Keith Weed, the Chief Marketing Officer at Unilever, believes our increasingly resource-constrained world is making separate marketing and sustainability strategies redundant. Business growth needs to be both environmentally and socially sustainable, and to achieve that marketing and sustainability functions need to work together. It’s a bold argument, and one that we explore as part of our ongoing theme of integrated decision-making.
When Unilever committed to doubling its revenue whilst halving its environmental footprint and increasing its positive social impact, it arguably made the clearest commitment to sustainable growth of any major global organisation. The genesis of that plan can be traced back to 2009, when the Unilever CEO, Paul Polman, added sustainability to Keith’s marketing responsibilities.
Our November Forum started with Keith's views on the need to integrate marketing and sustainability, followed by a moderated discussion and audience Q&A. We explored issues such as;
A growing number of companies are defining themselves as having a purpose beyond selling products or creating shareholder value. Why are companies redefining themselves in this way, how specific do these statements need to be to be meaningful, and which corporate statements does the table admire?
Key questions raised/asked to stimulate conversation:
1. Is a core purpose fundamental change within the business or just repackaging of how you communicate what the business is doing?
2. Why are companies being generic rather than well defined, because If people aren’t clear what the purpose is how is it driving change?
Defining purposes / businesses work in broad areas:
o It is hard to achieve a balance between broad and well defined.
o When businesses are so broad and complex it’s difficult to find an all-encompassing purpose.
o It’s difficult trying to define generic purposes so that there is a shared understanding.
o The purpose has to be beyond the products you sell, and sometimes it can be difficult relating the two in a meaningful way.
Stakeholder and consumer engagement
• Stakeholders have already formed a view of what the company’s purpose is, which can be hard to change.
• Consumers engage more with the brand than the company – so it can be hard to engage them with the company’s purpose.
• For B2B it is difficult to have your own purpose as your influence on client’s purpose is limited.
• Different stakeholders will take different meaning from the purpose.
• Older generations struggle with the new concept of having a purpose.
• Hard to make companies relevant to different geographies, nationalities, and ages.
• Some business sectors, such as financial services, have a trust issue.
• Trying to figure out what will shift the needle internally about the sustainability issue is hard.
• Actually making your colleagues clear on what the purpose is about is difficult as people don’t always take away the same meaning, especially if it’s generic.
• Talent is going to be a real issue. Young people especially, are inspired to work for organisations with a purpose. Hitting financial numbers isn’t motivating enough, you need something more.
• Thinking like and seeing through the eyes of the stakeholder about the companies purpose can help to create a clearer definition. Think of it as a contract of what you will deliver to that stakeholder.
• Engage the employees, make sure there is shared understanding and they believe in your company. They are the ones who will then engage with consumers and reinforce that message.
• Building the brand inside out and having a strong company culture is vital.
• Segmenting groups i.e. into millennials, to understand and deliver to your market better.
• Design products that don’t make consumers feel guilty or negative i.e. that by using it they’re taking something from someone else.
• Create a strong community atmosphere and people will want to work for you.
• A degree of ambiguity and fallibility in the meaning of the purpose is not an issue as long as it’s still driving change.
• Johnson and Johnson “Our credo” is still relevant today. Their core narrative was around a purpose and the employees acted as ambassadors. That’s how the business was founded.
"Tell me I'm a consumer, and I'll look out for myself. Engage me as a citizen and I can help you change the world." This table will explore how pioneering businesses are starting to provide opportunities for people to participate and express agency beyond the act of consumption, and how and whether we can do more.
• ‘Being a Citizen is too hard.’
• ‘I don’t want to be a Citizen all the time.’
• ‘But I am a Consumer’ – people think of themselves as Consumers, and think this is human nature. This is symptomatic of an over-riding lack of faith in humanity which seems to be present among the Crowd community.
• Changing behavior is hard and takes a long time
• Too much lazy received wisdom in the industry: Consumers don’t care, Consumers need it made easy, Consumers only want the best for themselves, etc
• If we don’t trust people and believe in their potential and instead declare them as unreasonable and lazy consumers that have to be convinced by laying to them, we will never solve these issues.
• Doing sustainability by stealth – e.g. Birds Eye Fish Fingers – is not necessarily something to be proud of
• ‘Changing Consumer Demand’ needs to become ‘Treat people with respect as Citizens and they will care and will participate’
• Being a Citizen means being creative and engaged in participation
• Don’t be a Consumer in all your life spheres is not the same as ‘Be a Citizen in all the time’. There is place for all individual’s roles and it’s important you aren’t a Consumer all the time.
• Marketing and brands need purpose – sustainability needs to be at the heart
• If you have this, you can think of people who buy your products as your collaborators in fulfilling that purpose – not outside looking in, but standing alongside you – and this makes you treat them differently.
• Research shows that people’s natural motivation to participate and their values about environment and community is significantly undermined when talking to them as Consumers – so the biggest opportunity is to engage them as Citizens and create a more sustainable future together.
• Feed the individuals’ feeling of being a ‘good citizen’ when eg. they recycle by offering more opportunities to engage and take action. Make people care about your issue by engaging them as citizens – not lazy, stupid consumers.
• Sticky issues like food waste could be areas where a new approach needs to be tried.
Examples of #CitizenShift
• Abel and Cole delivered food with recipe and encouraged conversation about recipes among customers (to avoid food waste)
• National Trust trying to treat members as participants in the cause not just consumers of membership as a season ticket product
• B&Q StreetClub
• M&S beach cleans
Influencing how consumers use resources cuts to the heart of how businesses can build value whilst reducing their environmental impacts. Unilever’s work on reducing water use in showers, and Anglian Water’s “Love Every Drop” campaign are good examples. What other examples are there, and can we start to draw conclusions on what works?
- How do you measure consumer engagement/impact – short, medium and long term?
- How do you encourage a consumer to change an activity they enjoy? E.g. binge drinking or long showers.
- How do you upscale pilot studies?
- How do you prevent the novelty factor from wearing off? How do you sustain behaviour change?
Notes from table (b)
How to make marketing more purposeful? Why is it important for brands to be doing this?
• There is a need to make messaging simpler to incentivise action. We also need to make messaging more relevant to specific and indeed incremental actions
• Consumers often disengage, not wanting to be “preached to”. We need to make it easier to nudge people in the right direction
• Using the example of the Igloo “freezing is good” campaign, which could reduce food waste by up to 50%, the point was made that consumers care most about the tangible benefits, including monetary savings. Empirical evidence was referenced suggesting only Dutch consumers cared about sustainable outcomes in informing choice
• The real crux of the question is not how to get consumers to change their behaviour, but get them to change it for a significant length of times – 25 days or more
How to effect consumer behaviour change
• There is a need to find out exactly what is driving costs and create a personal benefit around these consumers costs
• There is also a need to create “cool” or “halo” effect around consumer behaviour change. Action needs to be relatable to the “grassroots”, being both aspirational and accessible
• Similarly there needs to be a degree of social proof, and peer to peer dialogue in order to embed change and create an informational feedback loop. In a nutshell, in order to successfully drive change, brands need to make it relevant to the target market identity.
• Brands can borrow from the NGO and charity playbook in driving social change through social media. The IceBucket challenge was referenced as an example of how movements can galvanise behaviour change.
Examples of best practice
• Unilever’s work with laundry detergent consumers in developing more water efficient products was highlighted.
• M&S Shwapping campaign and H&M sustainable fashion efforts were highlighted as campaigns which energised and empowered consumers
• Innocent’s “taste good, feel good” campaign was highlighted as an example of a campaign which linked “self” with “social benefit”
• Coke’s engagement of Ideo to crowd source ideas to increase consumer recycling rates, and the importance of crowd sourcing more generally as a recruiting tool to issues was referenced
• There are opportunities to create social change at scale online. The example of Uber and AirBnB, which have largely online driven business models and have effected huge consumer change in the transport and leisure markets were referenced.
Is there a tension between access and ownership of a brand’s products?
• The example of B&Q’s Street Club was referenced as best practice of how the brand, and Kingfisher more broadly, has empowered its customer base through fundamentally changing its business model, granting access and ownership in a sustainable way
• The point was made that consumers in developing markets seek ownership as proof of social status, and models which sought to remove ownership in favour of access were not as applicable, particularly in Asian markets. It was suggested that the way to incentivise behaviour in these markets was to highlight Western middle class behaviours as a leadership example.
Are we reaching a demand tipping point? Is sustainability want consumers genuinely want?
• Consumers are conscious and aware of waste, but not necessarily sold on the need to fundamentally change behaviours
• One option is for Government intervention to introduce pricing mechanisms to force behaviour change or create a financial incentive to do so
• There is a problem with “category” products, particularly alcohol, as consumers don’t want to think about sustainability concerns at the point of purchase.
• The example of Kenco coffee selling product in refillable jars was cited as a method to make sustainability more attractive to “category” product consumers
Biggest challenges and opportunities
• Brands could borrow from social media tactics: the example of click baiting and “lifehack” lists were cited
• There is a need to engage on sustainability at every consumer touch point
• Brands need to “live” as well as “talk” sustainability
• Sustainability needs to be better aligned with other marketing activities of brands and corporates
Red flags (warnings)
- If employees don’t get it/don’t believe in it, it won’t happen/consumers won’t get it.
- If you can’t make it simple/tangible, people will not understand it/relate to it.
- Do brands truly understand who they’re interacting with?
- Do brands share enough information with the public and each other?
- Collaborative projects – help or hindrance? Doesn’t give brands a competitive edge.
- Insight, more regular communication and integration - connect consumers with the product and its impact. Co-create rather than top down approach.
- Find out users current understanding of systems around them.
- What’s the benefit? Don’t sell the CSR benefit, sell the product benefit, giving people control, let them know where their money is going.
- Lower the barriers increase the trigger, interact with consumers.
- Compare people against their peers, drive social norm, everyone wants to be in the ‘good’ crowd.
- More or less collaboration - should there be one single portal for utility measurements? (water, gas, electricity)
- Should brands communicate their products as ‘sustainable’ or as ‘cheaper’?
- Instil a sustainable living without the consumer knowing – make products sustainable by default, take the choice away from the consumer as education is tough for 7 billion people – the new passive consumer?
- Keep it clear (Anglian Water) educating customers what should and shouldn’t be flushed down a toilet = 80% reduction in blockages in Peterborough, worked with community groups.
- Smart metres: EDF ran trials where perceived savings were £70 actual savings were £0
- Using pictures instead of pounds saved: EDF - smiley faces on smart metres had biggest effect. Anglian Water use fish spilling out over buckets in terms of daily water use, makes an extra 20% efficiency – next step is to explain to consumers how they fit into the water cycle, where the water comes from, what’s the state of the environment where its sourced.
- Baileys (in the US) consumer activation, set up trucks on nights out where you could have your hair redone, makeup touched up, or get a selfie with friends – highlighting the effort to stay in control, enjoy the moment and don’t drink too much alcohol.
- Lynx compressed deodorant cans: people thought they had less deodorant in and that they were losing more spray when they pressed down – consumers wanted the same sensation as the old cans.
Perhaps it’s a sign that social business is moving from specialism to the mainstream, but a growing movement is rejecting “sustainability” for being ineffective. This table will begin by sharing their personal experiences of what does and doesn’t work with internal and external stakeholders, and discuss the language and techniques that connects with non-specialists.
- A lot of negative attitude towards sustainability inside the company. It’s a loaded term that comes with a lot of assumptions.
- It is a term that has so much meaning, it becomes meaningless
- CSR has too many negative connotations and sustainability is associated with this
- When you use the term sustainability, you are then required to qualify what you do
- Don't hear about companies using or promoting sustainability internally, in a positive way
- Internally, sustainability is seen as burdensome. As it has its own department, it has separate costs and is seen as an add on
- Need to be able to measure sustainability progress quantitatively so that success and progress can be measured
- After using it, you spend the next 20-minutes explaining its not what that they think
- Its meaning can be too broad as it is used too much
- Its use as a profession or line of work comes with the connotation of the person being a tree hugger
- It is more about how you use the word rather than what it means - see Dyson example
- The more we are primed to think as consumers, the less likely we are to care about sustainability. Need to think of ourselves more as citizens.
- Should package sustainability as trying to create value by addressing business value drivers
- Need practical examples as people do not get abstract theory
- Need individuals to change business. Visionaries. CEOs for example. Need someone who believes in it to drive the effort. Top down approach.
- Identify where people/departments are integrating ‘sustainability’ so that they can implement what it means to them. They have to define sustainability.
Dyson - using the term 'sustainable engineering' so that it has more meaning. BBC job role - sustainable production.
BAT - securing supply and sustainability seen as competing aims
Network Rail - explaining that it involves environmental, social and economic issues
Green Party - on the outside of society. Should be an integral part of each party. Reinforcing this view of sustainability as being on the periphery.
BUPA - new CEO reframed what they are trying to achieve with sustainability. Goes right to the heart of the company's purpose.
BBC employee - "sustainability is a choice between trees and wifi"
- Relate sustainability to specific value drivers for that business.
- Regulation will help push sustainability up the agenda. Will it only drive the biggest companies?
- Small companies using sustainability as a differentiators
I. Key Questions
• Connecting with the audience. Audiences often do not understand what is meant by sustainability. How can we connect with them?
• Terminology. Does the actual term used to communicate sustainability messages matter? If practices, strategy and approach are appropriately aligned then does the naming convention really make a difference?
• Measurement. How should sustainability be measured?
• Cynicism. What impact does cynicism have in terms of corporate involvement or in general?
II. Language choices
• CSR. The term sustainability is too vague. Consequently, sustainability plans sometimes evolve into merely efficiency plans. Responsibility is a key term for sustainable activities and maybe the term CSR shouldn’t be dropped just yet. Until we know what comes after CSR, the terms used to rally people and motivate them should not change.
• Motivation. The focus of marketing products should be based on their improvements and benefits, not on their sustainability impacts.
• Alternatives. Other key terms worth consideration: resilience, engagement and to thrive.
• Clear terminology. Clear terminology is needed to drive motivation, though this may vary depending on the objectives (e.g. social, environmental, etc…). Language should be interesting and inviting, in order to provide a rallying point and motivation for people. It’s also important to provide a sense of the context and direction, which can ultimately lead to a sustainability framework down the road.
• Climate change psychology. ‘Engaging with Climate Change: Psychoanalytic and Interdisciplinary Perspectives’– by Sally Weintrobe http://www.karnacbooks.com/product/engaging-with-climate-change-psychoanalytic-and-interdisciplinary-perspectives/33373/. Don’t overwhelm people with sustainability messages. If the message focuses on huge problems that are likely to lead to crises, people tend to get overwhelmed and bury their heads in the sand.
• Five capitals model. The five capitals model provides a holistic view of sustainability, not just environmental concerns, for example. In this situation, meanings are more clearly articulated. https://www.forumforthefuture.org/sites/default/files/project/downloads/five-capitals-model.pdf
III. Definition approach
• Consistent with vision. What is ultimately the vision of sustainability? To support a planet that is restorative. The definition needs to be clear and applied whenever the term is used.
• Flexible & tailored. Tailor sustainability terms to the business. Language in a business’s strategy tends to be pragmatic and incorporated into the company’s decision-making. However, in communications with clients and employees this will require a different set of sustainability terms.
• General public. The general public’s interest in sustainability has peaked. Increasingly, the vocabulary used at present centres on resilience, efficiency, risk management and cost savings.
• Investors. Investors’ interest in sustainability is also poor to date, with ever greater focus on short term financial results.
• Message opportunities. Greater interest in sustainability and longer term goals can often be found where there is a market force or legislation driving it. For example, in the building construction market investors do not have an incentive to build for the long term, unless it will impact customer sales. Customers may be interested in the buildings sustainability due to day-to-day cost savings or increased rent caused by new environmentally-geared legislation on buildings.
• Literate vs Layman. There are 2 groups of people that need to be considered when selecting language:
1. the literate audience
2. general consumers of sustainability messages
Both groups require their own set of terminology.
• Consumers. Consumers are not always interested in engaging with sustainability messages with every product. Although, costs and other factors always tend to be part of the decision-making process when purchasing. In the latter situation, sustainability messages still need to be factored into the product’s proposition, although this may be done by highlighting other linked benefits.
• Employees. Internal business communications – Areas of conflict between corporate groups can benefit from taking an objective approach when evaluating the future and company strategy, which sustainability readily offers. For example, review supply chain priorities whilst reflecting on how to mitigate disasters.
• Sustainability jobs. Sustainability teams / officers are not solely responsible for meeting sustainability objectives; it must be a collective effort. Ultimately, it rests with the CEO.
V. Communication options
• Top down. Internal programmes for sustainability education and measurement also tend to be useful. When the message and support come from the top down it tends to push this focus down the business lines.
• Bottom up. On the other side of the coin, a bottom up program can be especially effective as it allows a tailored approach to training for each department or team. Sustainability is not only about knowledge, but the relative skills needed to implement that knowledge in each department.
• Message adoption. Whichever terms are used as a rallying point or whichever dissemination approach that is taken, they must also be able to fully integrate into businesses’ activities in order to be effective.
VI. Measurement approaches
• Metrics. Metrics and KPIs in company scorecards are a good way to measure sustainability in a business.
• Corporate goals. Another measurement that has proved successful in the pass with jointly setting corporate and personal goals with employees. With these sorts of sustainability targets employees tend to be more engaged and perform better.
• Gamification. In future, it might be worth incorporating elements of gamification to bring an element of competition to reaching such goals.
• Innovation. New ideas in a company should also be measured against innovation metrics, as well as the traditional measurements
Traditionally, marketing grows a business, sustainability manages societal and environmental impacts and external affairs controls the message. If we’re entering a new era of authentic business, where a spotlight is increasingly shone into an organisation, is there now a case for combining these functions under one person – as is the case at Unilever?
Notes from Table (a)
Where are we now?
• One group member (Unite) already had a combined structure – though it was still early days. The other member companies still had a traditional siloed structure
Do we agree the premise?
• All participants - companies and consultants - agreed that combining the three disciplines should be the goal and direction for travel. The new ‘BAU’.
• However, there was a question of whether just these three areas should be connected – what about IT and sales? IT and marketing are also increasingly converging. And isn’t sustainability a collective responsibility of all parts of the business? But it was agreed that “you can’t combine everything!”
• Is it about collaboration or merging? Depends on the nature of the company
• There is potentially a challenge between the short term nature of much marketing activity and the long term perspective of sustainability. However taking a brand perspective - for example John Lewis - makes convergence more compelling. It was also suggested that the most short term stakeholders were often the shareholders.
• There was also a recognition that ‘one size doesn’t fit all‘- even within a sector. For example the pathway for John Lewis and Tesco may differ, based on target audience, culture and other criteria. More affluent consumers with higher disposable incomes may respond better to sustainability messages, whereas broader audiences may be less altruistic and more price sensitive.
• The group also wondered whether combined functions might have helped prevent Tesco’s recent difficulties – i.e. if the company’s sustainability functions had been more strongly connected with marketing and corporate affairs.
Should marketing take the lead?
• It will differ by company. Just as the CEO can emerge from any part of the business, so this new combined role could emerge from a strong candidate in any function.
• It was recognised that there may be some internal resistence - but that at the end of the day everyone should benefit.
• For example sustainability could benefit from being connected to marketing. “A green agenda may only take you so far unless your message contains a consumer benefit”, Sustainability needs to be better marketed.
• For the consumer It is Important to have confidence in knowing what their buying is safe. Brand equity with sustainability.
• Brand equity should be the start point. It is the common platform for all three disciplines – linking to all audiences and stakeholders including consumer, corporate and communities.
• If shareholders’ perspective tends towards short term vs. long term sustainability this becomes a good reason for external affairs to be core to this new ‘triad’ structure.
Conclusions: What will we do differently after attending this event?
• Combining sustainability with marketing - and internal and external affairs – makes good sense. “Sustainability needs to embedded: built in, not bolted on”. Therefore it should not be a self standing unit (CSR), but core to the business.
• “At the end of the day it’s about collaboration. All I can do is talk to other people about it, but it’s the action, not just what is said in words”
• “We should think about how we use digital channels to drive the agenda.
• “We should be consistent when setting objectives across the business”
• “Look at brand equity. Work on we already do and improve on it”
Final thought: This is an important change initiative for any organisation.
• A change in structure, A change in thinking....and above all a change in behaviour .
• It’s about change from SILOS to SEAMless (Sustainability External Affairs Marketing).
Notes from Table (b):
Question: Do you think it has to do with sector? Where some sectors like retail are very consumer facing like retail, and others like utility and finance are not.
• Yes, in a consumer facing business it is, but if you’re not, money tends to get funnelled into other places.
• Depends on the company in a specific sector. For example one of the table members previously worked for a large oil company, which had a campaign trying to influence the consumer. Also was suggested that banks although not be specific to marketing, there are conversations in the board room that build relationships in the way that a marketing campaign would.
• Was suggested that Marketing tends to be the engine room of a company where sustainability if more cross functional.
• Table member works for a power distribution company and said because they were somewhat of a monopoly they don’t really sell to consumers and marketing isn’t integral because everyone needs the product, whereas sustainability is driven heavily across the business.
• Matters if the company is a B2B or B2C company, B2B would not need such a large marketing role in the business.
Question: Marketing at its roots is noble and a force for good. If you bring marketing, sustainability, and external affairs together are you being more noble? Would the combination of departments really help?
• Yes, consumers’ are asking questions and being more conscious, it is important to be more responsible (noble) as a business and communicate more clearly within to provide a better product.
• The marketing team should be able to anticipate what a consumer needs and wants because they don’t always know themselves. This providing a more responsible product for the consumer.
• Need to drive the idea that less is more with sustainability and marketing teams. In the end the consumer isn’t buying the drill, they are buying the hole in the wall. This will create a more sustainable agenda.
• Ask customers what their needs are and go to strategy to figure out how to drive it across the agenda. Wouldn’t necessarily be marketing but “customer improvement”
• Language is at issue. Marketing can get lost in translation when it goes through different departments
• Different scale marketing agendas (global & local) translates very differently
• Need to imbed strategy, sustainability, and external affairs in core business so it doesn’t need to be championed EX: Getting rid of CSR department
• Find a motivating purpose – something that everyone connects with and then you’ve found your noble cause
o This is difficult because people are always changing, and new noble causes are always cropping up.
• Need a multi sector champion so that issues really cross sectors
• Social mission roles can help integrate into different departments
• Much more probable that there will be integration between sustainability, marketing and external affairs in consumer facing organisations because marketing doesn’t always fit the same role, and need to implement more strategy rather than marketing.
Question: If you work in an integrated sustainability, marketing, and external affairs role, will it lead to nobility?
• Skepticism, around the table.
Question: do you feel that marketing can be seen as a PR tactic to consumers?
• No, marketeers are very conscious of that risk and don’t want to have a commercial claim that can’t be substantiated. They are very mindful of making claims and not deliver because consumers are the biggest skeptics and it is very easy to lose credibility.
Many companies see carbon as part of good business management, with little reason to engage their stakeholders on their reduction programmes. But is a trick being missed here? Are there examples of how operational carbon reduction, or low carbon products, can create stickiness with customers, employees, or investors to add to the business case? What language works?
- Successful project where there has been a focus on the other benefits of project. For example a solar farm where wild flowers are planted in the surrounding fields and engagement with the community in relation to land use & biodiversity. The wild flowers also have the benefit of locking up carbon, but people in the local community don’t understand this concept. It is not as engaging as campaigns such as saving butterfly populations
- The hole in the ozone layer was engaging – people could understand this and the potential impact it had on their lives. Actions and behaviours were adapted as a result.
- Carbon is intangible to the majority of the population
o For example, Shell’s latest campaign billboards depicting large red balls representing carbon emissions
o Variables such as cost are quantifiable, whereas measures such as kWh or tCO2 are intangible and mean little
- Climate change is considered quite a depressing topic by the consumer
- Most organisations take a marketing approach to sustainability, rather than a sustainability approach to marketing
- Currently broad strategies are structured around an individual until the area evolves further
Discussion around products and the carbon/sustainability marketing
- What are the key factors driving initiatives
o Do some eco efficiencies cost the organisation money in order to better their processes, supply chain or reputation?
o Some companies who are engaged in great initiatives but not advertising this as the view is they should be doing this anyway
o Others seize the market opportunity driven by the supply chain and shape marketing strategy around the sustainable advantage they have
- Product carbon footprints – difficult to understand, and can be counter intuitive (for example product from Spain has a lower carbon footprint than the same from Britain in some cases)
- Examples of products where choices may be more heavily influenced by carbon/environmental impact: carts, bikes, buildings
- Potential shift in procurement – heavier emphasis on sustainability of suppliers
Is bringing sustainability under the marketing banner the right move?
- Marketers goal is the consumer, and they will understand the concept of linking to a purpose
- Will have a longer terms goal than sales & finance
- Usually have larger budgets
- Integrating marketing & sustainability will give carbon the best chance of being sexy
- When marketing it is key to consider who will be using the information
o Financial stakeholders will want to see a financial benefit
o This doesn’t always correlate with the consumer. For example the option for customers to offset the carbon from their flights – this tends to be viewed as another tax by the customer, what incentive do they have?
- Example of a hospital where energy reductions were packaged as a benefit to the service provided to the patients. An initiative for dementia patients called ‘active days & quiet nights’ served two purposes by switching off loud and disruptive equipment at night –saving energy and improving patient care
- Example of a police station, informing staff that if they left their PC on the network was at risk of hacking & terrorism – a 100% reduction resulted
- Maybe the solution is not about making carbon sexy, but rather appropriately aligning the information to the correct purpose
- Perhaps an indicator could be used instead of carbon to connect with people again, like the hole in the ozone layer did, to shape behaviour in a way that benefits the environment.
Some pioneer companies are turning to new forms of debt that are specifically earmarked for environmental investment. Sainsbury’s green loan from Lloyds Bank, and Unilever’s £250m green bond being good examples. What obstacles need to be overcome, should they become a widely-used accelerator for sustainability programmes, and what’s the comms opportunity?
• How do you measure it, how to audit?
• Momentum is created by reputation at the moment, price benefits will show later
• Transactional cost are a big issue
Red Flags (warnings)
• Verification and standards often kills high impact projects - hindering process
• Self-verification vs. standards – what creates more credibility?
• Transparency element is crucial
• Knowing how to measure it, how to audit it will make is scalable
• Getting wider investment community engaged via green bonds - creating awareness for investors
• For system change engage investment community
• Unilever measured it against USLP, finance decision that contributes to commitments
• Transparency on what works and what not works
• Have third parties involved to verify
• Lower cost of financing is needed to bring it to scale
• There are early adopters now but what’s the wider benefit has still to be shown
• Common language has to be established so it’s a common thing to do
• Common language across sectors to speed up things
• The pool gets bigger and through that we will see the business case, this will attract the potentials
• Technology will help to collect data - mobile tech for verification
• Learn as we go
• Market is growing, appetite for investment is there
• Auditing is pushing green bonds
- Gdf Suez bond was for 2.5bn
- Edf 1.9 bn bond
- Unilever 250 mill
- HSBC increase activities in this space, priority (7 bonds , 5 on the ranking, esp. in Asia )
- Barclays pledged 1 billion to green bonds markets
This table will begin by asking everyone to share a personal story about why they like a brand, before a discussion on how purposeful brands can win in a crowded market. What would make you pay a premium? How difficult is it to understand a brand’s purpose? Is social media influencing your decision-making?
Each participant at this roundtable came prepared to tell a personal brand story of a brand they like, discuss why they like it, what encourages them to keep buying it, and what may dissuade them from buying the brand. There was a brief discussion around sources of information about the brand they trust (brand communications, traditional press, social media etc) and around whether they have ever gone off a favoured brand because of something they heard or read.
Favourite brands mentioned at this roundtable included multinational and omnipresent brands such as Lego, M&S, Dove, Mini Cooper, Apple, Lindt, Zara, the Guardian, and Volkswagen Golf. Typically sustainability oriented brands were in the minority and included Lush, Patagonia, and TOMS shoes.
Reasons why these brands were liked and roundtable members continued buying them were varied but mostly centred on emotional and evocative experiences, e.g.
• Trust, that the brand “does the right thing” in terms of its procurement decisions even if not always logically justified
• Admiration, for example what Dove has done to promote natural beauty; what Lego has done in terms of being an educational, logical game that is still relevant in a digital world; Apple’s commitment to customer satisfaction and innovation
• Delivery (“the brand delivers”), e.g. Apple is believed superior in terms of usability and allowing the customer to distance themselves from the operational side of technology to focus on using the technology to connect. Golf is said to deliver consistent quality and safety, and because of this consistent delivery the consumer doesn’t feel the need to change for a different brand
• Values that the brand exhibits that customers identify with, e.g. Mini’s personality is seen is exciting, cheeky, outside the norm.
• Globally consistent quality and universal availablity in any part of the world
• Catering to the inner needs of the consumer, for example Zara selling customised ranges of clothing in its different markets
• Tradition and ability to evoke memories, for example from childhood
• Commitment to sustainability innovations, e.g. Lush’s Toothy tabs tablet toothpaste or their shampoo bar that demonstrates true commitment to revolutionise well-known products
Roundtable members agreed that whilst they would not always consider how or where their preferred brands were produced, reasons that would dissuade them from repeat purchase include:
• Discovery of repeated ethical breaches. In this sense whilst consumers do not generally tend to buy brands for their sustainability credentials, the obvious lack thereof could dissuade them from buying.
• A brand is allowed to make a mistake once (e.g. Apple’s supply chain) but not twice, they need to take action and if they are seen as not taking action that could dissuade them
• Dissatisfaction with customer service
• If a brand is seen to diverge from its original promise and personality to exploit “the love for the brand to simply sell more stuff”
• If a brand simply doesn’t deliver functionally to meet a quality expectation
It appears that traditional advertising does inform consumer beliefs in terms of where the brand products are sourced from and what the brand stands for, even if the factual basis is not present behind this belief.
Roundtable members also expressed strong opinions about a number of brands that they had heard which betrayed their ethical grounds (e.g. Monclair accusations of sourcing live-plucked feathers for its high-end jackets) and false advertising (rumours that TOMS shoes do not donate shoes unless explicitly requested at checkout).
The brand new “Collectively” movement seeks to engage millennials in a new approach to sustainable consumption. What sets it apart is its focus on things that millennials are passionate about, such as fashion & design. And with impressive launch partners such as M&S, Unilever, BT, Coca Cola & Google, this table will explore how Collectively could create real change.
Approaches to Sustainability
- Two track approach – how do you reinvent the business model while keeping the existing business going?
- If it’s a really good programme, it will still work even if most people don’t know/care
Approached to Marketing
• Do brands need to tell consumers everything?
• Should companies just get on with (sustainability) changes and leave the customer to believe another message? – e.g. ‘it’s healthier’ or ‘it saves you money’ – is this ethical?
- If customers get turned off by too much talk about the ‘S’ word then the brand loses out, and consumers may revert to a less sustainable brand
- Does this make cynicism easier? Millennials have an ever-growing ‘bullshit detector’. If brands don’t live up to the sustainability claims they’re making, they will get found out anyway
- Openness gives brands more credibility and could actually further the wider discussion on sustainability
- Alternative – sharing this story with competitors/suppliers rather than customers, effecting real changes ‘behind the scenes’. Sustainability by stealth… Consumers don’t need to know?
Conclusion – should be AND rather than OR – need the right info available for the right people. It is the role of brands to open the discussion and be transparent.
Thoughts On Collectively
• People won’t do good for good’s sake – innovations/brands/products need to be good AND desirable
• Rigorous independence –
- Editorial team has no contact with the big companies, often pieces offend some partners!
- No greenwashing – stories need to get there by merit, because they will be cool/add value to 18-30 year olds.
• It’s a new form of market research, a crowd-sourcing tool to see where things are going
• What would success look like in 5 years? Big shifts in sustainability movements. A better idea of what are the main areas of interest.
• Target audience – beyond sustainability advocates. People who say “I want to make a positive impact but don’t know how to”
The marketing team plays a crucial role in the development of circular business models, but they need to know how it will benefit them. This table will pool thinking on the business case; creating customer stickiness, new revenue streams, an attractive message to promote and more. Could marketing become the champions of a circular economy?
Circular economy fundamentals
- Old economic model is linear: make, use, dispose
- The new model is going to be circular, resulting in zero waste
Construction industry is a huge waste industry
- The current focus is to design more efficiently
- Therefore reducing the original use and saving money for the builder
- This is the easiest change to ‘sell’
- The biggest challenge is is to convince people to make decisions for materials reduction when the lifetime of a building is longer than that of a person.
- The construction industry set up a framework for the reuse of steel, but it’s challenging to align everyone’s incentives.
With Coca Cola, the biggest move toward Circular Economy is plastic bottles
- They’re a social risk for coke: as soon as someone uses them to litter, people start to associate the brand with littering
- Coca Cola enterprises has developed a recycling team, and purchased two plants in Europe
- This was a relatively easy sell because recycling becomes a revenue stream (or at least a cost savings) because it substitutes for virgin plastic
- Next, Coke’s biggest carbon footprint is in cooling
- Energy is lost every time someone opens the door of a cooler and forgets to close it again
- They’re thinking about how to design a cooler for retrofit
Coca Cola Enterprises is able to do some marketing, but they must work with the brand owner in order to be effective
- Independently, they can sponsor festivals (w/Recycling)
- Add recycling information to the labels
- In-store promotions (because they own the relationship with distributors)
- Tesco are more project managers than marketers right now
- They’re spending more on improving stores and investing in communities
- There is lots of talk about how to reduce food waste along the supply chain
M&S are working to improve the supply chain (more than consumer behavior)
- There’s a debate about whether to be vocal about the steps taken toward sustainability - and therefore open the company to criticism – or to stay quiet and build trust slowly.
- When they do focus on consumer behaviour, the message is for consumers to think about what they’re putting into their bodies and how they’re disposing of packaging.
- At the moment, M&S’ work in sustainability isn’t at all visible.
- The Crown Estate is working on educating the supply chain throughout their investments
- If they can be aware of their client needs, the organisation can become a convening force to improve sustainability
- Example: Batched delivery service for businesses on Regents Street was a win for stores, environment, and The Crown Estate
- There is an inherent choice for management to put sustainability forward as a public priority (or not)
- Perhaps this is also a legal choice?
- In the US you can be sued by shareholders for not maximising profit
Coke commissioned a study with Cranfield to learn whether businesses should have a social purpose
- The results showed that there is no legal basis for a business having to earn a profit
- Historically, the community aspect of business was inherent
- That sense of improving the community has since been lost in the race for profit
- When asked about whose responsibility it is to use business to serve the community, both millennials and business leaders agreed that it should be done, but they pointed their fingers at the other group as the ones who should do it.
Financial services view is that it’s not about giving back, it’s about how you make your profit in the first place
- Institutional investors are the largest group, and they do factor in non-financial criteria into their decisions
- Personally, how are you involved in the circular economy?
- Consumer preferences are deeply entrenched
- Some like to own their assets (car, house) while others enjoy renting only when they need to use something
What are people getting out of the sharing economy?
o A sense of community?
- Our table isn’t’ representative of the greater population
o It would be inaccurate of us to come up with solutions that we all agree on, because we haven’t asked the general public
- There are some problems that no business or organisation can solve on its own
o For example, coke ahs a benefit in making the recycling system work
o And the government does, too – it wouldn’t have to pay so much in landfill cost
o But London alone has 29+ different recycling systems
o This game is about finding the sweet spot to help everyone work together
- Companies worry about competition law (which may be silly given everything else that big corporations have under their purview)
- It’s not about selling the concept of the circular economy – we have to answer the question of “what’s in it for me?” to all of the stakeholders
- The Netherlands is going to stop the policy of paying for recycling
o As a country, they have over 90% uptake for recycling plastic bottles
o Do they need to pay people at this point?
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