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• The End of Frivolous Luxury?

Overview:
We approached 21 business leaders and asked them 2 open-ended questions:

Will the sustainability movement be the way out of the recession?
Is “green” marketing currently a good investment?

What we got in return was a mix of futuristic visions, tried and true economic theory and tentative skepticism. Yet, one thing that they all agreed upon was that the world is in a very difficult place economically and environmentally at the moment, and if there is one guiding principle that will help us through the mire, it is sustainability. As Alex De Laiglesia puts it, the sustainability movement “will steer the world towards the development of a new, more global and stable political, economic and social order.”

Our Panel:
John Viera, Director, Sustainable Business Strategies, Ford Motor Company
Brian Back, Founding Editor, Sustainable Industries
Jill Bamburg, Dean Emeritus, Core Faculty, Bainbridge Graduate Institute
Patricia Scharlin, Principal, Environment Group LLC. and co-author of Smart Alliance: How a Global Corporation and Environmental activists Transformed a Tarnished Brand (book info)
Ian Fowler, former Director of Financial and Corporate Communications, BP America
Dave Aznavorian, Vice President, Marketing, Earth, Inc.
Mary Jo Viederman, Former VP of Communications and CSR, Lindblad Expeditions
Steve Hayden, Co Chairman, Ogilvy
Joe Garcia, VP, Dale Carnegie Training
Dan Viederman, Executive Director, Verité
Claudia Deutsch, former Business Reporter for The New York Times
Tom Pederson, Chief Learning Officer, Shinsei Bank
Grace Kataoka, Former Head of Corporate Sustainability & Philanthropy, Shinsei Bank
John Connelly, Manager, Outdoor Discovery Schools, L.L. Bean
Shannon Stowell, President, Adventure Travel Trade Association (ATTA)
Anne Smith, Brand Manager for Portfolio Communications, Frito-Lay
Suzanne Apple, VP Corporate Partnerships, World Wildlife Fund (WWF)
Ronald Sanabria, Sustainable Tourism Director, Rainforest Alliance
Kristin Canning, Corporate Relations Manager, Pathways Foundation
Jay Coen Gilbert, co-founder, B Corporation
Patrick Lauer, CEO, DeLonghi (Japan)
Alex De Laiglesia, Manager Director, Banco Santander (Hong Kong)

The Big Picture:
According to the 2009 World Economic Situation and Prospects Report, "the world economy is mired in the severest financial crisis since the Great Depression." The statistics are scary and the business community is dealing with staggering losses, which threaten every industry in new and unforeseen ways. There is a pervading sense, that if dramatic shifts in the way that we do business isn’t made quickly, that the downward spiral will continue towards economic disaster. So how do we fix it? How do we pull ourselves up and find positive solutions to such overwhelming problems?

Green Team, and our panel of business leaders, are not so idealistic as to say that sustainability and triple-bottom line business is the way out of the recession, but our combined experience says that both certainly are very important pieces of the pie, and those businesses that take them to heart may just come out of this mess stronger. Jill Bamburg had a great point when she told us, “The economic crisis has brought our culture to a point of what Karl Weick has called ‘unfreezing’. This is a time when the old patterns are broken and the new patterns have yet to take hold. Those of us in the sustainability movement have an opportunity at this time to move the culture in a new direction before it ‘refreezes’.

The Economy and Sustainability:
With “the rising cost of carbon moving forward, it will be the companies that have sustainability as part of their core strategies who succeed financially” (Viera)

“This is an opportunity to showcase and export innovation… an opportunity to strengthen regional economies”  (Back)

“We will be forced to reduce our spending and begin to return to living within our means – and within the means of the planet” (Bamburg)

“The collapse in trust in capital markets will force regulatory controls, and there will probably be a shift from executives focusing primarily on short-term profits to that of long-term sustainability, in order to restore public trust.” (Kataoka)

“It is becoming increasingly apparent to investors that conventional methods of analyzing corporate financial statements is no longer sufficient, since nontraditional drivers of value are not assessed even when the latter can be the most important distinction for competitive advantage.” (Kataoka)

“While shifting the paradigm to alternative fuels and other green practices is critical for the sustainability of our host planet and our world as we know it, the opportunities need to be appetizing to capitalists.” (Connelly)

“In times of economic uncertainty, sustainability is not an expendable luxury, but an indispensable way to compete.” (Sanabria)

“The sustainability movement will be the way to a sustainable and inclusive economy, but even such an economy will not be immune to business cycles.  Sustainable businesses, however, may weather downturns better because the way they do business elicits employee, supplier, and customer loyalty.” (Coen Gilbert)

"For sustainability initiatives to have a long term, meaningful impact, they need to be built into the overall business strategy. Regardless of the economic environment, robust sustainability programs benefit the business—cost savings being one of them. At the same time there’s environmental benefit—conserving vital resources and reducing a company’s overall impact. With this approach, when economically challenging times hit, sustainability is part of the solution rather than a dispensable line item." (Smith)

In what form will we start to see sustainability-based solutions?
Energy policy (

Viera); Tax incentives (Bamburg); New green manufacturing jobs (Back); Cleantech innovation on the scale of Silicon Valley (Fowler); Corporate incentives (Aznavorian); Capacity building (Pederson); Stimulus Money (Hayden); Transparent and comprehensive standards (Coen Gilbert); Less can be more (Lauer).

The Value of Green Marketing:
“Green marketing is indistinguishable from greenwashing. Everyone has blue skies, green grass and windmills in their ads. Consumers support companies they trust.  Trust is built through transparency and third party validation, not through first person marketing claims.” (Coen Gilbert)

“Green (as it is most commonly used) isn’t the right frame. Good is the right frame. And the question is how do we distinguish between ‘good companies’ and just good marketing. (Coen Gilbert)

“Marketing focused on value will appeal to more of the masses at this time.” (Viera)

Green Marketing is a good investment if “you explain it in ‘real’ tangible storylines…showing a social mission, authenticity and transparency… Don’t be green. Be remarkable”. (Back)

“In regards to marketing green products, I think this MAY be a good bet, particularly if you can be first (or biggest) in the category. Overuse of green claims has made consumers skeptical, so I’d say the product had better deliver. Even then, it’s no guarantee of success in an economy where people are shopping for “value.” (Bamburg)

“The more birds on the cover of an annual report, the more suspicion we, and consumers have of the value given to protecting the environment. Consumers need to see measurable results.” (Scharlin)

”Green is now an expected part of the brand promise and companies ignore that at their peril.” (Fowler)

“Green marketing’ is good if it’s authentic to who you are, and certainly better for those companies that cater to a customer/consumer who’s willing to accept that there may be implied costs they’ll need to pay for it.” (Aznavorian)

“It is no longer a question of whether “green” marketing is a good investment but rather that it is now necessary to differentiate yourself in an increasingly “green” market through effective marketing that lends credibility to your brand and builds consumer loyalty.” (De Laiglesia)

If marketers can “capitalize on long term, optimistic, strategic thinking and growth, we will do good work and well for ourselves.” (Viederman)

“Every indication we have is that consumers’ preference for brands that represent green choices is continuing and building, along with their rejection of companies and brands that don’t.” (Hayden)

“Green is a good investment, as it will ultimately become an issue no company or government can ignore. It’s just on hold right now, but it will become THE issue of our times.” (Garcia)

“A green marketing plan without a corporate investment in substance can obviously backfire in a market where accountability, ethics, and transparency are now being demanded by various stakeholders.” (Kataoka)

“People now during these times are looking towards themselves, their families and what is important in life, when so much has been lost. This is when social and green marketing will resonate strongly.” (Canning)

In Conclusion
As this issue of g-Think goes to "press" (as much as an e-newsletter ever can), the economic crisis seems to show no sign of abating. Economists have pretty much written off 2009, and are hoping for the first signs of recovery to emerge next year. The magnitude of economic and societal change this crisis will bring about increases along with the length and depth of the crisis itself.

As our panel of experts states, the components of sustainable development will play a critical role in rebuilding the way the world goes about its business. Companies and brands would be wise to keep this in mind as they go about shaping their marketing messages and strategies, but only if their actions match their words. Awakening Consumers’ quest for authenticity is shifting to more of a demand for authenticity, especially in the realm of sustainability. Poseurs will be punished, but the genuine will survive.

Photo credit: clearlyambiguous