Can brands save the world? Business case for sustainability
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The document discusses whether brands can help save the world through more sustainable consumption. It notes that business leaders like Jeff Immelt of General Electric see economic opportunities in solving customer and global problems. The document also provides quotes suggesting that consumers are looking to brands to help solve problems, and that both individual and collective action is needed for cultural transformation around consumption.
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Can brands save the world? Business case for sustainability
- 1. Can brands save the world? Human Sciences Symposium 22 February 2014 @sarah_holloway
- 6. Who is going to lead the way to better consumption?
- 7. “We are going to solve tough customer and global problems and make money doing it.” Jeff Immelt, General Electric
- 9. Business case for sustainability • • • • • Cost reduction Risk avoidance – physical and reputational Building trust Attracting/retaining employees Long-term business model
- 10. Direct impacts
- 16. “People don’t buy things – they buy solutions to problems” Theodore Levitt, Harvard Business School
- 17. “Most of what consumers are doing is looking for answers from brands and businesses. The brand has a permanent invitation to come up with new suggestions.” Ian Cheshire, Kingfisher
- 24. “The transformation of our culture and society would have to happen at a number of levels. Personal transformation among large numbers is essential, and it must not only be a transformation of consciousness, but must also involve individual action. But individuals need the nurture of groups that carry a moral tradition reinforcing their aspiration.” Robert Bellah
- 25. Thank you Sarah Holloway Sustainability strategy & communications sarah@sarahholloway.co.uk @sarah_holloway
Editor's Notes
- What is problem? Perfect storm – plus want good quality of life as well, and that means growth for many places (John Drummond)We currently have seven billion people living on one small planet; by 2050 that could be nine billion. Around three billion more people will move into middle classes with aspirations for better lifestyles and more stuff. Together we will put more pressure on resources, meaning demand for energy could double, leaving a gap in energy provision equivalent to about the whole of the energy sector in 2000. We will face water scarcity. By 2030 global water supplies will satisfy only about 60% of demand. We simply cannot sustain current lifestyles. Deforestation as example of complications – people live from the rainforestLong-termSustainability is all about long-term benefits of the world or of the ecosystem at the expense of short-term benefits. Human beings are programmed with the exact opposite values. Short-term genetic benefit is all that matters in a Darwinian world. You can see how taking care of our own short-term welfare would have been the best strategy for ensuring the long-term survival of our genes as our ancestors evolved on the scrubby African savannah. Superficially, the values that will have been built into us will have been short-term values not long-term ones. Incidentally, the flipside of this is that our big human brains can follow their own rules. We override our genes every day – the obvious example is contraception. Using the large brains that Darwinian natural selection has given us, it is possible to fashion new values that contradict Darwinian values – including saving for our own futures and caring about the futures of people who have not yet been born, and caring about people who are not like us. But we’ve still got to get over that hard-wiring.PoliticalI don’t mean that sustainability is party political in and of itself. People of all political persuasions and none can care about the environment and about people. But once we start talking about our society, the way it is and the way it should be, it becomes political. And you can’t have failed to notice that there’s a split on the political right and left on the validity of taking action on the environmentThat’s what you see with climate change. On the surface, debates about climate change look like they’re about the science, but really they’re not… they’re about the implications of the science. Because if you accept the science is true, there are clear implications for society. Either we need to mitigate, or we need to adapt – or both. The reason we’re still arguing is that these implications touch on beliefs and feelings about the world that most of us are only dimly aware of.Things like what government is for, and our own safety, and who has the right to tell us what to do.So quite a lot of time, we ignore it. BBC QT and ignored Robert Winston.ComplexWe think in terms of simple stories with standard structures, like good vs. evil. Witness the floods and how quickly they turn into good vs. bad even though it’s much more complicated than that.So where the problem is a change to a complex system that relies on international cooperation and radical changes to lifestyles, it goes against our wiring to do anything. And on top of that, there’s the justice side of sustainability. Even as we talk about reducing global emissions, or protecting biodiversity, we come across real people who need to cut wood from rainforests to for cooking fuel, or who make a living from raising cattle in areas that used to be rich in biodiversity, and moral questions arise of what we can ask of them in the fight against climate change. So, taken all together, we need to work pretty hard just to stay on top of the challenge and even begin to start solving it. It’s easy to get overwhelmed.
- What’s the problem? Ultimately, it’s this It’s the small things we do every day – how we heat our homes, how we get to work, what we buy and how much we buy, what we eat. So, I’d like to ask you some questions Who here accepts the science of climate change? Keep your hand up if you think it require all of us to make changesKeep your hand up if you think you’ve made all the changes you need to make to halt dangerous climate change Why not? [take answers] The answer is because huge bits of our lives come fully formed. By genetics, by culture and our upbringing, by the political and economic systems in which we live. That means if we want to change the things we do every day, we need to attack it from both ends – we need to make small changes, but we also need to make big changes so that we don’t rely on every single person coming to the same realisationThey have one thing in common – all forms of consumption, and it’s this I want to talk aboutConsumption gets a really bad rap. Scornful – status symbols. But of course we’re humscis and think more deeply.
- For my money, 3 types of consumption, 2 represented hereThisis one of the houses at Skara Brae on OrkneyThe neolithic settlement of Skara Brae lies near the dramatic white beach of the Bay of Skaill. Skara Brae is the best preserved groups of prehistoric houses in Western Europe. Uncovered by a storm in 1850, the attraction presents a remarkable picture of life around 5,000 years ago. The people who lived in this house lived in a world of scarcity. Primarily, they consumed to meet their needs – food, shelter, warmth. And in circumstances where things are scarce, there’s an evolutionary advantage to being acquisitive. And it always makes sense to want to mate with someone with a genetic advantage, so it’s adaptive. So, ultimately, like everything in human sciences, it’s about sex, signalling our fitness for potential mates. But even here, there’s a sideboard. So once the people had their fill of the stuff they needed, they started making things for pleasure. The second reason.We also consume for pleasure – chocolate, cinema, music, anything else. But third – and I don’t need to tell a room full of human scientists this – stuff is not just stuff for humans. We need to turn to another person to tell us why. There’s the consumption that meets our basic needs. We need to eat and drink, we need to keep warm, we need to get around. It’s important to note that a large chunk of the world is finding it difficult to meet their basic needs for food, shelter, sanitation. Around 16% of humankind is responsible for 78% of all consumption.But those of us who have fulfilled those basic needs keep buying more stuff. And we KNOW what it’s doing to the planet.So why don’t we just do something about it? why not stop consuming so much energy and make our homes completely energy efficient, which would actually save us money? why not just stop buying so much stuff – why not just get over it? WHY NOT JUST STOP CONSUMING ALL THIS EXTRA STUFF?
- Does anyone know who this is?This is Bonislaw Malinowski, and he’s sitting among some men from the Trobriand Islands.MOREFor the islanders, like the rest of us, the stuff they gave was not just stuff. It’s a symbol, it’s a signal, it’s a language. It’s safety – we all know a hoarder –it’s us preparing for the lean times. It’s conformity and it’s standing out at the same time. It’s showing who we are. It’s conspicuous consumption, for the sake of status. NOWLike so many of our behaviours, conspicuous consumption is a relic of our past in a world of scarcity that’s no longer so well needed in a world where some of us have lots. Although we’ve built systems around ourselves to change our immediate circumstances, those feeling and instincts survive and we need to find ways of dealing with them So, I would argue that consumption in and of itself is no bad thing. Though it may not be as needed as it once was, consumption has played an important role in our lives from very early on and we’re not going to get rid of it.
- BUT we also know that using all these resources is bad for the planet.So… who is going to help us change our consumption patterns when we’re so wedded, biologically and culturally, not just to consumption but to conspicuous consumption?There are three main candidates whenever something needs doing:Governments – broadly, they can signal what’s expected and what isn’t, what’s considered right and wrong, through laws and taxationBusiness – are the ones who make all the stuff, and convince us we need it, and must be able to use that power“Us” – whether that’s each of us acting alone, or organising in the form of NGOs or communities – usually have a role to play doing good things themselves, influencing government or businessSpoiler alert: I think we all have a role to play in creating a more sustainable future. Obviously there are more nuanced ways of looking at this – you might argue, for example, that education has a huge role to play – but I’m going to talk about business, because that’s who I work with in the main.
- Why would a business want to help with something like this?Why does business want to do anything? Businesses are very very good at making money, and those that aren’t soon go out of business. So it makes sense that they are interested in sustainability because they believe it will benefit the bottom line.How does everyone feel about that?If this makes you feel a little uncomfortable, join the club. It makes me a little uncomfortable too, and every now and then I get tired of building a business case around something that’s obviously good. But everyone has their drivers, and if I was working with government, I’d be focusing not only on what was right, but what was going to get them elected. And it’s worth noting that this clear profit motive doesn’t put everyone off. Lots of people hate moralising but trust business with this, because the profit motive is clear for all to see.
- How do they make money?They find the sweet spot where big social and environmental problems meet opportunities for profit and growth.So, for example, if you were RB, makers of Durex, you would note that you made money out of condoms and that preventing STDs and allowing people to plan their families was a societal problem needing to be solved. So if you can design a marketing programme to solve this problem, you can sell more condoms.It’s worth noting that this is what businesses do anyway – find problems that need solutions, solve them, and sell the solutions. It’s just in this case that the problems are intractable social and environmental problems.
- Let’s look at the left hand side of that diagram first – what makes money?In other words, what’s the business case for sustainability?Saves money nowAvoid risk – climate change, NGOsBelieve people want it or will want itThe cost of losing trust? The Big 6 energy utilties have lost 800,000 customers in just over a year. bit.ly/1b6xyFaLooking to the future and can see where things are going. For example, if you’re selling laundry liquid that need water to work, and you’re selling into markets that will become water scarce, your business model is looking pretty shaky in the long term. Same if you make things that are fattening and you can see that governments all round the world are trying to tackle obesity.
- In order to make that money and make a difference, businesses have three areas they can influenceFirst, they can change the way their own operations work.Through their own emissions and actions – TUI Travel?
- Through their own products, raising awareness that they’re more sustainable – Ikea is a great example of this right now, M&S does this really wellEven with the best of intentions, a company cannot manage its impact without actively engaging its customers and encouraging them to consider more sustainable lifestyles. So the more advanced ones see their responsibility as going further, into their supply chain and influencing consumers through brands and marketing
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- So the more advanced ones see their responsibility as going further, into their supply chain and influencing consumers through brands and marketing
- Don’t buy shampoo – buy nice hair. Don’t buy a car –buy a means of transport, status symbol, or both.They are very good at convincing us to buy their stuff and brands/marketing are the way they do it. Brand is set of intangibles associated with a product.The crux of it is that brands help set social norms. They’re not the only thing that does so, of course, governments, influential thinkers, the church, etc. – but as our collective faith in authority has taken a nosedive, they are one of the strongest. Their influence extends a long wayDeodorant example
- So, if they’re good at setting social norms, they must also be good at changing them. This is my current favourite quote about brands and their potential impact.NEW SUGGESTIONS is what brands do best. Because they’re not democratically elected, they don’t need to wait for customers to tell them what they want before they innovate. Apple never asked me. Similarly, if Ikea wants to sell only energy-efficient lights, which they’ll do by 2016, they’ll just do so. And because they do, it will become normal.Let me share some examples of companies using their brands and influence to make positive changes in the world.
- Sainsbury’s launched I’m Not A Plastic Bag with AnyaHindmarch for £5 to raise awareness of reusable bagsPeople queued for hours to buy one, all sold out within an hour, went on eBayLater found to have been made in China, using cheap labourLesson: check all aspects of sustainability!
- Lifebuoy is one of Unilever’s oldest brands, started in 1894 in England by Lever Brothers.Although it’s no longer sold here, it’s the world’s leading “health soap”, sold mainly in developing markets.This brand has a social mission: by 2015, to change the hygiene behaviour of 1 Billion consumers across Asia, Africa and Latin America, by promoting the benefits of handwashing with soap at key occasions, thereby helping to reduce respiratory infections and diarrhoeal disease, the world’s two biggest causes of child mortality. They came up with one of the biggest behaviour change programmes in the world, teaching schoolchildren and their families how and when to wash their hands. The FIVE hand gesture represents the five key moments to wash your hands – bathtime, before breakfast, lunch, tea, and after the toilet.Our handwashing campaigns are designed to reach people living in countries where diarrhoeal disease is highest and where soap usage is infrequent, targeting our Social Mission activities to low income families in particular. Studies in India showed that it reduced the incidence of diarrhoeal disease by up to 40%.
- Patagonia asked people not to buy a new jacket, but to buy second hand through their own website and eBay, and funded a dedicated site on eBayAsked people to sign a pledge to “wrest the full life out of every Patagonia product by buying used when I can”BUT sales went up because people sold their old jackets and upgraded to new ones. Success or failure for this campaign?This works because it’s completely counter-intuitive. Is there anything like this that TUI could do?
- These are some of the best examples that business has to offer, and the businesses are rightly proud of them. They are pushing the boundaries of the way we see business and its role in society, and pulling in societal values to their business model. That’s a real step forward But there’s a catch. It’s the Venn diagram. There’s a whole world of social challenges – democracy, FGM, linking with local community, CONSUMING LESS – that don’t necessarily line up with profit-making. PLUS there’s a whole load of stuff in the left hand side of the diagram that isn’t good for the planet or people, and there’s nothing within the business model to stop you doing them.So using brands to get us to change our behaviour can get us somewhere, but only so far. iterations of the same business model. Using our need for status to sell more stuff. You can’t shop your way out of serious climate change. Make no mistake: how and what you buy can help, but it’s not the solution. And no company has yet come up with a way to reconcile this, which isn’t surprising as their business models are predicated on getting us to buy stuff. Plenty of people would say, we need to be less status-driven, and maybe we do. But I’d argue the challenge is not for us all to suddenly renounce millions of years of evolution by not seeking status at all, but by becoming smarter at fulfilling those needs and desires in a way that doesn’t harm the planet.
- If it occurred only in the minds of individuals (as to some degree it already has), it would be powerless. If it came only from the initiative of the state, it would be tyrannical. My message to you is that those groups can come from lots of differnt places. There are plenty of people working in big businesses, the traditional baddie of environmentalism, who would like to see businesses and brands be one of the groups reinforcing the tradition of finding new ways to meet our needs in a way that’s more sustainable.We’re at a bit of a crossroads with this – some businesses are charging ahead and others have barely started. And we don’t know how far business will go in its responsibility towards humanity, and what will be the responsibility of governments and civil society.But