Speech at Base, Mar 2010
I believe that in years to come we will look back on 2010 as the year that marketing and sustainability departments finally got it together, and started working together. This moment has certainly been a long time coming – when I started Good Business over ten years ago, people thought I was crazy when I suggested that marketing could be the vehicle for delivering sustainability goals and objectives, but it looks as if the rest of the world is finally catching up.
So, what’s behind this sea change? Well, looking closely, I think we can identify four main drivers.
First, in most large companies, corporate responsibility, or sustainability teams are well established and embedded, and are doing a good job of managing social and environmental risks effectively. In the past, senior people were understandably nervous about going out and talking to consumers about social and environmental issues. There was always that worry about whether your own house was in order or not. Now, further down the track, that worry has for the most part disappeared, and brand and marketing teams can be more comfortable talking positively about social and environmental issues without worrying that there is a skeleton lurking in the corporate closet.
In our experience, some really strong and innovative brand leadership concepts fell at the final hurdle – the boardroom – because senior management weren’t confident enough in their own risk management systems to put their brand on the line. During what we call “the reporting era”, companies went through a phase of assessing their impacts, measuring them and reporting on them. It was bureaucratic, heavily reliant on process, and had little emphasis on changing anything. But it was a fundamental first step in allowing businesses to become more ambitious and more confident about how they use their biggest assets, their brands, to facilitate change externally.
The second factor is the way that climate change has shot up the agenda over the last five years or so. Since 2005, businesses have woken up to the need to fundamentally change the way they do business to reduce carbon emissions from within, rather than outsourcing responsibility for carbon reductions through offsetting. This led people to realise that it’s often not actually that hard to deliver real change within a business and that when you are in control of a situation, the effects are stronger and longer lasting than when you aren’t. Most importantly, they realised that their reputation and standing among stakeholders increased more when they took action themselves than when they simply supported someone else’s actions.
However, this created a challenge. In most companies, consumers, the media and most other stakeholders have an opinion on and relationship with the brands within the company’s portfolio, rather than with the company itself. Therefore, making a big change in the way you do things that will really resonate with your most important stakeholders – your customers – means doing this through your brand, and your marketing activities, not through your corporate vehicle.
We hear it all the time from people we speak to. They tell us that they are doing all this great, innovative, effective work, but that no-one knows about it, and it’s not doing anything to improve their reputation. But of course, if you don’t tell people about it they won’t know about it. You wouldn’t launch a new product without marketing it, and you shouldn’t expect your customers to know about your inspirational social and environmental activities if you don’t tell them about it through the same channels.
And then along came the recession, and with it the final two reasons why 2010 is the year that sustainable marketing will become the new marketing paradigm.
The recession has held back many companies who might have been ready to move further and faster over the last two years. A combination of severe budget cuts, and a sense that the time isn’t right to launch something new, have arguably stifled innovation in this area. As the economic landscape starts to look a little less bleak, projects that had been put on the shelf are being dusted down and revisited.
And finally, this has been a fascinating recession in terms of consumer behaviour. Through our monthly Concerned Consumer Index poll with Populus for The Times, we track consumers’ attitudes to the interaction between business and society and the environment on a regular basis. What’s been interesting is that although the importance that consumers place on value for money has, unsurprisingly, increased, there has been no marked reduction in their desire to see companies put values at the heart of what they do, even if it means the products and services they buy cost a little bit more. Emphatically, consumers are telling us they do not want to value to be at the expense of values.
So, coming back to 2010 – there are lots of reasons why we’re going to look back on this year as the year that something fundamental changed in the marketing world. “Niche” brands like innocent and the Co-op bank have always done well by putting social and environmental issues at the heart of what they say and do, but 2010 is going to be the year that mainstream brands embrace this like never before.
We will witness new brands coming to market. It seems inconceivable now, in many sectors, that a new brand would not have some overt sustainability credentials. Could you really launch a new coffee brand without some sort of Fairtrade accreditation? No cleaning product could expect to get away with no reference to the environmental impacts of its ingredients – look at the dramatic success of the Method brand since its launch in 2006. And ads for cars more often than not have a strong environmental message. It’s not always done particularly well or effectively – look at the Superbowl ads for the Audi A3 TDI – but it’s done.
We will see iconic and established brands start to talk about their “inner sustainability” – witness the repositioning of brands like Ariel and Kenco in recent years. We are working with lots of well known consumer brands to assess and analysis their social and environmental impacts, both good and bad, and to work out how they can make a positive difference, and then use that in the overall positioning of the brand. The pace is really picking up here – M&S’s recent launch of the second phase of Plan A, and its stated commitment to become the world’s most sustainable retailer by 2015 has thrown the debate about the role that consumer-facing businesses can play in society wide open.
The discussions aren’t without their challenges, particularly when a client has a stable of similar brands. Take a supermarket’s chocolate range. Does it try and offer the consumer a range of chocolate, from basic, no-frills chocolate through to organic and Fairtrade-certified? Or does it engage in choice editing, and make a values judgement about what it believes is right, saying something in the process about the type of business it sees itself as being, just as Sainsburys did last year when it opted to only sell Fairtrade bananas at no extra cost to the consumer but at a cost to its own margins?
And when a brand itself is global, this becomes even more challenging, as different social and environmental impacts will have different resonance in different markets – a toothpaste brand that doesn’t require water may be a strong proposition in countries where water is scarce but will fare less well in countries where water is plentiful.
So there are, clearly, some challenges. And there is still some residual nervousness amongst marketers about whether they can legitimately talk to consumers about social and environmental issues. A little nervousness is no bad thing if it curbs some of the more excessive claims we have seen in the past. But that aside, I do firmly believe we are reaching a tipping point. A point from which there will be no going back. If the successful brands of the 20th century were built upon a strong consumer proposition, the successful brands of the 21st century will be built on a strong consumer and social proposition. Those brands that can demonstrate to customers that they take their responsibilities seriously will be rewarded. Those brands that can demonstrate mutual benefit will be the ones that survive and flourish.
Thank you.
