between "green" and "greenwash."
The Ten Point Plan for Sustainable Brands
- Understand your brand. Conduct a "brand perception audit" to understand and define your brand’s true personality as it exists in the minds of both employees and consumers/customers. Include environmental and social elements in this and subsequent tracking studies. Consider the inherent qualities of your product or service to see how it might affect the environment or society.
- Understand your consumers and how their relationship with sustainability affects their esteem for your brand. Understand how your company provides "social utility" to your customers. Observe and understand the values, beliefs and lifestyles of your present and potential customers.
- Get your house in order. Audit and improve your internal processes, from office management to production and logistics. Minimize power consumption, water use and waste. Screen your suppliers for sustainability. Use environmentally-friendly cleaning products and office supplies.
- C(S)R: Handle with care! The corporate responsibility function should act as a driver of innovation, using its combination of sustainability expertise and broad strategic view to tease out consumer insights. Rather than adopting a narrow focus on the measurement and reduction of risks and impacts, CSR should pay much more attention to opportunities, as Procter & Gamble has begun to do with its Corporate Social Opportunity (CSO) unit. Even then, CSO should be seen as a short-term change management role intended to do itself out of a job as soon as possible by making CSO part of the DNA of the brand and values of the company. Rather than seeking to "own" sustainability, these units should work with the heads of the core business functions (including sales and marketing) to develop key performance indicators of sustainable business practices. These indicators should then be used for setting objectives and targets, reviewing performance and determining remuneration and career progression.
- Innovate. Identify new and efficient ways in which your brand can help consumers do what they wish to do or feel how they wish to feel. Re-tune the corporate values and brand to resonate with attributes and attitudes that you see emerging in the consumer "brainspace" on sustainability issues. As your product or service progresses from inception through design and manufacturing, constantly query its sustainability at all levels, from the way it is sourced, produced and packaged to the impacts of how it is used, and the way it is destroyed or recycled at the end of its life. Think of new ways your existing products or services might do useful jobs while enhancing people’s perceptions of themselves as environmentally or socially responsible. Think how changes to these products and services might make them even more useful and responsible.
- Motivate. Review the way in which marketing and branding staff are rewarded. Make at least part of their annual performance review dependent on how they perform their job in line with company/brand values.
- Collaborate. Create multi-functional, multi-skilled teams that include personnel from all relevant functions, including marketing communications, investor relations, product design/development, brand strategy, financial planning and analysis, and corporate responsibility.
- Communicate. Once you have done all of the above, communicate externally. If you are open, honest and heartfelt, then a bit of sniping here and there from your critics will just be grist to your mill. Think about how consumers interact with the new media landscape. Integrate your messages through the most appropriate channels, even if you have to invent those channels yourself.
- Sign-up your consumers to the sustainability journey that your company needs to take – use them to create and ride the sustainability wave. Ensure that consumers come away from every interaction with your brands, products and services with as positive a self image as possible. If your brand makes them feel like better people as it does its main "job," then it will thrive.
- Measure, monitor and report continuously. Develop ways of identifying, measuring, evaluating and reporting the various elements of brand value, including those that relate to sustainability, so that they can be used by managers as indicators of performance. Specific targets may then be set to sit alongside shorter-term ones and be taken into account at staff performance reviews.
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