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Climate change awareness has crossed a tipping point. This discussion has shifted from ‘is it going to happen?’ to ‘what will the impacts be and how can we best respond?’ Enlightened business leaders understand that reducing their environmental impacts shouldn’t be an additional cost, tacked on to their operations but an integral part of their business strategy. The reasons are manifold; reducing emissions improves business efficiency; builds brand loyalty (consumer and investor) and motivates employees. All of which increase the bottom line. Putting money into environmental performance is no longer a cost; it is an investment.
As consumer, investor and legislatory pressure build the return on investment of reducing impacts increases. This is an opportunity few companies can afford to miss. For a company to position itself as green it must be able to back up claims with evidence. Just reducing emissions by 20% isn’t good enough anymore; that’s standard practice in a warming world. Consumers want to have confidence that brands have a bullet proof sustainable and ethical approach.
Transforming a company so that it is socially and environmentally acceptable requires vision, strong leadership, innovation and good management. For companies without these skills ‘green washing’ can be a seductive option. Green washing describes the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service. It is easily detectable when it is clear that a company has spent more money on eco communications then eco implementation. Familiar examples are chemical homecare products with ‘natural’ branding or oil companies whose advertising focuses on renewable energy whilst their underlying business model remains the same (or worse).
Green washing is not a successful strategy for companies to pursue. Firstly, it puts off making changes that will be necessary at some point. This delay gives competitors a head start in innovation and effective differentiation as an environmental choice. Secondly, it risks damaging consumer and investor faith in the brand should the disparity between green claims and performance become known. Once broken, trust is hard to rebuild and people are already cynical; four in five people believe that many companies pretend to be ethical just to sell more products. Any claims must be genuine and provable.
It is a sounder strategy for a company to invest in environmental performance rather then exaggerated green claims. Today, consumers, employees and stakeholders are increasingly engaged in ongoing, 2-way relationships with brands. For example, the evolution of the internet has meant that popular brand websites listen as well as talk. Indeed for many leading brands user driven content makes up an increasing component of their sites. For example the interactive sections of these websites of Howies, Timberland and lush. The more ethical a company the more comfortable it will be entering into a dialogue with its customers.
Web 1.0 saw the development of content. For brands this was a new communication channel with which to talk to consumers. Web 2.0 saw the development of web platform’s on which users can participate, upload exchange, share and generate content. For brands this was an opportunity to open a dialogue. Web 3.0 sees the devolution of content management shift further towards users. Increasingly all consumers will continuously rate content meaning that the internet is shaped by what people value. Successful brands will increasingly be co created by consumers.
Business on a networked planet is different. It is becoming harder for companies to operate behind closed doors and with people providing real-time feedback on performance a misstep can be costly. One just needs to Google a brand name to find out what has been posted about the brand by satisfied or unsatisfied consumers. With access to more information then ever at the click of a mouse a company dumping toxic waste in Africa (e.g. Trafigura) or destroying pristine rainforest in Indonesia (e.g. Fonterra) or attempting to ‘ethnically cleanse two of the world’s last remaining uncontacted tribes‘ in the Amazon (e.g. Perenco) can be globally shamed in minutes. Transparency has become the golden rule for successful operations.
For businesses to create value without eroding natural systems the best approach is to embark upon an honest journey to sustainability with consumers and investors on board. Transparency, interdependency and interconnectedness are defining characteristics of both the evolving internet and the coming ecological age. So shitty companies run by blood-sucking scumbags who want to slice up what’s left of the biosphere and sell it at the highest price beware your days are numbered.
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