Darrin Duber-Smith, MS09.15.11
By now, ingredient suppliers should be well aware of the proliferation of natural and organic products and the requisite impact this social trend has had on business in general. The concept of “derived demand” has forced organizations all the way up the supply chain to alter their product offerings and address this industry shift.
Several astute suppliers listened to market experts and recognized this paradigm shift early, earning first-mover advantages as somewhat “exclusive” providers of these ingredients. Today most suppliers have realized that high growth rates at the retail level often mean the same thing upstream in the supply chain and so offer natural and certified organic ingredients to their finished goods customers.
But wait! Demand for products that are perceived to be better for consumers and for the environment does not stop at the ingredients themselves. Sustainability and Corporate Social Responsibility (CSR) are the new order of the day, as all members of supply chains across multiple industries are under increasing pressure to comprehensively “green” their business practices. And, there are many factors aside from consumer preferences driving this trend. Lowered costs, competitive pressures, increased government regulation, global pressures, supply chain demands, and enhancing brand image are just a few of these (sometimes known as the “Green Imperative”).
So where does a company begin? How can it ensure and communicate authenticity with regard to these important initiatives? These questions can vex even the savviest of decision makers. Is it easy being green? Is it not so easy to be green? With all due respect to Kermit the Frog, sustainability initiatives are actually fairly easy to plan and implement.
The GRI and ISO-14000
These days there are numerous models you can follow as well as a variety of experts you can employ to ensure objectivity, thoroughness and an adequate level of expertise. Organizations that fail to do this have been met with mixed results. The basic idea, however, is to conduct a sustainability/social responsibility audit across a broad spectrum of organizational factors. Examples include energy waste, emissions, water, land and biodiversity, supply chain policies, HR policies, cause related initiatives and more.
After the situation has been thoroughly analyzed, measureable objectives for continuous environmental and social improvement must be set to address the areas mentioned above. This is the “plan” portion. During implementation of the plan—usually a year-long timeframe—programs are monitored and evaluation is conducted for stakeholder reporting. This is the “marketing” part. Rinse and repeat. Remember that sustainability is a business model first and a marketing strategy second.
The most influential global model for sustainability planning is probably the Global Reporting Initiative, or GRI. In 1997, GRI was launched by Boston-based CERES, an international network of investors, environmental groups and other public interest organizations to address sustainability challenges. The program produces the world’s most widely used reporting framework to maximize comprehensiveness and transparency. As such, GRI has become the de-facto international standard used by well over 1000 companies for corporate reporting on environmental, social and economic performance.
For the “über” green crowd (and especially if you have aspirations to be a global brand), it is important to obtain global certification. Those familiar with the ISO (International Standards Organization) 9000 series of global certifications for quality management may also recognize ISO-14000. This exists to help organizations minimize how their operations negatively affect the environment—i.e., comply with applicable laws, regulations and other environmentally-oriented requirements, and continually improve in these areas. Handy, eh? ISO 14000 is similar to ISO 9000 quality management in that both pertain to the process of how a product is produced. Both certifications, as is the case with Certified Organic, are conducted by third party organizations.
Communication Vs. Reality
Now that we’ve covered how sustainability planning works, we can address the principal thesis of this article… There are many shades of green—from outright “green washing” (a largely fraudulent effort to position a brand as environmentally and socially responsible) to bona fide attempts at comprehensive reform by organizations to be as “green” as they can be.
The ethical implications of all of this should be fairly obvious to the observer, but it does not matter what your actual practices are as long as your communication is transparent and truthful. Bearing this in mind, we’ve identified six archetypes, ranging from not-so-green to pretty-darned-green, so that you may better understand how sustainability initiatives are being implemented and communicated in the marketplace.
Red Marketer. According to the color spectrum, red is green’s opposite color. Red marketers are those who absolutely ignore all the principles discussed earlier. These firms are becoming rare in the industrialized world, but unfortunately still exist in great numbers in the developing world. These folks have no sustainability plan and do not communicate sustainability efforts.
Green Panderer. A panderer can be defined as someone who serves or caters to the passions or plans of others, often to make money. Thus, organizational panderers are those who pay lip service to green marketing with very little or zero commitment of resources to actually achieve any true level of sustainability. This type of company may only talk about green issues to give the impression of its participation because of market pressure or because it sees a temporary opportunity to make money by so doing. These organizations are “green washers” only to the extent that a thin, “green sheen” can be detected. Such an organization may support a cause in some minor way that resonates with stakeholders, but that will be the extent of their commitment.
Green Buffeteer. This classification of organization refers to those who choose the easiest and most obvious greening options with no attempt at transparency or commitment to continuous improvement. This shallow effort is slightly more than that shown by the green panderers but still only penetrates skin deep into business practices, thus creating a “green skin.”
Many of the green efforts with regard to these companies are socially responsive or seen to be profitable in the short and long terms. Increasingly green-sensitive consumers will easily see past this skin into the true heart of the organization and will not be fooled for long. Recycling, conserving water and reducing energy consumption are relatively easy ways to achieve some degree of sustainability without significant commitment, and the green buffeter rarely, if ever, sets measurable objectives, which make it difficult to assess results.
Light Green Marketer. These organizations have strategies to encourage consumers to see a brand that meets or exceeds all of their expectations. These strategies will normally satisfy many consumers, even those who are moderately green sensitive. Motivations for companies to adopt light green strategies range from market pressures, desire for higher profits and a more socially responsible image. Efforts by these organizations transcend the green buffeteer’s attempts at addressing the tastiest morsels in that more areas are addressed. The organization sets measurable objectives across a few areas and endeavors to demonstrate improvement that can be proven numerically.
Natural Green Marketer. Organizations in this category are operating in the natural and organic products industry and are committed to making their products as green as possible; however these philosophies and practices are not always applied to the entire organization. Words such as natural, organic and fair trade are commonly used in marketing communications.
These companies are willing to sacrifice some short-term profitability for long-term reputation and sustainability of the resources needed to operate. Motivations for the natural green strategy begin to turn more toward inherent social responsibility values rather than responding to market forces. Such an organization might make 100% natural products, but has not necessarily addressed the bigger picture such as what their suppliers are doing.
Deep Green Marketer. These organizations are blazing new paths beyond a new frontier. Their strategies afford the most opportunity for organizations to completely embrace The Green Imperative and infuse sustainability and social responsibility into all of their processes, products and policies. These organizations will be the ones that reap the long-term benefits of sustainability, reducing costs and expanding the market for their goods and services. Absolute transparency and an unwavering commitment to people and the environment are musts. No process or product or partner can be immune from these companies’ efforts to maximize efficiency and appeal to the global shift toward environmental and social responsibility. The primary motivation for such a strategy is ethical and social responsibility. Doing well by doing good will ensure that an organization reaches its ROI objectives while maintaining an image laden with integrity.
Summary
Hopefully this analysis has cleared a bit of the confusion for decision makers. Obviously, the goal should be to get as close to Deep Green as possible within the framework of shareholders’ and stakeholders’ desires. Ignore the long-term trend of sustainability and corporate social responsibility at your peril. Attempt to fool the marketplace and you may realize short-term goals, but you will likely pay a price in the future.
About the authors:
Darrin Duber-Smith, MS, MBA, is president of Green Marketing, Inc., He has more than 25 years of specialized expertise in the marketing and management profession, including extensive experience in working with natural, organic and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2005). He has published more than 60 articles in trade publications and has presented at scores of executive-level events during the past 15 years. Mr. Duber-Smith is visiting professor of marketing at the Metropolitan State College School of Business in Denver, CO, and affiliate marketing professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal’s In-Education Distinguished Professor Award for 2009, and is author of Cengage Learning’s Know Now Marketing blog at http://community.cengage.com/GECResource/blogs/marketing. He can be reached at dubersmith@greenmarketing.net.
Gregory Black, PhD, is an assistant professor of marketing and chair of the Department of Marketing at Metropolitan State College of Denver. He received his PhD in Marketing from Washington State University and his bachelors and masters degrees from Brigham Young University. He has published and/or presented more than 80 articles in various publications and conferences around the world. His research interests include green and sustainable marketing, consumer behavior, student performance and behavior in the classroom, business-to-business relationships, international marketing and promotional strategy. He can be reached at gblack4@mscd.edu.
Several astute suppliers listened to market experts and recognized this paradigm shift early, earning first-mover advantages as somewhat “exclusive” providers of these ingredients. Today most suppliers have realized that high growth rates at the retail level often mean the same thing upstream in the supply chain and so offer natural and certified organic ingredients to their finished goods customers.
But wait! Demand for products that are perceived to be better for consumers and for the environment does not stop at the ingredients themselves. Sustainability and Corporate Social Responsibility (CSR) are the new order of the day, as all members of supply chains across multiple industries are under increasing pressure to comprehensively “green” their business practices. And, there are many factors aside from consumer preferences driving this trend. Lowered costs, competitive pressures, increased government regulation, global pressures, supply chain demands, and enhancing brand image are just a few of these (sometimes known as the “Green Imperative”).
So where does a company begin? How can it ensure and communicate authenticity with regard to these important initiatives? These questions can vex even the savviest of decision makers. Is it easy being green? Is it not so easy to be green? With all due respect to Kermit the Frog, sustainability initiatives are actually fairly easy to plan and implement.
The GRI and ISO-14000
These days there are numerous models you can follow as well as a variety of experts you can employ to ensure objectivity, thoroughness and an adequate level of expertise. Organizations that fail to do this have been met with mixed results. The basic idea, however, is to conduct a sustainability/social responsibility audit across a broad spectrum of organizational factors. Examples include energy waste, emissions, water, land and biodiversity, supply chain policies, HR policies, cause related initiatives and more.
After the situation has been thoroughly analyzed, measureable objectives for continuous environmental and social improvement must be set to address the areas mentioned above. This is the “plan” portion. During implementation of the plan—usually a year-long timeframe—programs are monitored and evaluation is conducted for stakeholder reporting. This is the “marketing” part. Rinse and repeat. Remember that sustainability is a business model first and a marketing strategy second.
The most influential global model for sustainability planning is probably the Global Reporting Initiative, or GRI. In 1997, GRI was launched by Boston-based CERES, an international network of investors, environmental groups and other public interest organizations to address sustainability challenges. The program produces the world’s most widely used reporting framework to maximize comprehensiveness and transparency. As such, GRI has become the de-facto international standard used by well over 1000 companies for corporate reporting on environmental, social and economic performance.
For the “über” green crowd (and especially if you have aspirations to be a global brand), it is important to obtain global certification. Those familiar with the ISO (International Standards Organization) 9000 series of global certifications for quality management may also recognize ISO-14000. This exists to help organizations minimize how their operations negatively affect the environment—i.e., comply with applicable laws, regulations and other environmentally-oriented requirements, and continually improve in these areas. Handy, eh? ISO 14000 is similar to ISO 9000 quality management in that both pertain to the process of how a product is produced. Both certifications, as is the case with Certified Organic, are conducted by third party organizations.
Communication Vs. Reality
Now that we’ve covered how sustainability planning works, we can address the principal thesis of this article… There are many shades of green—from outright “green washing” (a largely fraudulent effort to position a brand as environmentally and socially responsible) to bona fide attempts at comprehensive reform by organizations to be as “green” as they can be.
The ethical implications of all of this should be fairly obvious to the observer, but it does not matter what your actual practices are as long as your communication is transparent and truthful. Bearing this in mind, we’ve identified six archetypes, ranging from not-so-green to pretty-darned-green, so that you may better understand how sustainability initiatives are being implemented and communicated in the marketplace.
Red Marketer. According to the color spectrum, red is green’s opposite color. Red marketers are those who absolutely ignore all the principles discussed earlier. These firms are becoming rare in the industrialized world, but unfortunately still exist in great numbers in the developing world. These folks have no sustainability plan and do not communicate sustainability efforts.
Green Panderer. A panderer can be defined as someone who serves or caters to the passions or plans of others, often to make money. Thus, organizational panderers are those who pay lip service to green marketing with very little or zero commitment of resources to actually achieve any true level of sustainability. This type of company may only talk about green issues to give the impression of its participation because of market pressure or because it sees a temporary opportunity to make money by so doing. These organizations are “green washers” only to the extent that a thin, “green sheen” can be detected. Such an organization may support a cause in some minor way that resonates with stakeholders, but that will be the extent of their commitment.
Green Buffeteer. This classification of organization refers to those who choose the easiest and most obvious greening options with no attempt at transparency or commitment to continuous improvement. This shallow effort is slightly more than that shown by the green panderers but still only penetrates skin deep into business practices, thus creating a “green skin.”
Many of the green efforts with regard to these companies are socially responsive or seen to be profitable in the short and long terms. Increasingly green-sensitive consumers will easily see past this skin into the true heart of the organization and will not be fooled for long. Recycling, conserving water and reducing energy consumption are relatively easy ways to achieve some degree of sustainability without significant commitment, and the green buffeter rarely, if ever, sets measurable objectives, which make it difficult to assess results.
Light Green Marketer. These organizations have strategies to encourage consumers to see a brand that meets or exceeds all of their expectations. These strategies will normally satisfy many consumers, even those who are moderately green sensitive. Motivations for companies to adopt light green strategies range from market pressures, desire for higher profits and a more socially responsible image. Efforts by these organizations transcend the green buffeteer’s attempts at addressing the tastiest morsels in that more areas are addressed. The organization sets measurable objectives across a few areas and endeavors to demonstrate improvement that can be proven numerically.
Natural Green Marketer. Organizations in this category are operating in the natural and organic products industry and are committed to making their products as green as possible; however these philosophies and practices are not always applied to the entire organization. Words such as natural, organic and fair trade are commonly used in marketing communications.
These companies are willing to sacrifice some short-term profitability for long-term reputation and sustainability of the resources needed to operate. Motivations for the natural green strategy begin to turn more toward inherent social responsibility values rather than responding to market forces. Such an organization might make 100% natural products, but has not necessarily addressed the bigger picture such as what their suppliers are doing.
Deep Green Marketer. These organizations are blazing new paths beyond a new frontier. Their strategies afford the most opportunity for organizations to completely embrace The Green Imperative and infuse sustainability and social responsibility into all of their processes, products and policies. These organizations will be the ones that reap the long-term benefits of sustainability, reducing costs and expanding the market for their goods and services. Absolute transparency and an unwavering commitment to people and the environment are musts. No process or product or partner can be immune from these companies’ efforts to maximize efficiency and appeal to the global shift toward environmental and social responsibility. The primary motivation for such a strategy is ethical and social responsibility. Doing well by doing good will ensure that an organization reaches its ROI objectives while maintaining an image laden with integrity.
Summary
Hopefully this analysis has cleared a bit of the confusion for decision makers. Obviously, the goal should be to get as close to Deep Green as possible within the framework of shareholders’ and stakeholders’ desires. Ignore the long-term trend of sustainability and corporate social responsibility at your peril. Attempt to fool the marketplace and you may realize short-term goals, but you will likely pay a price in the future.
About the authors:
Darrin Duber-Smith, MS, MBA, is president of Green Marketing, Inc., He has more than 25 years of specialized expertise in the marketing and management profession, including extensive experience in working with natural, organic and green/sustainable products and services. He is a co-founder of the Lifestyles of Health and Sustainability (LOHAS, c. 1999) market concept and leader of the first U.S. industry task force that helped frame an industry definition of natural (c. 2005). He has published more than 60 articles in trade publications and has presented at scores of executive-level events during the past 15 years. Mr. Duber-Smith is visiting professor of marketing at the Metropolitan State College School of Business in Denver, CO, and affiliate marketing professor at the Leeds School of Business at the University of Colorado-Boulder. Mr. Duber-Smith was the recipient of the Wall Street Journal’s In-Education Distinguished Professor Award for 2009, and is author of Cengage Learning’s Know Now Marketing blog at http://community.cengage.com/GECResource/blogs/marketing. He can be reached at dubersmith@greenmarketing.net.
Gregory Black, PhD, is an assistant professor of marketing and chair of the Department of Marketing at Metropolitan State College of Denver. He received his PhD in Marketing from Washington State University and his bachelors and masters degrees from Brigham Young University. He has published and/or presented more than 80 articles in various publications and conferences around the world. His research interests include green and sustainable marketing, consumer behavior, student performance and behavior in the classroom, business-to-business relationships, international marketing and promotional strategy. He can be reached at gblack4@mscd.edu.
