by Ruchika Joshi
Sustainability means many things to many people. Environmental sustainability, in particular, has definitions that vary across industries, companies, and business segments.
There are, however, a few basic truths that drive all organizations to adopt sustainable practices:
· Driving demand generation through product/service innovation
· Increasing brand equity internally and externally
· Managing cost efficiencies
· Becoming the moral compass for all stakeholders
· Managing risk as it relates to regulation
While one or all of these motivations are common across all organizations, not everyone necessarily knows how to effectively develop, manage, and implement a sustainability strategy that leaves a lasting impact on key stakeholders. B2B organizations, in particular, are at fault.
In the case of B2B, sustainability has been intrinsic to operations where applicable, including in raw materials, packaging, engineering, production, and distribution. As a result, the approach to sustainability has largely been around risk mitigation and cost efficiencies, and the focus has been internal with limited external communication.
While this would have been a perfectly legitimate approach 15 years ago, today there is greater awareness about environmental sustainability, and the general public has an expectation that no matter what kind of business you have, you are responsible for the environmental footprint you leave behind. Sustainability is, in fact, inextricably linked to the brand.
B2B and brand: Brand does matter
In a 2008 survey in BtoB magazine, 62 percent of B2B marketers said that their primary goal in 2008 would be customer acquisition. Only 19 percent cited brand awareness.
B2B CEOs often consider the brand to be a frivolity: “Our audiences are so different from B2C—do we really need to make the investment in our brand?” What they don’t realize is that the brand is more than a communication framework; it is a business decision-making tool, an organizational behavior lever, and a beacon for employee engagement, all rolled into one.
Additionally, the argument that B2B and B2C brands are “so different” no longer holds true, as the boundaries between B2B and B2C are less clear than they were 10 years ago. More and more companies, like Intel and IBM (in its avatar as a management/supply chain consultancy), are reaping the benefits of investing in their brands and becoming part of the mainstream consciousness. The best brands—brands like IBM, Microsoft, GE, Intel, Dell, Motorola, Philips, HP, and UPS—are industry agnostic, and their approach to brand strategy would hold good whether they were purely B2B or purely B2C.
The significant shift from traditional product-oriented mindsets to offering broad-based solutions in B2B has also led to a greater need for understanding and delivering a superior customer experience. This has reinforced the need for brand as an important filter for B2B. This relationship to brand is another reason why many B2B organizations are getting left behind when it comes to sustainability.
B2B and sustainability: What's the problem?
Essentially, the crescendo of environmental sustainability has created an even playing field for B2B and B2C. (It is safe to say that sustainability is industry agnostic—just like branding!) However, most B2B organizations are not doing an effective job with galvanizing their employees and other key stakeholders around these practices. Nor are they measuring and communicating the impact of these practices.
When you really think about it, what is flawed about the current B2B approach isn’t that the sustainability practices don’t exist, it is that they appear very self-serving. As a result, critics have labeled this approach a form of greenwashing. (Greenwashing is also attributed to those companies that say they have sustainable practices, although in reality, if you dig deeper, the practices don’t really exist.)
Increased environmental awareness, in addition to the greater degree of transparency afforded by social media, has added fuel to expectations from B2B organizations. As an unfortunate byproduct of this expectation, B2B organizations are retreating from the spotlight rather than publicizing their sustainability practices—a “damned if you do and damned if you don’t” response.
Brands and sustainability: How do they work together?
Some brands, like GE, have broken the proverbial B2B mold and developed a sustainability strategy that is strengthened by its link to business strategy. GE’s well-defined and well-managed brand allows the organization to leverage it for sustainability.
GE has effectively linked sustainability with brand by:
1. Using the brand as a business decision-making tool
Linking ecomagination with GE was a strategic decision. There are real products related to ecomagination, so the GE commitment to environmental sustainability is credible. B2B organizations often react to sustainability by creating eco-labels across existing products without giving the eco-label a raison d’être.
2. Making it a lever of organizational behavior
“Imagination at work” is a behavior that is evidenced in every department—be it green product development or HR practices around sustainability. It is imbued in the very name “ecomagination.” The GE ecomagination project in Masdar City in Abu Dhabi to build the world’s first zero-carbon city is living proof of “imagination at work.”
3. Leveraging the GE brand as a beacon for employee engagement
GE’s well-documented treasure hunts in manufacturing plants to make them more energy efficient are legendary.
4. Investing in marketing and communication
GE has invested over US$ 90 million in PR and marketing for ecomagination.
Good intentions can have good outcomes
It’s no mystery that GE has seen a significant increase in brand value (over US$ 6 billion since 2005), while also seeing a commendable increase in ecomagination revenues (2008 revenues reached US$ 17 billion, an increase of 21 percent over the prior year). This is in large part due to a strategy that is focused on new green products.
Brands like Intel and Dell—both with a strong B2B component to them—are leveraging innovation and the power of their network of partners to lead the sustainability charge in the technology sector. Intel, by virtue of pioneering and setting industry standards, is a tour de force in the world of semiconductors. GreenBiz.com recently reported that Intel ranks number one on the EPA’s list of top green power purchasers among the Fortune 500. Intel also recently teamed up with Facebook to create the first application that redirects idle PC processing power to research programs aimed at fighting climate change.
Dell gets 100 percent of all the power it uses from renewable resources. Over 20 of its commercial client computers are ENERGY STAR 5.0 compliant, and Dell allows customers to tweak the components in their build-to-order systems for maximum energy savings.
The key is finding what’s right for your brand. At the end of the day, brands are measured against everything they do and say. A robust sustainability strategy that is well implemented and communicated (through brand as the filter) impacts brand value positively for B2B organizations.
Sustainability adds value to your B2B brand
When B2B organizations develop and execute sustainability strategies effectively, they add tremendous value to their brand. In survey after survey, companies like GE, BP, and Wal-Mart come up as being top of mind in sustainability, and not only because they have a B2C component to them. Forbes just recently bestowed Exxon with the honor of being the “green company of the year.” More and more B2B organizations are recognizing the value of bringing brand and sustainability together because they are beginning to see that good intentions really can have good outcomes.
Ruchika Joshi is a Senior Consultant at Interbrand. She plays a critical role in the strategic development of the brand value proposition and messaging for clients. Ruchika has extensive experience in strategic branding with global and local brands across five continents. With over eight years of brand strategy and marketing experience, Ruchika believes in a creative approach to problem-solving, grounded in a strong strategic foundation.