As we have seen in recent weeks through voter polls, the record-setting voter turnout, and now the historic election of Barack Obama, the economy is a clear priority for Americans across the nation. In the midst of the imminent global recession and international efforts to salvage our economies, where do sustainability and corporate social responsibility lie in this equation? Is it an ideal of the past, or could it be the key to the future? In our current global climate, is it irrelevant, or more relevant than ever before?
According to the recent Best Global Brands 2008 report, companies from Honda to GE to BP have been earning a bump in their ratings due to significant investments in sustainable products and business practices. Among the top ten are companies that have significantly invested in sustainable practices or products, such as GE, Toyota, and Google.
According to Jez Frampton, global CEO of Interbrand, “The Best Global Brands 2008 ranking is a reflection of the global economy – the current credit crisis in the U.S., the growth of emerging markets and the increased emphasis on sustainability are all key trends that resulted in brands rising or failing on the list.” So even though consumers are deeply concerned with saving money, sustainability is still relevant and cannot be ignored. It continues to drive brand value across all sectors, but the key is smart sustainability.
Not only have these companies been earning a bump in their ratings, but a serious bump in their revenues as well. GE recently announced that revenues from its Ecomagination line hit $17 billion and rising, with sales likely to jump 21% in 2008.
Sustainability is critical in this new market for creating brand value, purchase loyalty, and influence—but it cannot be the main player in the equation. What will help ensure consumer loyalty and create brand value in this economic recession is not an emphasis on green, but an emphasis on the economic value of the product, which is augmented by the product or company’s sustainability.
But what do consumers think? How are they behaving?
While green products have been all the craze, market research has shown that mainstream consumers care more about the cost than about the environmental impact. Of course they are interested in the environment, but first and foremost is how the purchase impacts their wallet. This has been proven in products like Philips “Marathon” light bulb and the Toyota Prius, but it could not be more relevant in today’s economy.
Philips “Earth Light” light bulb, which emphasized the environmental benefits of the super-efficient bulb, had lukewarm reception, but when they changed the name to “Marathon”, primarily emphasizing the longevity of the bulb and secondarily emphasizing the environmental aspect, Philips saw a turnaround and boom in sales .
Another well-known example of a successful green product is the Toyota Prius. However, Toyota has learned that touting the Prius for it’s money saving efficiency has been far more important in winning over customers than advertising it for its “green” benefits, though the environmental aspect is far from ignored.
Bottom line: the financial crisis will create a ripple effect that not only calls for more regulation within the financial sector, but in all sectors of business as we will begin to see regulation regarding pollution, energy efficiency, waste, and recycling for business operations.
Staying ahead of the curve creates a competitive business advantage that can drive companies towards innovation while also creating value among share holders and consumers. It is also a bottom line argument—greening your operations saves money and creates value.
It’s a win/win situation.
A lot remains to be seen on how this global economic crisis will affect the green economy. But perhaps it might even do it some good. Could it be the force needed to weed through green-washing and over-saturation? Could it provide focus and direction for green products and companies forced to take a hard look at their product, mission, and operations? Will it trim the fat and produce a movement with real meaning and impact? Perhaps it will even be the key driver needed to pull us out of this global recession. Only time will tell. But let us not sit idly by…what will you do to get more green?
Is that time of the year.
“75% of people that buy a hybrid, does it for economic reasons, not environmental”. I often cite this finding of a J.P. Power and Associates survey that helps me make the point that sustainability per se’ is not sufficient to win people’s heart and influence behavior if it doesn’t respond first to very personal needs (Like saving money on gas!!).
In the first of a series of articles dedicated to Re-framing the Green Consumers we assessed how in order to make ‘green’ meaningful to our consumers we have to make it ‘personal’.
