Saturday, 31 January 2009

"Going Green" is Now a Cost of Doing Business

Jun. '08: A Shift From Short-Term Profit, to Long-Term Sustainable Investment

For transparent reasons, the largest global businesses and the governments they back, whether in the US, China, or Bangladesh, have a short-term view of the world. Shareholders make it so, but gradually those same stakeholders are beginning to see that adopting a slightly longer-term perspective might better improve their investments within their lifetimes.

Yes, many (if not most) people in North America still are claiming to be too busy to worry about all that environmental, ‘green’ stuff. (Note that in Europe, where space is severely limited and environmental impact is readily apparent, the majority of people have gone ‘eco-warrior green,’ to the point where ‘keying’ of the sides of SUV’s is common, as well as spitting invective at SUV owners!). Here we’re all too busy getting our kids’ lunches ready, packing tap water pre-packaged in PET containers, plastic cracker packs and apples flown in from New Zealand into their lunch bags, then rushing our kids into the SUV to drive them to school (European kids tend to walk or cycle to school – in part because they don’t live in a ‘politics of fear’ environment and they recognize that the chance of their child being abducted by a stranger is 1,000 times less likely than getting killed in the family car). Here in North America we don’t have time for recycling (“just a waste of time, anyway”), or for worrying about our “carbon footprint”, or learning why we should be adamantly refusing to eat wild sea bass.

That’s all about to change (and very soon), whether we ‘feel like it’ or not. Globally influenced economics will force the change. Bury our heads as deep as we’d like, the new global reality will keep coming back to bite us on our exposed backsides: we cannot take A LOT of carbon out of the ground every year, exhaust it into the atmosphere and expect it not to change the ecological balance. Einstein’s definition of insanity was doing the same thing over and over and expecting a different result. Humans have been steadily increasing our consumption of carbon-based fuel year after year, yet many people still insist that the world’s atmosphere is not suffering because of it.

Inarguably, Al Gore had more impact upon the world after his stint as VP than during, but his simple repetition of some very simple facts, over and over, has helped humankind, around the globe, to reluctantly see the challenge we face (see his 28 min. speech at TED at <>. For hundreds of millions of years carbon from the atmospheric soup of our planet grew as wood/plants, then got buried and became coal, oil and natural gas and more or less stayed there, sealed off deep underground. For the past couple of hundred years we humans have been digging it up and burning it. And not just a couple hundred thousand of humans are continuing to do this, there’s now 6,674, 840,039 of us (as of 21:43 GMT, June 17, '08). The US alone is putting the equivalent of 1.2 billion elephants up into air every year in the form of burned carbon fuels. One point two billion elephants worth! Every year! (And increasing!)

Mr. Gore quotes an African proverb:

“If you want to go fast, go alone.
If you want to go far, go together.”

His point is that, right now, we have to go far, fast. Individually and as a group, whether the group is local, national or global, niche or broad spectrum, we have to act, and act very fast to prevent what currently looks inevitable. And the action we take cannot be to simply ship our developed world problem to the developing world; it must be globally sensitive, ecologically responsible action.

Greening Your Firm/Brand: A Sustainable Business Model

Lately we’ve made big strides lead by community leaders towards redirecting a lot of garbage away from landfills and incinerators and into recycling channels. The reality has been that much of this so-called ‘recycled’ material was still being sent to landfills or dumped into the ocean, especially in the early days of the programs. A portion of it still is, or is being shipped off to the developing world where some is actually recycled, but a good proportion is dumped into landfills or the ocean, or is burned. The key factor here, however, is NOT what portion is still not put to good use, but rather that the material is now being collected and separated into streams. This means that there are now viable supplies of material, stockpiles that can be put to use. This creates an unprecedented incentive for scientists and entrepreneurs to find uses for the material, uses that would only have been theoretical prior to the collection program being in place.

Like any ‘chain’, however, the recycling separation and collection process is only as strong as it’s weakest link. While pressure to recycle effectively and consistently has only begun to filter down through communities to every individual household and office/company, it will soon become a permanent part of the collective consciousness, no different from the pressure we face to ensure we use garbage bag pick-up, versus simply tossing our trash out the kitchen window or onto the street. Effective recycling in every office and factory cafeteria is becoming a cost of doing business, a cost of membership in the corporate collective, just as using tap water in place of bottled tap or spring water will soon be (the protests against this lucrative business model are beginning to mount).

Companies who are found by their suppliers or customers to not be scrupulous and exacting in their efforts to be ‘model citizens’ will suffer and be ostracized, those leading the charge will be praised and will benefit.

Cause Marketing: "Riding the Breast Cancer Bandwagon" vs. Finding a Strategic Fit

What is increasingly becoming a similarly crucial element in any brand's marketing model is the charity that it is partnered with (and the core cause that the brand's parent company supports).  The breast cancer pink ribbon has become so ubiquitous that it has to undercut the authenticity of any brand's real 'heart' for the cause.  Playtex had a good strategic fit with the cause, but frozen foods?  Cookies?  Cement?  When brands are contributing 'out of the blue' for a charity simply because it is popular, the 'disconnect' becomes problematic.

As usual, in their efforts to trample over each other trying to be on the latest bandwagon, young brand managers did more harm to the concept of 'Cause Marketing' than good in the medium term (many brands were contributing such a miniscule percentage of net margins that their impact was negligible given their brand value in the marketplace).  I say 'medium term' because over the long term the net effect has been to create the beginning of a groundswell that will see every serious brand partnering with a cause that actually makes strategic sense for the brand.  

Good examples are out there, from Apple CEO Steve Job's visions for giving back to higher education programs (Apple has designed and built, and given away, special Mac models for schools for ages), to vaguely strategic fits like Coca Cola's 'save the polar bears' efforts (the Xmas polar bear ads having created an odd advertising-built link for the brand with this now endangered animal).  Key to any effort in terms of marketing strategy, is finding charities that actually are a natural fit for the brand.  

It's unlikely to happen soon, but I'd like to see Coke and Pepsi contributing to obesity-fighting efforts in every country they're sold in, as distribution of their entire line-up of convenience store products is the precursor to each successive country's children rapidly becoming obese.  [Salty snacks, frozen desserts, candy bars and sugar water (pop and juices) proliferate at attractive prices on every corner and BOOM!  Fat kids!]  Nike should sponsor efforts to eliminate child labour in the counties they manufacture in.  Beer brands should partner with MADD (Mothers Against Drunk Driving) while the iPad should contribute to efforts to reforest land (perhaps the most amusing of my examples!).

P&G has made some really odd charity-brand links in the past, but as a corporation their bread and butter has always been housewives.  They have supported 'soap operas' since their inception (an invention of theirs in the early days of TV) around the world through their prolific advertising, and these shows are the single biggest 'educator' of women in the world (the primary lesson being that if you have less kids, each child grows up to have a better life more full of opportunities).  If they translated this into a global cause for Planned Parenthood, or even simply education in safe sexual practices, they'd be benefiting the entire human race with far more than the Swiffer Duster!

Eventually we'll finally see all the big brands figuring this out, but first I predict we'll have to suffer through  lot of  bizarre and inappropriate partnerships before Cause Marketing really 'hits its stride'. 

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