2. Directions Supplement
June 10
Is your brand sustainable?
Nigel Salter First, it was the NGOs who were asking. Then it was consumers and
salterbaxter
employees (some, admittedly not all). And now it is the investment
community and their advisers. So, if your company hasn’t begun
to integrate sustainability into its brand, perhaps this is the wake-up
call that will prompt action. Because the alarm bells are ringing.
Here are two recent examples that “Companies can reap profits from consumers’
demonstrate the pressure for smart social and environmental concerns and the
sustainability thinking in brands is now understanding that resource scarcity will
coming from across the full spectrum of result in a permanent change to business
stakeholders. The first is from Goldman models. In our view, the third industrial
Sachs Sustain: revolution will on one hand save the planet
and on the other accommodate the consumer
1
Goldman Sachs, Global Investment “We are approaching a tipping point at explosion we expect in the coming decade.”
Research, Change is coming: which these issues’ (environmental and
A framework for climate change –
social) importance to business performance Whilst the prize might be becoming
a defining issue of the 21st century.
and investors will escalate. The equity increasingly clear, the ways of reaching that
market is only just beginning to reflect the prize are still being explored and uncovered.
magnitude of change that lies ahead.” 1 In this Directions supplement, we highlight
four companies who are already redefining
2
ING Equity Markets Research, The second example is from ING2, and one their brand and marketing strategies; we
The third industrial revolution: of their Equity Markets research papers hear from Interface, one of the pioneers in
Multi-committed company
focusing on the Food, Beverages and HPC sustainability, on what they have learnt on
(MCC) – the archetype to capture
consumer loyalty.
sector, with the telling title of ‘The Third the dos and don’ts of creating a sustainable
Industrial Revolution’. The writers clearly brand; and we provide two different
state that the eight interdependent crises perspectives on how consumer power
that we face (demography, ethics, social- is influencing a change towards more
economic, food, water, climate, energy and sustainable practices. We finish with a look
political) will be the catalyst for the Third at the relationship between sustainability
Industrial Revolution, which they define and innovation. The response to the
as being real responsible and sustainable challenges we face requires innovation like
growth. And they see companies which never before. There are no set rules and no
redefine their business models to include easy formulae – but where would the fun be
responsibility in their marketing and sourcing in that?
as being in the position to pick up the prize
of ‘hard’ business benefits of lower costs from
supply chain synergies and higher sales.
Approaches to creating a sustainable brand
Olivia Sprinkel Each company’s approach to creating a sustainable brand will be
salterbaxter
unique, depending on the company’s culture and brand, sector,
issues and audiences. We have highlighted here four different
approaches – stakeholder engagement, company as educator, hands-
on involvement and partnership. In reality, a successful strategy is
likely to include all these elements in varying proportions, but
successful companies will have a clear focus for their strategy. And
they tend to share the same fundamental characteristics: leadership
vision; internal engagement; high-profile, consistent communications
and long-term commitment rooted in the values of the organisation.
3. Four approaches
1) GE – stakeholder engagement 3) Pepsi – hands-on involvement
GE’s journey towards being a sustainable from consumers
brand began in 2003, driven by customer Pepsi’s approach has been based on getting
pressure to improve efficiencies and reduce consumers involved hands-on. A high profile
emissions. GE’s response was to create a example of this is Project Refresh in the
space for engagement and imagination US, which invites users to vote for community
within the business, listening to stakeholders, projects that they would like to see funded.
including customers, government and NGOs, Pepsi have diverted traditional television
and challenging them to imagine what their advertising spend to this project, recognising
world was going to look like in 2015 and that increasingly companies are going to be
beyond. From this the ‘ecomagination’ finding other ways of building brand awareness
strategy was born, and engagement has and loyalty, often with sustainability as a
continued to be central to ongoing activity. central component. In April 2010, PepsiCo
Lorraine Bolsinger, formerly vice president also launched the Dream Machines initiative,
of ecomagination, said “We can’t put a stand together with Waste Management and Keep
up once a year, run a few commercials, and America Beautiful. This project, which provides
say ‘This is what we’re doing’. We have to be on-street recycling points, has the aim of
diligent every month on bringing new stories increasing recycling rates in the US from
to our colleagues, our customers, and NGOs. 34% to 50% by 2018. Whilst the project has
That engagement is a huge ongoing issue”. been attracting criticism from some quarters
In the last few years, online engagement for greenwashing, at the very least it is
has been central to ecomagination’s success, raising awareness about recycling amongst
with traffic and length of user visits to American consumers and encouraging them
ecomagination.com outstripping that of other to take action.
CSR websites such as Chevron’s ‘willyoujoinus.
com’ and Coke’s ‘makeeverydropcount.com’. 4) Cadbury’s – the partnership approach
And GE’s brand has benefited as well – an Cadbury’s, founded on Quaker principles,
online video tracking survey showed brand has carried this partnership approach to
favourability of 45% for non-viewers of the ethical business through to the present day.
videos on ecomagination.com, rising to 75% Partnership is evident in both their actions
for video viewers. Inspired by the success and in their tone of voice. Their current
of ecomagination, GE have now launched advertising is focused on promoting the
‘healthymagination’, focused on creating partnership that they have with their suppliers.
better health for more people. Engagement The Cadbury Cocoa Partnership was founded
leads to stories, which in turn stimulates the in 2008 in partnership with the United Nations
imagination – and the innovation for which Development Programme, local governments,
ecomagination has become known. farmers and communities. It has the ambitious
aim of securing the economic, environmental
2) E.ON – company as educator and social sustainability of approximately one
There are no easy answers in the energy million cocoa farmers and their communities
debate. Rather than shying away from this, in Ghana, India, Indonesia and the Caribbean.
E.ON UK has recognised that they need to Companies are recognising that the issues
take the lead in educating consumers about raised by sustainability demand a new approach
the need to change energy consumption to doing business, one which is rooted in
habits and building awareness about the collaboration and partnership, as the issues
options for different sources of energy, an are too big for companies to tackle alone.
important element of their ‘Changing Energy’
strategy. Firstly they have opened up a space
for engagement and debate with their
‘Talking Energy’ campaign. Advertisements
ask questions such as ‘Why would an energy
company want me to use less energy?’ and
lead to online discussion areas including
YouTube. This is now being followed up with
the Energy Fit campaign, developed in
conjunction with an online panel of 15,000
consumers. The panel told E.ON that they
wanted tools and tailored information to help
them reduce energy use. So as part of the
campaign, E.ON is making energy monitors
available to customers. Educating is not a
one-way street, but a dialogue, in which
listening plays an important part.
4. Directions Supplement
June 10
InterfaceFLOR’s six dos and don’ts
for creating a sustainable brand
Ramon Arratia A sustainable brand cannot be achieved with a marketing agency
Sustainability Director
EMEAI, InterfaceFLOR
brief. As consumers have become more aware of sustainability issues
such as climate change, marketers are rushing to ‘green’ their brands.
Too often this is approached as a ‘sticking plaster’ when what is
needed is a completely new ‘healthy life-style’.
Interface’s sustainability strategy, Mission we have been lucky as many business leaders
Zero, was conceived in 1994 and we have genuinely try to start the change towards
learned many important lessons in our journey sustainability, but lack the commitment and
to embed sustainability into our organisation, longevity in office to succeed.
our products and our people. Mission Zero
has been so effective in defining our brand Don’t: Think you can ease sustainability in
that Interface tops the Globescan survey of from the bottom-up.
over 1,500 opinion formers in 90 countries.
We receive more unprompted mentions as 4. Do: Shout about the business case
a sustainability leader than any other We made sure our people could clearly see
company, including many that dwarf us in how sustainability would benefit Interface’s
size and profile. business. Results came quickly. As we worked
towards Mission Zero, costs went down not
Here are our six dos and don’ts for creating up, exposing the myth of a choice between
a sustainable brand: environment and profits.
1. Do: Set seriously ambitious goals And the business case soon became
Mission Zero’s strength lies in its boldness. stronger as our customers increasingly
In 1994, this radical long-term vision wanted to buy more sustainable products.
immediately attracted attention. At the time We became the sole carpet supplier for
some people told us it was naïve to think government buildings in a country where
zero environmental impact achievable. But 60% of the points were awarded for
it has inspired fundamental changes in the sustainability criteria, for example.
way people work at InterfaceFLOR precisely
Don’t: Rely on doing good as your argument.
because it is so challenging.
Profit is essential.
Don’t: Set your sights too low with
unchallenging short-term targets. 5. Do: Make sustainability personal –
Sustainability transformation requires one mind at a time
disruptive innovations. An engineer is turned on by machines. Give
them a technical challenge. A sales person is
2. Do: Address the elephant in the room turned on by sales. Give them a sound sales
InterfaceFLOR’s sustainability strategy argument. Sustainability communications
gained credibility because it addresses our must be segmented.
material issues, even the biggest challenges
that aren’t easy to solve. In our case it was Don’t: Have top down, celebratory, positive,
cutting the umbilical cord to oil, with one of biased, non-segmented internal comms.
our main raw materials – nylon yarn. 6. Do: Use sustainability as a source
Don’t: Focus only on easy wins or non-core of innovation
business issues like philanthropy. Putting sustainability at the centre of
everything we do has helped us come up
3. Do: Sign up your CEO with ground-breaking innovations such as
High visibility leadership and commitment Tactiles™, our adhesive-free installation
from the top of the company have been vital system. Sustainability has helped our
in demonstrating that Interface is serious business expand into new markets and
about sustainability. Founder and Chairman, create a competitive edge.
Ray Anderson, has relentlessly engaged
employees and external stakeholders for Don’t: View sustainability solely in terms of
fifteen years on the subject, believing he must corporate behaviour. Product performance is
convince people ‘one mind at a time’. In this where the real new market opportunities are.
5. The technology that is making
sustainability transparent
Nigel Salter Imagine a world in which consumers can scan the barcode of
and Olivia Sprinkel
salterbaxter
a product in the shops with their phones and access detailed
information about the company’s sustainability performance.
That world is already here. The Good Guide A choice for companies
iPhone application in the US and the Barcoo So there is a choice for companies to make.
iPhone app in Germany does just that. The They can let consumers seek out information
Good Guide, available online as well as an app about their products online, via their mobile
(www.goodguide.com), contains ratings for or from information provided by the retailer.
over 65,000 products, from food to toys to Or companies can be proactive in starting a
personal care and household products. It conversation with the consumer and
provides health/nutrition, environmental and encouraging them to find out more about
social ratings, with the ratings compiled from where the products come from and what they
a series of databases. are made of, guiding them through the
product journey, helping them to make a
Shopping by values positive choice to buy the product and to feel
But will anybody use it? According to the good about doing so. In this way, sustainability
Co-operative Bank’s Ethical Consumerism can be integrated into the brand experience.
Report 2009, 64% of UK adults say that For example, Coca-Cola in the UK have an
they have avoided a product because of a application on their website, where you can
52%
company’s behaviour, 52% of UK adults claim type in the first two letters of a code on the
to have a bought a product primarily because can or bottle, and this will tell you where the
of ethical reasons and 39% of people have Coke began its journey to you. This provides
actively sought information on a company’s a neat way in to engaging you with the rest
of UK adults have bought behaviour or policies. These figures suggest of the product journey and what Coca-Cola
a product primarily for that people are increasingly taking into is doing to minimise impact, from ingredients
ethical reasons account a company’s behaviour as part of to distribution.
their purchasing decision, and if it as easy
as scanning a product in a shop, the number Of course, this approach is dependent on
of people who actively seek out information having the performance to support such
will surely only increase. The advent of such transparency – but if consumers are
applications means that increasingly there demanding it and purchasing decisions are
will be no place left to hide for companies – increasingly dependent on it, then companies
consumers won’t have to dig deep into CR will need to up their performance accordingly.
reports to find information, it will be there
in the palms of their hands. The trend towards
transparency and consumers shopping by
their values will push companies into
64%
integrating sustainability into their brands,
whether they like it or not.
Online information and mobile phone apps
are only the beginning. According to Daniel
Goleman, author of ‘Ecological Intelligence’, of UK adults have avoided
some retailers are talking to Good Guide about a product because of a
putting its product ratings next to price tags company’s behaviour
on shelves. And a good rating could soon be a
pre-requisite to getting your product on the
shelf in the first place – some retailers are
starting to use Good Guide as a screen in
deciding which products to stock.
6. Directions Supplement
June 10
Ethical business – why it’s not just
the suppliers who benefit
Michael Gidney Leading businesses ignore human rights, environmental and pay
Deputy Executive
Director, Fairtrade
and conditions issues at their peril. Failure to abide by the spirit
Foundation of protocols and laws can exact a hefty price if new in-depth
research* commissioned by the Fairtrade Foundation is anything
to go by. This shows that one in five British consumers punish
socially irresponsible companies through their shopping choices.
And, within the committed Fairtrade consumer True, the UK’s overall grocery sales top
sector, this rockets to more than two-thirds £120 billion, but against all market predictions
who say they always or often punish that Fairtrade would only be a temporary
companies for not being socially responsible. fad the sector year-on-year posts sales
growth that far outstrips the conventional
That’s the stick. market. Furthermore, Fairtrade has become
a gateway – a point of difference – for major
The carrot comes in the shape of huge
brands in a way that sees huge financial and
brand loyalty for companies who make a
reputational benefits.
point of doing the right thing. In fact nearly
a third of consumers, according to a poll of Incredibly when asked to spontaneously
1,500 consumers undertaken by Globescan, name any ethical product label, one in three
are likely to reward companies for being
“The carrot socially responsible.
shoppers cited the Fairtrade mark – 20%
above other labels.
comes in the It’s proof that placing importance on
sustainability – whether it is paying a fair
Within the Fairtrade movement, we see
shape of huge price to farmers in the developing world for
growing evidence that companies and brands
that become Fairtrade certified more often
brand loyalty commodities or reducing a firm’s environmental
footprint – pays huge dividends.
than not see sales and reputational uplifts. It
may explain why Starbucks, on the receiving
for companies Look at how the Co-op and Sainsbury’s
end of some unfavourable press in recent
years, markedly increased its Fairtrade coffee
who make a supermarkets have fared since scaling up their
work with Fairtrade. The Co-op was the first
offer last year.
point of doing UK retailer to sell Cafedirect coffee, Fairtrade Marks & Spencer, the UK’s biggest clothing
the right bananas and wine. Its strategic decision to sell
as many Fairtrade products as possible is by
retailer, has committed to sourcing Fairtrade
cotton and food goods as part of its Plan A
thing” no means a direct reason for it becoming a
fifth force in British supermarket retailing.
mission aimed at reducing its carbon footprint
and becoming a fairer business partner with
But its Fairtrade shift has played a part by its suppliers. It is a policy born out of
tapping into UK shoppers’ sense of justice enlightened self-interest. Consumers want
for producers in the developing world. competitively priced goods but not at any
price. It is clear shoppers are concerned that
Likewise Sainsbury’s, under the leadership
workers in developing countries receive a fair
of Justin King, has shifted all its own brand
wage. And Fairtrade is undoubtedly seen as a
bananas, sugar and tea to Fairtrade. Not only
way of guaranteeing they benefit.
did the move transform the fortunes of
communities in some of the world’s poorest Consumers know what they want. So
countries but it coincided with Sainsbury’s businesses these days cannot afford to come
sales growth through a recession. And, in up short. And when you think about it, that’s
bananas, Sainsbury’s shift to Fairtrade saw fair enough.
an overall significant sales rise.
Ethical consumerism is now part of the retail
mainstream. And Fairtrade is leading the
charge. Retail sales in the last 12 years have
risen from £16m in 1998 to £800m in 2010.
*http://www.fairtrade.org.uk/press_
office/press_releases_and_statements/
may_2010/millions_of_uk_consumers_
punish_businesses_who_dont_treat_
workers_fairly.aspx
7. Sustainability: the key driver of innovation
and brand value
Elisabeth Laville In the future, only companies that make sustainability a strategic
Founder and chief
entrepreneur of Paris-based
goal, rethinking their business models as well as their products,
consultancy Utopies technologies and brand promise, will achieve competitive advantage.
The days of the traditional corporate social In this post-Copenhagen world, the most
responsibility (CSR) approach are over. advanced businesses are developing an
Focused on industrial practices and internal innovative approach to innovation itself, in
processes, it was put in place mostly out of order to solve environmental and social
a defensive approach – aimed at anticipating problems that governments too often fail to
new regulations, preventing image crisis, address. They offer dematerialised services
reducing costs and preserving the company’s as an alternative to resource-intensive and
licence to operate. But in most cases the waste-generating products: Apple has passed
business model remained unchanged and Wal-Mart to become the biggest music retailer
unchallenged. Even if ‘green’ or ‘responsible’ in the US. They see nature as a teacher, not
products were launched, they were not as a supplier, developing nature-inspired
seriously promoted, thus accounting for less innovations: take the example of a biomimetic
than 1% of their market (see fairtrade coffee, air-conditioning free building, inspired by
sustainable tourism, organic food, ethical termite mounds. They choose open-source
investments, etc.). And CSR fell short in approaches to innovation rather than
solving the social and ecological challenges, confidential and secret-driven ones – can one
because corporate practices only affect a tiny seriously think about patenting a cosmetic
share of a business’ global impact: no matter ingredient created using a plant that Indians
how great a car manufacturer is doing in have used for centuries in South America?
deploying ISO certification on its industrial And they develop a collaborative approach
sites, and reducing the CO2 emissions of its to innovation. This might be by creating new
factories, factories only account for 12% of partnerships with NGOs: concrete-giant
the global CO2 emissions of the industry, while Cemex has efficiently addressed the market
cars account for 80% of its climate impact. of low-income do-it-yourself homebuilders by
So if we do not shift technology portfolios partnering with micro-lending organizations.
used for mobility (whether electric, hybrid,
etc.), if we do not think of alternative mobility Business models, product innovation and
solutions more sustainable than individual consumption are now at the heart of the
cars, for example public transportation or sustainability challenge: the brands that will
car sharing, and, above all, if we do not be prospering in a decade are those that
succeed in mainstreaming these throughout are radically committed to becoming more
the world, then we will fail in addressing the sustainable. Not for 1% or 10% of their
climate challenge. activities. But for 30%, 50% or 100%.
Essentially, a strong brand is an exciting
This is our challenge for the years to come: journey shared with consumers: at last, this
we need a new CSR revolution, one that will is one journey worth the effort.
go beyond risk management so as to seize
the potential for innovation and brand
differentiation brought by sustainability “We need a new CSR
when it is placed at the heart of the business
model. Because this is what is needed if we revolution… to seize the
are serious about leaving a better world to
our children and making this a real business
potential for innovation
opportunity. The English retailer Marks & and brand differentiation”
Spencer launched its 5-year Plan A in 2007
and is now committed to having 50% of its
products with a green credential in 2015 and
100% in 2020. In a like-minded approach,
Philips committed in 2007 to have 30% of its
turnover related to green products by 2012,
thus shifting the whole company’s approach
to innovation and the brand’s reputation.
8. About us
Contact:
Nigel Salter
Salterbaxter advise companies
nsalter@salterbaxter.com
Tel +44 (0)20 7229 5720
on strategy, branding, corporate
communications and design –
providing creative communications
The Directions Supplements
support our main Directions
report. The main report is
published each year and is
now regarded as the UK’s
for big business issues.
most comprehensive analysis
of the trends and issues in We work on a wide variety of corporate communications assignments
CR communications. If you for our clients including brand strategy and implementation, annual
want a copy, call us on the reports, digital communications and employee engagement. But we are
number below or email increasingly being seen as one of Europe’s leading sustainability
directions@salterbaxter.com
communications consultancies, with an unrivalled breadth and depth of
experience across multiple sectors and multiple countries. We offer a full
range of corporate responsibility and sustainability communications
services – from board level strategy consulting to the design, writing and
delivery of printed and online communications. And everything in between.
Our team of sustainability consultants is basically designed to be able to
help major corporations tackle every aspect of the sustainability agenda:
– Development of corporate and – Social media strategy
brand sustainability strategies and programmes
– Stakeholder engagement – Writing
– Reporting – Workshops and training
– Single issue campaigns – Gap analysis
202 Kensington Church Street – Internal communications/ – Research
London W8 4DP
employee engagement
Tel +44 (0)20 7229 5720 – Events
Fax +44 (0)20 7229 5721
www.salterbaxter.com Clients
Our sustainability clients are the leading corporations in multiple sectors
across the whole of Europe. Latest ones include:
UK EUROPE
The carbon impact of this paper ArcelorMittal adidas Group
has been measured and balanced
through the World Land Trust, an AXA UK Carlsberg Group
ecological charity Bacardi E.ON Group
BAE Systems Fortum
Camelot H&M
Coca-Cola GB & CCE ING Group
E.ON UK LEGO
Morrisons Marine Harvest
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