Blushers or braggers
15 December 2010
This is not a piece about how brands can save the world, but how sustainability could one day save your brand. A company’s failure to embed social responsibility into its fabric and openly demonstrate a commitment to ethical sourcing could one day be its undoing.
Would you use Bing if you knew that it had less of a negative impact on humans than Google? According to the Second Annual Corporate Social Responsibility (CSR) Perceptions Survey by Penn Schoen Berland, 75% of those who read a CSR agenda are more likely to purchase products or services from that company, but only 13% of them are aware of its social responsibility agenda.
Dell, GE and Nokia emerge victorious in the M&M Sustainability Index by showing an open commitment to sustainability. But when it comes to consumer perception, GE, the supposed “poster child” of sustainability, only scores 55% on Maddock Douglas’s perception survey, MapChange 2010. Google appears in a lowly 44th place, yet manages an impressive perception score of 77%.
Adidas CSR report writer Adam Garfunkel cannot believe that the resources poured into CSR reporting aren’t utilised more. “The stories that CSR report data can tell are ripe for marketing. If these departments worked together more, it would be great for the brand and the consumer,” he says.
This gap between achievement and perception is a marketing problem, not just for those ‘doing and not telling’ – the so-called ‘greenblushers’ – but also for the ‘greenloaders’. These are brands that are showing little commitment to sustainability, but are still perceived to be doing so much more by consumers. The risk for greenloaders, such as Google, is that one day they could be held accountable.
Those in most danger are the ‘deniers’, like Gucci Group (ranked 47 in the Sustainability Index), that are reporting nothing at all. The majority of mainstream consumers would not care if two thirds of today’s global brands disappeared, according to the Brand Sustainable Futures survey by Havas Media, for which it questioned more than 30,000 people across nine markets. How can companies expect people to care about their survival if brands don’t care about the people?
“Gucci Group could sink or swim,” warns Havas Media business insight director Guy Champniss. “If it can’t make luxury synonymous with sustainability there will be a clash of ideologies. But the group is in a potentially good position to cash in on the marriage of luxury goods and sustainability when the intangible benefits of status and superiority become synonymous with ethical products and CSR.”
Much to the frustration of those keen to normalise sustainable purchasing choices, the opportunity for luxury brands lies in the fact that ‘ethical’ still equals expensive. When UK frozen food supermarket Iceland turned its products ‘organic’ in 2000, sales dropped by 5.5% in six months. Customers were not ready to make the leap.
But when bag designer Anya Hindmarch released a limited edition eco-shopping bag in 2007, bearing the phrase “I’m NOT a plastic bag” people were seen queuing outside Sainsbury’s stores in London, and in Taiwan, Hong Kong and Beijing “public sales were abandoned... amid scenes of chaos,” reported the South China Morning Post.
As ethical products remain expensive and their qualities become aspirational, luxury brands such as Louis Vuitton (ranked 35) that are wisely investing in company sustainability, could soon be in the perfect position to push these achievements out at brand level.
Studies like Dr Jem Bendell’s Deeper Luxury explain that as the luxury industry expands and becomes more accessible to a wider audience, including China, its brands will have to invest in guaranteeing another level of intangible benefits, such as ethical sourcing and eco-credentials.
Joyously, this also spells good news for environmentalists. “If you look at history, all mass products start off at the luxury goods stage and then slowly reach the mass market,” says Ethical Consumer magazine editor Dan Welch. “This is where products like the Toyota Prius could really benefit from its firstmover advantage.”
But why bother risking an expensive Iceland disaster or investing in expensive reporting when misguided consumer perceptions are building brand equity for free?
“The danger lies in that roughly 10% of consumers will go out of their way to buy ethically, but 50% will punish a company if it lets them down,” says Simon Hodgson, managing director of sustainability consultancy Acona. The Nestlé baby milk scandal, where Nestlé encouraged mothers in the third world to use a breast milk substitute, happened more than 30 years ago, but is still fresh in many peoples’ minds.
Campaign groups are becoming increasingly sophisticated in using brands to bring issues such as the rocketing use of palm oil to the public’s attention. CSR reports can act as a shield for accountability.
“The business case for investing in sustainability is in risk management. If Greenpeace decides to do a deep dive and there are no measurements, the brand will have its BP moment,” agrees Saatchi & Saatchi Sustainability EMEA managing director Niall Dunne.
By the same token, the rewards for those that invest in ‘social equity’ could appear at any moment. “UK retailer the Co-op embedded sustainability in the DNA of the company from the start and when the financial crash hit two years ago, people flocked,” says CSR International chief executive Dr Wayne Visser. Back in 2009, Mintel predicted that by 2020, green practices will influence 66% of consumers when they choose a financial services provider.
Dell wisely predicted this trend and has turned the turgid data of its reports into tangible consumer benefits. Innovative bamboo packaging, for example, helps to bring the brand philosophy alive. “The more we educate customers of the things we have in that space, the more valuable our brand becomes in their eyes,” says head of Dell’s sustainability programme Mark Newton.
But that space has to be right. “The times when these communications have backfired have been when they are unsubstantiated or irrelevant to the brand or consumer,” warns sustainability entrepreneur Diana Verde Nieto. “HSBC launched a campaign on how to green your house. This has nothing to do with its core proposition. A lack of communication between the CSR and marketing department can sometimes be the cause of this backfire.”
Brand building using the core values of sustainability should tackle something relevant to the consumer, such as Walmart’s ‘Save money. Live better’ slogan. This is in keeping with the original brand proposition of this budget-friendly superstore and not a last-minute fterthought, shoehorned into the campaign by eager CSR box-tickers.
Samsung (ranked 27th) has achieved this by launching its PlanetFirst campaign for eco-friendly products using an appropriate media partner. National Geographic provides a context in which the consumer can readily understand the product proposition without becoming alienated.
Ultimately, ‘green’ campaigns, ‘green’ products, and ‘sustainability’ are all ways of saying buy smarter. Progressive thinkers like Nieto see the future of sustainability as an optional marketing entity as short-lived. “In the same way that people don’t talk about ‘new media’ anymore, the same will happen with sustainability. CSR will be embedded in everything the company does.” She predicts it won’t be long before we see CSR reports within the annual report.
Visser predicts death for companies and brands that do not prepare for inevitable legislation. “Brands have been phased out by government regulations in the past and sustainability will do the same. We now have safe food and safe toys. It took time and lobbying and research, but eventually the government says it’s no longer acceptable.”
So, would you use Bing if you knew it was more sustainable than Google? When all consumers are answering ‘yes’, the brands that can effectively market sustainability will prosper.
CAN MARKETING CHANGE THE WORLD?
NO: YOU'RE KIDDING YOURSELF
Dan Welch, editor, Ethical Consumer magazine
“The notion of an ‘autonomous consumer’ who can make ‘sustainable’ brand choices is a fallacy. As long as habitual utilitarian consumption remains the same, consumers will be limited by infrastructure. Governmental campaigns attempting to change behaviour are ineffective.”
Chris Smith, founder, Ecotube
“Reducing a company’s profit is one of the only actions that guarantees a change in working practices. This is where social activists can drive the agenda for a more sustainable society. Greenpeace’s campaign against Nestlé’s use of unsustainable palm oil is a fantastic example of this.”
YES: IT'S ALL ABOUT DESIRABILITY
Freya Williams, senior partner, OgilvyEarth; planning director, Ogilvy & Mather New York
“Brands have a major role to play in making sustainability cool, sexy, fun, aspirational – all things to aid the transition to a sustainable economy. The Coke recycling campaign we did in Asia conferred cool onto the act of recycling in a way that 20 government PSAs couldn’t. Nike and Google should be using their authority to drive the agenda forward.”
Jem Bendell, professor, Griffith Business School; Authentic Luxury Network founder
“The power of luxury to influence attitudes is particularly powerful in Asia. In Tokyo, one study found that 94% of women in their twenties own a Louis Vuitton bag. So, by enhancing its sustainability profile, Louis Vuitton can influence women’s outlooks and enhance its own brand value.”
The marketing world has moved on from the debate about ‘greenwashing’, but not all marketers have learnt their lesson. CSR reports are becoming more and more common, but if brands hide behind their words and are hazy about their commitments, these reports are in real danger of becoming the new greenwash. For M&M, examining what the top 50 brands are doing in the sustainability arena was important to establish the benchmark for other brands to follow, but it quickly became evident that “openness” deserved most recognition.
* These 50 brands have been ranked according to M&M research into reported sustainability achievements in carbon savings and water usage. This has been combined with an ‘openess’ score based on commitment and data transparency.