Green is Now:
More than another fashionable movement
By Paula Oliveira - Associate Director, Interbrand London
It is debatable among environmental specialists if the responsibility to act on climate change belongs to governments, general public, NGOs, or companies, but the fact is that more and more corporations have been taking responsibility into their own hands by optimizing their operations and supply chains, investing in more sustainable products and services, openly expressing their commitment and long-term targets, and smartly engaging their stakeholders in the debate.
This is very different from the green movement of the 1960s, when companies promoted their green credentials but didn’t really understand or do enough to fundamentally change their business and limit their negative influence in the environment. According to CorpWatch, a not-for-profit organization that promotes companies’ accountability and transparency in various issues, in 1969 alone, public utilities spent more than US $300 million on advertising, which was more than eight times their investment in anti-pollution research.
This first wave of “corporate green” peaked in late 1980s. At that time, people became more aware of menaces to the environment due to the increasing number of natural disasters such as floods, earthquakes, and famine. Suddenly, green products were cool; so were mitigation actions such as recycling. Companies saw the opportunity to engage with consumers and increasingly promoted their brands’ green credentials. But as John Grant states in his 2007 book, The Green Marketing Manifesto, the substance was lacking: for consumers, the movement was just a “brandwagon” they didn’t want to miss, but they were not ready to change behavior. Consumers were unsure if environmental catastrophic predictions were realistic, so their interest in the “green trend” faded quickly; as for companies, they failed to produce green products with true environmental benefits, high quality standards, and affordable prices. Examples include green cleaning products that didn’t clean, and recycled papers with poor resistance. All this made companies wary of communicating green credentials even when they were true, so they could avoid the risk of being accused of greenwashing, a popular term to nominate companies that speak loud about green credentials but don’t do enough.
But there were some good side effects of this first wave. New green charities were founded and existing ones such as Greenpeace and WWF became more renowned worldwide. Governments increased legislation regarding waste and gas emissions. Pollution was reaching unbearable levels in major cities and manufacturing businesses and car fleets were targeted as partially responsible. As a result, companies improved their operations in order to improve efficiency, generate less by-products and cleaner waste, reducing air and water pollution.
Nowadays, we don’t know if the weather is getting warmer or colder, we just know it’s changing. It is hard to know which animal species are more severely under threat – we just know many are. We don’t like to see rubbish thrown on the streets, we don’t like to see rivers or beaches dirty or polluted and we recycle our rubbish and we expect business and brands to do their part as well. This is not because legislation obliges us to follow rules, but because it is simply the right thing to do for our planet. Companies are listening and there are some notorious cases that illustrate the three ways companies are demonstrating their commitment to the environment: sustainable supply-chains, sustainable innovation, and sustainable engagement.
And this is not a wave. It is a new way of doing business that came to stay. It is about acting responsibly, not by focusing on short-term sales or other financial gains, but on the long-term sustainability of the business and of the planet.
Sustainable operations: L'Oréal
Sustainable operations include all aspects related to the manufacturing process itself, supply chain, choice of partners, transportation, and logistics.
Even though this is not known to many people outside sustainability specialists or enthusiasts, L'Oréal is a company very committed to sustainable development, including the choice of natural ingredients, long-term relationships with its suppliers, water conservation, reduction of CO2 emissions in the whole process and development of sustainable buildings among others.
According to L'Oréal website for sustainable development, more than a third of L’Oréal’s existing suppliers have worked with the brand for decades, growing together with the business. The choice of ingredients must comply with 10 criteria (see illustration), guaranteeing that the choice does not affect biodiversity and is compliant with all international, regional, and local regulations. L'Oréal also has an annual Environment, Health and Safety award (EHS), encouraging teams and employees around the world to improve performance towards corporate environmental goals. These and other initiatives make L'Oréal one of the top performing companies in terms of sustainable development.
Sustainable innovation: Toyota
Sustainable innovation is where companies’ initiatives directly touch customers and consumers lives. Through innovative products and services, companies not only reduce their own carbon footprint, but also help their customers and consumers to improve theirs.
The Responsible Business, a 2011 book by Carol Sanford, that discusses a new paradigm shift in corporate responsibility, emphasizes the use of science and technology to solve issues around environment and other problems impacting humanity. Of course environmental issues should be balanced with primary customer needs, but in some cases customers do not know what they need or what is possible, hence the role of corporations to offer products and services that are relevant, differentiated, green, and ethical.
Examples abound in different industries, with Toyota Prius being one of the most recognizable symbols of a product that addresses those criteria. First launched in Japan in 1997, its hybrid technology not only protects the environment, but also helps consumers to save costs by using a well-designed and stylish car.
Sustainable engagement: Johnson & Johnson
As important as having a true commitment to the environment and acting responsibly is communicating environmental efforts with transparency and clarity. This is not only because of governance, but also to set an example and engage a wider community of business, employees, partners, consumers, and the wider community around changing the world.
Johnson & Johnson is a good case. Since 1987 the company has implemented environmental goals aimed at reducing emissions and their impact on the environment, including carbon reduction, water use, paper and packaging, waste reduction, compliance, and external manufacturing, among others.
Johnson & Johnson recently launched a website called “Johnson and Johnson Responsibility” helping the company to demonstrate its commitment and transparency towards its “Healthy Future 2015 Goals” and to illustrate Johnson & Johnson’s commitment to the environment through real cases, such as BAND-AID’s. 90 percent of world’s BAND-AID brand adhesive bandage boxes are produced in Brazil, where in 2006 over 2/3 of paper-based packaging were made of recycled paper or fiber from certified forests and numbers have been improving over the years. But the company is also transparent in recognizing there is a way to go, clearly stating its ambitious goals and fostering the power of external collaboration in a sustainable way.