Marketers are the logical choice to lead on sustainability

Companies can no longer treat climate change solely as a matter of corporate responsibility or a branding opportunity. It’s time to take action and marketers are well placed to lead.

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Climate change is a serious challenge for businesses, but marketers may be doing too little to address it. Results from the February 2022 edition of The CMO Survey show only one-third of surveyed companies have incorporated climate change issues into their brand strategies or have specific marketing goals related to climate change.

Strikingly, nearly 40% of companies are taking no climate-related marketing actions.

These number are more encouraging in the UK where 57% of companies have incorporated climate change into brand strategies and only 19% are taking no climate-related marketing actions. Nevertheless, these statistics are disconcerting given many climate change leaders believe time is growing short to effect major change and protect the planet for future generations.

So why are so many marketers’ falling behind on climate action? Findings from The CMO Survey provide several possible explanations.

Covid’s distracting effect

Companies are less likely now than before the pandemic to take actions to reduce the negative impact of marketing-related activities on the ecological environment, except for a small increase in willingness to change their brands.

In February 2020, survey results showed that 73% of marketers reported they were changing products and/or services to reduce the negative impact of marketing-related activities on the ecological environment. However, this number dropped by 30% two years into Covid. This is likely because many marketers took on additional time-sensitive and mission-critical responsibilities during the pandemic, such as accelerating digital initiatives.

Lost in translation

Close to 50% of marketers surveyed say it’s difficult to communicate ideas about climate impact to customers or partners. Marketers may reason that if they cannot articulate climate priorities to those they work most closely with, it may not be worth the risk and cost of moving forward with these initiatives.

Lack of customer reward

Only one third of marketers believe their companies will be rewarded for taking climate-related actions, and only a quarter report their customers are willing to pay a higher price for more climate-friendly offerings. That’s likely accurate for the short term as the rising cost of raw materials, finished products and services shift buying behaviours.

Failure to adopt climate-related metrics

Just 19% of marketers report their companies have adopted climate-related metrics. This makes it difficult to understand where the company stands on climate issues and limits the ability to act strategically.

ESG pushback

If Davos is any indication of the larger tenor of thinking about climate, companies may be worried the tide is turning against climate activism and other environmental, social and governance (ESG) initiatives. The line between sound forward-looking business strategies and woke capitalism may be too difficult for many business leaders to walk and they are pulling back.

Despite these discouraging results, CMO Survey data offers several bright spots. First, the largest companies, both in terms of annual sales revenue and number of employees, are doing more on the climate action front.

Larger companies are more than twice as likely as the average size company to have explicit goals related to their impact on climate change. This could be due to a combination of internal pressure from employees, external pressure from investors and the public, and leaders’ desire to future-proof their businesses and be good stewards in the communities they serve.

Regardless of the reason, we think this should bode well for the future because larger companies often blaze the path for smaller companies and entire industries to follow.

Marketers can help lead companies by providing research and case studies on how adopting climate metrics leads to business innovation, operational efficiency, and other forms of competitive advantage.

An example is Unilever’s Dove brand, which announced an ambitious plan to reduce plastic waste by 2025. Not only is the plan designed to reform the brand’s own plastic footprint with stainless-steel refillable deodorant sticks and other product changes, it is also hoping to push the broader cosmetics industry towards a more sustainable future.

Second, marketers report their customers and partners are in fact shifting demand to more climate-friendly products and services (57.5%) and demanding more transparency on climate impact (51%).

Interestingly, the demand for climate-friendly products/service is stronger among B2B Services (69.6%), indicating business customers will likely drive changes that may then influence the B2C product sector.

At the same time, the demand for transparency is stronger among B2C-product companies (59.1%), pointing to an opportunity to communicate more clearly with consumers.

Third, more than half of marketers believe making climate-related changes to products/services will not change their customers’ experience. This should make it easier for companies to change their products and services without requiring complex explanations that may turn some consumers off.

‘Sustainability is a journey’: Marketers on their mission to go green

A proposed role for CMOs on climate change

Companies can no longer treat climate change solely as a matter of corporate responsibility or a branding opportunity. Responding to and preparing for climate change is a fundamental business problem and those companies that do not prepare will face shareholder and stakeholder risks. Given this, what role, if any, should marketing leaders play?

Give marketers climate responsibilities. A key marketing responsibility is to capture and respond to the voice of the customer. Therefore, we expect that if marketers have an increasingly larger role to play in climate, companies will engage in more actions.

Our results support this idea. Astoundingly, only 24% of companies report that reducing climate change is currently part of marketing’s job responsibility (this is 39% in the UK). However, in companies in which reducing climate change does fall under marketing, 71% of companies have explicit goals related to climate change. This number drops to 22% when marketers do not have this responsibility. Thus, marketers are the logical choice to help lead this important duty for their companies.

Lead on climate metrics. Despite the current pushback, we expect ESG reporting to become the norm and companies that regularly communicate their efforts to combat climate change will have an advantage.

And although many companies do not have climate-related metrics in place now, we think this will change as consumers continue to push for transparency.

Marketers can help lead companies by providing research and case studies on how adopting climate metrics leads to business innovation, operational efficiency, and other forms of competitive advantage. This effort will be meaningful to consumers and other stakeholders, as well as elevate marketing’s role in the company.

Focus on the long-term. Nearly half of marketing leaders believe their companies are unwilling to make short-term financial sacrifices to reduce their environmental impact. This is cause for concern, but it is also an opportunity to focus the climate conversation on the long-term.

Marketing leaders need to point out the long-term gains to the company’s stakeholders that are and will be affected by climate change if they do not act to forestall what seems like an almost inevitable future.

Studying the long-term concerns among stakeholders and building a stronger understanding of how the company can work together with these individuals and organisations is an important role for marketers because they have the strongest connection to the external world.

This is going to take some work, however. CMO Survey research shows only a third of marketers focus on “preparing for the future” as opposed to “managing the present.” We encourage marketers to shift their focus to the future as one way to gain traction on climate issues.

Leverage constraints to innovate. Research shows companies often innovate well in the presence of constraints. Marketing leaders should capitalise on climate pressures to encourage their organisations to think about new business models that might also help their companies solve other challenges or that improve the company’s chance of leaping ahead of competitors.

Other innovations may be less dramatic but equally effective, including redesigning products to have a lower carbon footprint, collecting waste and reusing it in new products, developing reusable packaging and more.

Internal selling. It is challenging that almost half of marketers believe their companies are unwilling to make short-term financial sacrifices to reduce their environmental impact. Marketers may first find they need to sell sustainability internally before they try to sell it externally. This means first identifying the value proposition to internal parties and then shoring up evidence about positive effects.

A white paper by ADEC ESG Solutions on this topic also recommends starting at the top with the C-suite, building a coalition by recruiting advocates, and highlighting success stories internally and among competitors.

The sooner companies adapt their marketing strategies to the reality that there is no planet B, the better off they and our environment will be.

Nudge customers. At present, only a quarter of companies use strategies to nudge customers or partners to accept climate-related policies. Marketers need to use their considerable knowledge of consumers to shift behaviours.

In one incredible example, researchers showed that using social influence tactics in hotels to persuade customers to reuse towels by asking guests to ‘Join your fellow guests in helping to save the environment’ increased towel reuse by 33% over standard ‘Help save the environment’ pleas.

Another example is P&G’s marketing campaigns for Tide and Ariel to encourage consumers to wash clothes in cold water to save money on energy bills and protect the environment.

Partner with customers. Marketing leaders can also view climate action as an opportunity to deepen their relationships with customers.

Alipay, a popular Chinese online and mobile payment platform, launched its Alipay Ant Forest project to work together with customers to reduce its emissions and plant trees throughout China. The initiative has been wildly successful, attracting more than 600 million users since its launch in 2016.

Use storytelling for climate action. Climate technologies may be effective, but companies need a story to connect with customers. The 2022 Super Bowl featured more climate-related ads than ever before, with seven focused on electric vehicles (EVs).

Generating significant buzz, Hyundai’s ‘History of Evolution’ commercial for the fully electric IONIQ 5 takes the viewer through an evolutionary journey. Staring Justin Bateman, it starts with cavemen, stops by the invention of the first map, the telephone, early TVs and the first electric car to eventually reach the IONIQ, showing off its features while speeding down a scenic road.

Through well-known historical milestones and tongue-and-cheek humour, Hyundai was able to capture the attention of consumers in a very compelling way that other companies may want to take a page from.

Danone on why marketers ‘could do more’ to push for sustainability

Empower employees to innovate. Workers at the PG Tips tea factory led the company to reduce the size of tea bags in order to save paper (and money). Years later, sustainability continues to be one of its main selling points.

Harnessing ideas from workers just makes good business sense because they know the products and services well and may see opportunities missed by managers.

Likewise, engaging employees in this way is very motivating and could have additional downstream productivity and retention benefits.

Avoid greenwashing. But these actions must be credible, meaning marketers should not advocate for change and help to develop the story of change unless companies are ready to walk the talk by making fundamental aspects to their business and product strategies. That means rethinking raw material suppliers, changing product formulations, creating physical-digital products, finetuning logistics, and more.

For example, fashion brand H&M received considerable pushback for the marketing of its Conscious Collection when it was found that its products were not made of as sustainably sourced materials as H&M claimed.

Take action

Falling behind on climate action is no longer an option for companies. Playing catch up will, we predict, become costlier over time as the effects of climate change become more apparent and permanent. In fact, lawsuits aimed at greenhouse-gas emitting companies are a growing trend.

This is an especially exciting moment to lead on this front as the Biden administration in the US increasingly favours an approach to combating climate change that gives the private sector a more prominent seat at the table.

The sooner companies adapt their marketing strategies to the reality that there is no planet B, the better off they and our environment will be.

Christine Moorman is the T Austin Finch, senior professor of business administration, Fuqua School of Business, Duke University. She is founder and director of The CMO Survey and editor-in-chief of the Journal of Marketing.

Katie Hinkfuss is a second-year MBA student at the Fuqua School of Business at Duke University and a fellow for The CMO Survey.

A complete set of UK results can be viewed here, and you can also sign up to participate in the next CMO Survey