CORPORATE RESPONSIBILITY: Telling the story of going green

A company's reputation is no longer simply defined by the quality of its goods or services. Alex Black looks at how green credentials link to a firm's bottom line.

Our climate is changing. The extent to which industrial carbon emissions, increased energy consumption or deforestation are responsible for this is still a hotly debated topic. But just try getting anyone to see the sudden temperature drop and biblical rainfall of May’s second bank holiday as ‘normal’ weather.

British consumers have been dimly conscious of the green agenda for a few years, but they are now more environmentally aware than ever.

One reason for this is the recent elevation of the environment to the top tier of the news agenda. If you had scanned the nationals for mentions of the phrase ‘climate change’ in 2002, you would have found about 500. Were you to have repeated the exercise last year, you would have counted close to 3,000. In the first half of 2007 alone, the number is already approaching 2,500.

Throwing an empty drinks can into a recycling bin used to assuage people’s consciences about their effect on the planet’s welfare. Not any more. They want to reduce their carbon footprint in as many ways as they can, including how they spend their disposable income.

This presents both a threat and an opportunity for businesses. If companies can tell the story of how they are reducing their impact on the environment, they will gain a march on competitors. If they do not, they risk ­being ­ignored by green-savvy shoppers.

The tipping point for consumers’ grasp of climate change is relatively ­recent (branding experts say the end of 2006/beginning of 2007), so it is too early to provide hard statistical evidence of the effect on sales or profits yet. But consumer research suggests it is easy to make a convincing business case

Take the Millward Brown study into consumer attitudes in the UK and US commissioned by WPP at the end of last year. The report, ‘Reputation Z’, found 27 per cent of UK consumers were more likely to spend their cash with a company that was carbon neutral than with one that was not.



A joint study published by Landor, Penn Schoen & Berland and Cohn & Wolfe last month found further evidence that a company’s green credentials affect its ability to sell. Eighty per cent of Brits questioned in the survey said they factored in ‘green­ness’ when weighing up brands. Sixty per cent said they would spend more on a product that would save energy. And all ­respondents expected products made by companies perceived as ‘green’ to be of a higher quality than those of non-green rivals and, crucially, they were happy to pay extra for them.

For companies that live or die by outselling their rivals, this is something to be taken extremely seriously. In the white goods sector, says Ian Hagg, public affairs director at Consolidated Communications, the products of green firms are considered cutting-edge, ­inno­vative and modern. That means everything else is tired and outdated.

So how do companies build a green reputation? Not overnight, certainly.

‘Take the example of BP,’ says Hagg. ‘When it changed its strapline to ‘Beyond Petroleum’, it wasn’t just about one product. It remodelled large parts of its business. But it took consumers a long time to buy in. BP only managed to get them to do so through constant ­explanations of what it was doing.’

Although it will not fit every business, there are basic guidelines that can be followed to build a green reputation. Set out a green vision for the whole business, produce a step-by-step programme for achieving it, and make sure employees understand it.

This will give companies a vital per­iod of grace, says Cohn & Wolfe MD ­Geoff Beattie – a few years in which to produce tangible and demonstrable ­results. ‘If companies produce a convin­cing plan of how they will reduce their impact on the environment, consumers are prepared to give them credit for coming out and saying it,’ he explains.

The next stage, says Beattie, who is joint head of C&W’s new global green issues advisory practice, is to show how the plan has been implemented. ‘This is where PR is really needed,’ he says. ‘Up to now, marketing and branding has been at the forefront of positioning companies as green. The next stage, the telling of the story, is where PR comes in.

'Explaining exactly what carbon neutral has meant and making sense of companies’ contributions to cutting emissions – that is done through PR.’

Business strategists are also starting to understand the green effect goes beyond consumers parting with their cash at the till. Companies are becoming increasingly inven­tive in the ways they are reacting to the green agenda.

Personal finance firms are offering green mortgages and British Gas is promising buyers of its house insulation products up to £100 off council tax bills.

Washing powder brand Ariel recently ran a ‘turn to 30’ campaign to encourage consumers to wash their clothes in cooler water than normal. A 30-degree wash cycle uses less electricity – and means lower bills. But the tactic also portrayed the product as cap­able of cleaning at a lower temperature, and therefore as ‘better’ than rivals.

James Wright, Trimedia Harrison Cow­ley’s director of CSR, says many people will buy a product in a bid to ‘do the right thing’: ‘Look at the Fairtrade brand. The USP is that by spending money on it, consumers are doing their bit for a good cause. It is one of the most successful ethical brands of all time.’

Although Fairtrade’s cause is not climate change, the example is a good one. The concept of fair trade runs through the entire business and is not just a sales gimmick.

Any company that still thinks it can use a few energy-saving lightbulbs in HQ and badge itself as environmentally friendly is in for a shock. ‘Greenwashing’ might have ticked a CSR box two years ago, but not now.

Besides, argues Wright, this is not a short-term issue. Weaving environmental policies into a long-term, holistic business plan is the only way to gain real benefits. As a report by carbon credit trading outfit Eco­Securities concludes: ‘The inclusion of climate change concerns as an economic driver affords new opportunities for businesses to differentiate themselves and grow.

For the rise of green brands to continue, more companies need to develop green credentials, and keep consumers informed as they put them into action. Sadly, neither of these moves will guarantee a decent May bank holiday.

Key media moments in the green debate

September 2006 UK release of Davis Guggenheim’s documen­tary An Inconvenient Truth. The film is former US vice-president Al Gore’s rallying call for the world to take climate change seriously.

October 2006 Economist Sir Nicholas Stern releases the Stern Review, which claims unless action is taken on climate change, up to 200 million people could become refugees as their homes are hit by drought or flood. Tony Blair agrees, saying the consequences of inaction would be ‘literally disastrous’.

November 2006 Stop Climate Chaos’s ‘I Count’ rally in Trafalgar Square attracts a crowd of over 25,000 to watch KT Tunstall and Razorlight. Mir­anda Richard­son and the Bishop of Liverpool, among others, reinforce the message that something needs to be done.

January 2007 Marks & Spencer announces ‘Plan A’, a £200m five-year eco-plan. M&S chief executive Stuart Rose pledges the chain will become carbon neutral, send no waste to landfill, extend sustainable sourcing and ‘help customers and employees live a healthier lifestyle’ by 2012.

March 2007 Conservative leader David Cameron unveils green proposals that include levying fuel duty on domestic flights and charging progressively higher taxes the more people fly short distances.

July 2007 Next month’s Live Earth concerts will be held around the world. Hoping for a global broadcast audience of two billion, organiser SOS aims to ‘engage people on a mass scale’.

 

 

 

 

 

 


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