The terrifying thing about “green” is that in terms of its impact on business, it’s only at the very, very beginning. One day, when all the changes it brings have swept their way through operations, metrics, communications and mindsets, we’ll look back in amazement and ask: “Did we really do things like that?”
Take operations. When green first emerged it was a separate bolt-on project, usually something external to the company and chosen mainly for its impact on PR and reputation. Today, whether it’s the sustainability of inputs such as timber or fish, pollution, or the hot issue of climate change, an assessment of potential environmental impact is becoming a standard part of any planning and operational process. Green is being designed in at the beginning rather than bolted on as an afterthought. And the more we do this, the bigger we realise the challenge to be.
Enter metrics. When green began, the only measure that mattered was money. Subsequently, there were many painful attempts to shoehorn green initiatives into a financial accounting framework. The only question was: “Is it good or bad for the bottom line?” and the answers were usually ambivalent or unsatisfactory.
Today, green key performance indicators (KPIs) are increasingly accepted as KPIs in their own right. It’s the job of managers to meet them. Full stop. For some companies, this is relatively easy and benign – reducing use of an expensive input may flow financial benefits straight to the bottom line for example. For others, however, it’s painfully difficult, implying a complete reinvention of the business model. What is Tetra Pak doing about those unrecyclable laminated juice cartons? What is the future of aviation in a carbon emission-frenzied world? These aren’t easy questions to answer.
It’s made even harder by the stupefying complexity of the issues involved. University researchers looked at a common food product from the point of view of carbon emissions (how much and where) and social value (how many jobs are created, where and how “good” these jobs are). About 75% of all related carbon emissions are generated on the farm, partly from the use of fertilisers but mainly from “ruminant methane emissions” (in plain English, cattle farts). On the other hand, almost all the social value is also created on the farm – via the jobs it provides, which keep rural societies on an even keel.
This poses dilemmas for anyone seriously wanting to turn their lunchtime cheese sandwich green. Should I focus on carbon emissions or social contribution? And if I want to help improve things, what can I do? If by far the biggest challenge facing green cheese is cattle farts, is there any point in, say, wrapping the cheese in recycled, biodegradable paper rather than oil-based plastic? Or is such a gesture merely a cynical, conscience-salving marketing ploy?
Enter marketing and communications which, frankly, are stuck in a quagmire on this issue. When green first appeared, it was seized on by many companies to charge higher prices and/or greenwash their reputations with superficial gimmicks. Then the inevitable backlash came with its concomitant loss of trust. So much so that nowadays many companies are afraid to make any claims at all because in some people’s eyes, the simple fact of making a claim is irrefutable proof of spin.
Behind this lies an even deeper issue. Endless claims and counter-claims are a byproduct of the fact that these issues are complex (metrics) and the trade-offs painful (operations). Once you start to take the issue seriously, there is only one thing you can be sure of: there is no 100% clear, black and white, right answer. Yet that is precisely what consumers want – answers that cut through the complexity to deliver simple and obvious choices and courses of action… the “right” answers.
But the communication dilemmas don’t stop there because there is also a tension between responsible leadership and old fashioned marcoms. Consider the total environmental impact of the grocery industry and grocery retailing. Now look at the spectacle of supermarkets doing battle over who is doing the most to reduce the number of shopping bags they distribute. Talk about irrelevant, superficial gestures.
But shopping bags are something that every consumer is aware of and bag wars are far more likely to get people thinking about the bigger issues than research papers on cow farts on farms. Is the real job of companies here to burnish their brand image or to lead and educate?
At which point we slide into an even deeper issue of corporate mindsets and cultures. An underlying assumption of the industrial age was value extraction. There are a load of “resources” out there and it’s the job of companies to extract them, turn them into products and sell them at a profit. This bred instrumental attitudes – it’s all about how to use things (including people) to make money.
These assumptions shaped the evolution of marketing. Markets were viewed as another resource. The job of the marketer was to extract value from this resource by persuading consumers to buy the firm’s products. In pursuit of this goal, the information marketers provided was to be used as a means to an end – to get people to buy our stuff.
The concept of sustainability challenges all these assumptions at the core. It demands reciprocal win-win relationships with all “resources”. It transforms the metrics used to measure success. And it places issues of transparency, honesty and genuine education on the communication agenda.
Right now, these two warring philosophies are battling it out inside corporate cultures and in individuals’ heads. But we can see the direction we’re heading. Introducing Tesco’s latest corporate responsibility review, chief executive Sir Terry Leahy said: “We recognise our impacts on society, on the economy and on the environment. We focus our efforts on practical activities that make a difference: maximising the benefits we bring and minimising any negative impacts.”
Leahy has captured it in a nutshell. The measure of success for every organisation is the degree to which it maximises the benefits it brings and minimises any negative impacts across everything it does.
The point about this is that it is a process – a journey – not a single, isolated, easily measurable thing or action. Marks & Spencer has recognised this with its Plan A campaign. Plan A is a public commitment to do things better over time. By making that commitment public, it’s created a stronger incentive to deliver than any internal “culture change”. If it fails, it will be taken to the cleaners. Very publicly. Its brand is on the line.
These are early signs of a different marketing and communication agenda. Marketing’s job here is to build trust in, and support for, a process of improvement – a journey. This includes a proper understanding of the difficulties and a commitment to overcoming them so that even where there is conflicting evidence, debate and doubt, people inside and outside the organisation can remain confident that it is nevertheless committed to working things through and getting it right. The sustainability revolution is only just beginning.
Alan Mitchell, www.alanmitchell.biz