Wsj Eco Conference

Mutual Social Responsibility – Where is green going?

An evolving social business landscape

• Consumers move from viewers to collaborators

• Consumer citizens & citizen brands emerge – only some will survive the downturn

• Interest in social purpose works across all demographics, women especially

• Social purpose is a new “benefit” to build employee engagement and loyalty

We see consumers [willing to pay] up to a 10% premium for ethical brands. The issue is that organic, fair trade, etc. were charging an average of 45% or more... we still see growth.

The evolution of green

DEFENSE & RESPONSE1992 - 2000

BUSINESS STRATEGY2006 - Today

TACTICAL OFFENSE2001 - 2005

From bi-lateral partnerships with business and NGOs…

TECHNICAL MARKETINGSOURCING

ConsumerEmpowerment

Brand Personalization

Company’s New Social Role

…to consumers now in the game

Civil Society

Company

Consumer

Key questions

Q: Is green a new minimum standard or a premium offer?

Q: What is the role of NGO partnerships, today?

Q: How best to market?

Consumer behavior: Aspiration vs. Reality

ASPIRATION

• 58% of Americans intent to purchase is positively impacted by information about a brand’s support of social causes, versus 47% by information regarding new product features

• Nearly seven in 10 globally (69%) say they would be prepared to pay more for eco-friendly products

2nd Annual goodpurpose Global Consumer Study, 2009

REALITY

• When times are good, people are eco-conscience. When times are difficult, final decisions are made on bottom-line cost.

- Professor John Gourville, Harvard Business School

• We do not think [environmental sustainability] is optional… we’re not sure how much of a premium consumers will pay for it, but consumers will punish ‘bad actors’.

- Mike White, PepsiCo

Light Green vs. Dark Green: The right mix for the right constituency

OPERATIONAL REALITY

CON

SUM

ER P

ERCE

PTIO

N

Credible - not easy - engagement about your brand

Mirror, mirror: Am I sustainable?

Green product + green brand halo =Ever-higher expectations

Can technical excellence translate to consumer consideration?

A: It depends.• Bright green brands can capture premium, but must work

harder to maintain trust• Light green brands must operate responsibly, but benefits

will largely be operational

OPERATIONAL EXCELLENCE & TECHNICAL INNOVATION

CONSUMER-FACING & PRODUCT CHARACTERISTICS

Q: Is green a new minimum standard or a premium offer?

COMBINATION

A: Partnerships still provide technical expertise and social license fixes for business. Now the expectation is for business to fix society’s problem.

Q: What is the role of NGO partnerships, today?

“ …Come together—government, NGOs and business—in new approach to solving big problems facing our country. … This can work.”

-Lee Scott, Wal-mart

Lipton Tea consumers perceive ethical sourcing [Rainforest Alliance certification] to positively impact the quality of the tea, therefore they are willing to pay more.

- Unilever

TRADITIONAL PARTNERSHIPS WHAT’S NEXT?

A: • Ask permission, to empower and engage your consumers • No greenwashing• One global voice does not fit all

Q: How best to market?

COLLECTIVE POWER OF INDIVIDUAL ACTIONS

CREATE A MOVEMENT TO MOVE PRODUCT

CSR claims when couched in local context have the greatest impact. There is little value to “global” claims or calls-to-action.

- John Quelch, Harvard Business School

Energy Efficiency for Ireland

Brands must:•Provide more technical depth and issue content + brand essence•Use the media to communicate about their consumers, not just to them•Become a smaller part of larger stories about society’s important and vexing

issues

And the media…A general trend from “stenographers” to “participants” in the debate

• Word-for-word, MSM reporters generating as much on-line content as print• Investigative staff & budgets cut

Climate change story was a watershed for media• MSM covered “both sides” of the debate, far after there was clearly one side

Reporters have permission to serve as referee • Mainstream media (68.1%) is a more trusted source of a company’s sustainability

activities followed by corporate websites (57.3%) and NGOs (54.6%)*

• A need to keep score, throw flags when a team plays fast and loose with facts (Shorenstein Center)

*Corporate Responsibility & Sustainability Communications: Who’s Listening? Who’s Leading? What Matters Most, 2007

The era of Mutual Social ResponsibilityCombine corporate reputation & brand marketing

Operate Differently• Continual improvement;

like quality• Today’s bright green is

tomorrow’s light green

Partner Differently• Go beyond the technical• Share consumer relationships

and trust

Market Differently• Give up control• Co-create brands; share values