The Long Journey To Sustainability Begins With A Single Step

Awareness of global environmental change and social issues has crossed the tipping point in many places across the planet.  Events in 2007 such as the successful signing of a global treaty to reduce global green house gas emissions in Bali, Australia joining Kyoto and Al Gore and the UN’s International Panel on Climate Change winning the Nobel Peace Prize means the issues have never been far from the front pages or politicians agendas.

This is the second of recent years that the Nobel Peace Prize has been awarded to environmentalists revealing how environmental issues are becoming viewed as central to the welfare and stability of society.

Consumer and investor behaviour is also changing.  According to Sustainable Life Media, American spending on ethical goods and services is expected to double in the coming year.  By 2005, nearly one out of every ten dollars under professional management in the United States is being invested in a socially responsible way, $2.3 trillion out of $24.4 trillion.  Investment in ethical funds is booming, according to the Social Investment Forum.  This growth is set to continue.  For companies today, putting money into environmental performance is no longer a cost; it is an investment.  This investment improves business efficiency; builds brand loyalty (consumer and investor) and motivates employees.  All of which increase the bottom line.

As consumer, investor and legislative pressure builds, the return on investment of going green is increasing steadily.  This is an opportunity few companies can afford to ignore.  There is new selection pressure acting in the market place; you need environmental credentials to succeed.

For a company to become green it must change.  This requires a vision, strong leadership, innovation and good management. In other words the kinds of skills that make a successful company in the first place.  For established companies without these skills in abundance ‘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 talking about its environmental assets as opposed to actually implementing measures.  Familiar examples are chemical homecare products with ‘natural’ branding or oil companies whose logos and communications suggest renewable energy with an underlying business model that remains the same.

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.  In fact, according to Darren Davidson of Brand Republic, four in five people believe that many companies pretend to be ethical just to sell more products.  Any claims must be genuine and provable.

Companies will always be better off investing in environmental performance rather then investing in communications that do not accurately represent the company.  Every single consumer, employee and stakeholder in a brand is engaged in an ongoing relationship that is becoming increasingly two-way.  For example, new developments in the Internet allow real-time feedback on all brands. Companies can no longer operate behind closed doors.

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 with consumers.

Web 3.0 sees the devolution of content management shift further towards consumers.  All consumers will continuously rate content, meaning that the Internet is continually shaped by what consumers want and need; increasingly, brands will be defined by the stories that consumers are telling about them.  One just needs to Google a brand name to find out what has been posted by the brand and by satisfied or unsatisfied consumers.

The web enables consumers to find anything that they need to know about a brand or an individual. Transparency has become the golden rule for operating – virtually and sustainability.

The companies most successfully communicating their ethical policies are describing what they’re doing as a participatory journey, not as something they’ve already achieved.  As Patagonia put it: ‘Brand qualities are verbs, not adjectives’ – they mean nothing unless they are actually lived.  Currently, there is no such thing as ‘green’; the most absolute statement that can be made is to say the company is committed to constant ethical/environmental improvement.

The Internet is fast becoming the global brain.  Business on a networked planet is different.  People have access to more information then ever at the click of a mouse.  Communications are transformed; a company polluting a river in China can be shamed globally in minutes.  Transparency, interdependency and interconnectedness are defining characteristics of the growing Internet.

Transparency, interdependency and interconnectedness are also defining characteristics of successful sustainable implementation.  Global warming has been the catalyst, but stabilizing atmospheric pollution is just the first step on a journey to environmental sustainability.  There are many complex challenges ahead.

For businesses to create value without eroding natural systems and to be a force for good, the best approach is to embark upon an honest journey to sustainability with consumers and investors on board.

*Footnotes