THE SIGMA GUIDELINES- TOOLKIT
SIGMA Sustainability Marketing Guide
SIGMA Sustainability Marketing Guide
Getting started
Flow chart
Help files
4 Steps
Introduction to
Marketing p8
1. Getting Started:
•
Sustainability
Practitioners
•
Marketeers
Sustainable
Marketing: Why
it matters p12
2. Understand the
market
Who are the
sustainable
consumers? p17
3. Audit your current
products and services
Product/Service
Sustainability
Checklist p20
4 . Develop strategic
options
Assessing your
key
sustainability
Issues p28
Sustainable
Marketing:
Some practical
lessons p14
Mapping the
options
p29
Mapping
trustworthiness
p30
2
Contents
Flow chart ........................................................................................................... 2
Contents ............................................................................................................. 3
Acknowledgments............................................................................................... 4
Introduction ......................................................................................................... 5
Four Essential Steps towards sustainability marketing ....................................... 5
1.
Getting started........................................................................................... 5
2.
Understand the market.............................................................................. 6
3.
Audit your current products and services .................................................. 6
4.
Develop strategic options.......................................................................... 6
A) Introduction to Marketing ................................................................................ 8
B) Sustainable Marketing: Why it matters ......................................................... 11
C) Sustainable Marketing: Some practical lessons ........................................... 14
D) Who are the sustainable consumers? .......................................................... 17
E) Product and Service Sustainability Checklist................................................ 20
F) Assessing your Key Sustainability Issues..................................................... 28
G) Mapping the options..................................................................................... 29
H) Mapping trustworthiness .............................................................................. 30
3
Acknowledgments
We would like to thank the following for their expertise, enthusiasm and input to
this guide:
Martin Charter
The Centre for Sustainable Design
Debra Massey
Chartered Institute of Marketing
Lia Abady
Stephanie Draper
Forum for the Future
Mike Barry
Marks and Spencer
Tom Dalziel
Powergen
Bob Allen-Turl
David Hare
TNT
Jason Perks
Sd3
We are also indebted to Jacqueline Ottman and Ken Peattie who are undertaking
leading edge work in this area. Prepared by Rosalind Oakley and Jason Perks.
4
Introduction
The SIGMA sustainability marketing guide has been developed in conjunction with
The Chartered Institute of Marketing, Forum for the Future, Centre for Sustainable
Design and organisational partner companies in the SIGMA project. It is intended
to help an organisation develop strategies to market the benefits of its approach to
sustainability to its customers - taking advantage of opportunities and minimising
risks.
The guide is designed to help both sustainability practitioners and marketeers gain
an understanding of each others respective fields and to use their expertise to
collaboratively develop successful sustainability marketing strategies.
The document is split into 2 parts:
Four Essential Steps – suggested steps towards a marketing plan, utilising the
tools briefly outlined below
Sustainability help files – practical tools and briefings to help complete the steps
suggested above.
The guide is intended to provide some initial guidance for sustainability
professionals and for marketeers in getting started. It provides some suggestions
of initial tasks and analyses. Users should use their own judgement in deciding
which areas to focus on and to make use of other resources available.
Four Essential Steps towards sustainability marketing
As a part of the SIGMA guidelines, the 4 key steps assume that the organisation
has already made a commitment to sustainability and that the organisation’s
sustainability practitioners are seeking to get marketing colleagues involved.
However, the guidance can just as easily be used by others.
1.
Getting started
Marketing and sustainability management are two very different specialist fields
with their own jargon and approaches.
For the Sustainability Practitioner:
You may feel that you aren’t familiar enough with marketing concepts and how
sustainability links to these to effectively engage with your marketing department.
To help get you started, Introduction to marketing (1) provides a brief overview of
the elements of marketing. Sustainable marketing: some practical lessons (2)
further develops the nature of marketing, the approaches used and their linkage
with sustainability providing a number of links to further information and guidance.
For the Marketeer
You may feel that you aren’t familiar enough with sustainability concepts and how
marketing links to these to effectively work towards a marketing strategy that takes
full advantage of your company’s approach to sustainability. Sustainability
marketing: why it matters (3) provides a succinct evidence-based case for
incorporating sustainability into strategic marketing thinking.
5
2. Understand the market
It is important to understand the potential appetite of your customers for
sustainability-oriented products and services. This may well involve some tailored
market-research, or you may be able to get some initial insights from existing
research within your organisation or from surveys by other organisations. Who are
the sustainable consumers? (4) provides some generic evidence for consumerbased opportunities.
3. Audit your current products and services
A first step in devising a strategy should be to audit your current and planned
products and/or services (offerings) to understand how well they support
sustainability. This will help in identifying your current strengths and weaknesses,
opportunities and threats(SWOT). The product/service sustainability checklist (5)
provides a simple template for assessing your current offerings from a
sustainability perspective. You should consider what need you are actually
meeting. Could it be met by providing a service rather than a product?
For advice from the Chartered Institute of Marketing on conducting a SWOT see:
http://www.cim.co.uk/mdoc/sect4/mclass2.htm
4. Develop strategic options
Having identified the potential appetite of your current and potential customers for
more sustainable products/services, and having assessed your current
products/services, you should now be in a good position to identify some strategic
options and assess their potential.
There are many ways that you can approach this, and it will depend on your
individual organisation. Although you may find you have an ideal candidate for
marketing in your current products and services, the chances are that there will be
some changes to make before you have an offering that meets all the criteria set
out – and some changes may be quite fundamental, such as changing a
production process, creating an entirely new product/service, or providing a
completely different solution to the need that your previous product/service was
meeting. In addition to considering specific products and services you also need to
consider the overall positioning of the organisation.
A first step might be to consider the options in terms of your key sustainability
issues. Identifying whether each has any communication potential, whether it
poses any risks, whether the credibility of your performance can be established,
and whether it will enable differentiation against your competitors – and how easy
will it be for them to follow you. Assessing your Key Sustainability Issues (6)
provides a matrix for considering these factors for each of your key issues. Link to
additional SIGMA tools
Having made an assessment, a useful way of determining the best options is to
map them in terms of their ease of communication and level of differentiation.
Mapping the options (7) provides a simple method for doing this.
6
A key element of a sustainability marketing strategy is to understand the
trustworthiness of your offering. From a consumers perspective there are three
elements of trust. Mapping trustworthiness (8) provides a model for determining
how strong your offering is in terms of these three elements
If you haven’t considered the best way of communicating the message to
customers and those who influence them earlier, you will certainly need to now.
See CIM 10 minute guide to the promotional mix
You are probably now ready to progress with your most promising options. Before
you get too committed it’s worth checking that you aren’t about to make the same
mistakes as others. Revisit sustainability marketing lessons for a quick reminder of
some basic dos and don’ts.
The next step is the development of a full marketing plan1.
1
CIM, Forum for the Future and the Centre for Sustainable Development are exploring future
collaboration to build on this initial guide and provide further practical guidance.
7
A) Introduction to Marketing
1. What is Marketing?
'Marketing is the management process responsible for identifying, anticipating and
satisfying customer requirements profitably'
Definition from The Chartered Institute of Marketing
The products we buy, the stores we visit, the media messages we receive, the
choices we make in our consumer society have been shaped by the forces of
marketing. The marketing process is central to the business performance of
companies large and small because it addresses the most important aspect of the
competitive marketplace - identifying, anticipating and satisfying customer needs
profitably.
Marketing is sometimes wrongly defined within the narrow context of advertising or
selling, but that is not the whole story. Marketing is a key management discipline
that enables the producers of goods and services to interpret customer wants,
needs and desires - and match or exceed them in delivery to their target
consumers.
It is all about getting the right product or service to the customer at the right price,
in the right place, at the right time, in the right way.
2. What is Involved?
Marketing is both a concept dedicated to meeting customer requirements and a
range of techniques which enables the company to determine those requirements
and ensure they are met. One way to understand the broad scope of marketing is
to refer to the four (or seven) 'P's, also known as the marketing mix. These are
described below together with some sustainability considerations:
2.1 Product
Marketing is fundamental to product development and product management. There
is little point in developing a product nobody wants to buy. Marketing therefore
involves design, concept testing and product launch.
Sustainability considerations:
How sustainable is the product or service? What are the social and environmental
impacts of making, using and disposing of the product?
2.2 Price
What people really feel about a product or service is reflected in what they are
prepared to pay for it. Pricing plays a key role in what is known as the 'marketing
mix'. It is the only element that generates revenue - all the other elements
represent cost.
8
Sustainability considerations:
What is the true cost of the product – does it create social and environmental
impacts which create costs that others have to bear? These costs might arise
during the creation or use of the product or at the end of its useful life when it is
disposed of.
2.3 Place
The movement of goods from point of productions to point of consumption or use is
another key aspect of marketing. Effective distribution means getting your product
into the right places - an essential consideration given the constant changes in
retailing and international trade.
Sustainability considerations:
Can the physical distribution be greened and made socially responsible? Are their
significant transport costs involved?
2.4 Promotion
This 'P' is perhaps the best understood, most broadly based and most visible
aspect of marketing. Promotion means communication with customers. Promotion
is persuasion. Its disciplines include corporate identity, branding, advertising, public
relations, direct marketing, sales promotion/merchandising, sales/sales
management, and exhibitions. The way in which all these elements are coordinated is crucial to the success of the overall marketing strategy.
Sustainability considerations:
Are claims accurate and truthful? Are we encouraging excessive consumption? Are
we encouraging sustainable behaviour?
2.5 From 4Ps to 7Ps
This definition of the marketing mix has now been expanded to include three more
factors – people, processes and physical evidence. Marketers of services are
effectively dealing with intangible products and need additional tools to help them
communicate their offering to the customer:
People – in a service industry the people who sell the service and deliver the
service are a key component of that service. Courteous and efficient staff make an
impression on the customer over and above the actual level of service they deliver.
Sustainability considerations:
Are we treating our people fairly? Do we practice discrimination, are staff paid a
living wage?
Processes - one of the difficulties when marketing services is to ensure
consistency across all points of customer contact. Strict procedures mean that the
customer receives a consistent level of service, and a recognisable service
experience wherever they shop.
9
Sustainability considerations:
Are our processes designed to respect and enhance natural and human
resources?
Physical evidence – if the product is intangible then the points of customer
contact need not be. Corporate identity in the form of uniforms, store layouts and
communications pieces all create a tangible image in the mind of the customer.
Sustainability considerations:
How do avoid creating unnecessary and wasteful physical evidence?
Each of the above factors contributes to an over-arching view of marketing as a
total system of interacting business activities designed to plan, price, promote and
distribute goods and services to meet the needs of current and potential
customers.
3. Planning a Marketing Strategy
The different elements that go into the 'marketing mix' cannot be planned in
isolation. Marketing focuses on the customer, researching their needs and
preferences, analysing their attitudes to promotion, and other factors that influence
their purchasing decisions and persuade them to buy products and services from
you rather than a wide range of competitors.
All of that requires a marketing strategy that is co-ordinated and considered - not a
piecemeal approach to each part of the task - and realistic in terms of making the
most effective use of the resources and budgets available.
Planning a marketing strategy starts with a detailed and ongoing investigation of
the market and its sub-markets or segments. Companies look at the social,
political, economic, cultural and technological trends which are shaping the market,
at their own position within it, and at the resources they can marshal to change or
influence it. This is sometimes known as the marketing audit.
A marketing plan defining objectives, targets and performance measures is then
developed with a financial budget. And when specific goals have been defined,
then strategic alternatives to the current position can be discussed, and ways to
achieve those alternatives can be chosen. The marketing strategy is then
formalised within a specific plan of action, which is constantly revised and updated
and the marketing campaign progresses.
Planning an effective marketing strategy within the organisation is intimately bound
up with the total business planning process because it is linked to overall corporate
strategy and requires endorsement from the top. It also needs to be continually
reviewed. Therefore collaboration between marketing and other corporate activities
such as finance, research, development and production is important to ensure that
the marketing strategy is implemented effectively.
Marketing is a team effort requiring the orchestration of a range of different skills,
outlooks and personalities. Some aspects of marketing deal solely in facts and
finance; others explore the ambiguities and uncertainties of changing consumer
styles.
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B) Sustainable Marketing: Why it matters
1. What is sustainable marketing?
Sustainable marketing is both a challenge and an opportunity. Customers and
society want more than just product and service performance, they want it with a
conscience. Increasingly they want to know what all the impacts of your product
and services are- what is the impact of making and using them, on health, people,
environment? And what happens when a product’s useful life is over, can it be
recycled, reused, will it pollute? This includes consumables you use to provide your
service.
2. Is it new?
Yes and no. Many companies are already taking some useful steps e.g. good
employment practices, supporting the local community, reducing environmental
impact. But doing a bit is not enough. A few trees planted or a few thousand to
charity is just lip service if your products, services and business operations are part
of the problem in the first place. In most cases that means some fundamental
rethinking about how you operate.
3. Why should I care?
Society, consumers and legislators are all taking more interest and action in this
area, so there are both market opportunities and risks. Increasingly, a company’s
footprint on society is bound up with its licence to operate. Government measures
are changing market behaviour, taxing company cars which emit more carbon
dioxide for example has transformed the buying behaviour of car fleet managers,
while the introduction of landfill tax is changing attitudes to waste. Another trend is
to place responsibility on producers to take back their products. Consumers are
more willing to discriminate in their purchases. At the very least you need to
manage the risks. Better still focus on the opportunities.
4. Opportunities
Brand value and reputation
A responsible approach to business can enhance brand value. The average
reputation score for those companies with an expressed commitment to business
ethics was between 4.7 and 6.7% higher than the score for the group without such
a commitment.2
2
Verschoor, C.: A Study of the Link Between a Corporation’s Financial Performance and its Ethics, Business
and Society, (1998), based on Fortune’s 100 Most Admired Companies” list
11
Increased profitability and loyalty
Leadership in this area can create powerful brand differentiation and loyalty leading
to increased profits. The Cooperative Bank for example has calculated that c. 20%
of its profits come from its ethical and ecological positioning3.
But it’s not just the leaders who are seeing benefits. 30%of people bought a
product because of a link to a charitable product while 28% had boycotted a
company’s product on ethical grounds.4 Electrolux’s Green Range of white goods
that have a lower environmental impact achieved a 3.5% higher gross margin than
the company’s standard range.5
A growing market – not yet being effectively reached.
Conservative estimates suggest overtly ethical products in 1999-2000 were worth
well over £1.3 billion. Although market share is still small many of these are
growing fast. The UK organic market has increased rapidly over recent years with
growth rates of 30 to 50% per annum.6 Yeo Valley organic foods for example was
the fourth fastest growing brand in the UK with sales of £25 million (A.C. Neilsen
The Biggest Brands Report’). Sales of fairly traded coffee have been growing at
about 9% a year in a fairly static market. 7 The global market for wind power has
been growing at over 40% year on year for the past 10 years from around 300MW
of installed capacity in the early 1990s, to around 4.5 gigawatts by last year.8
The 30:3 syndrome: 30 % of consumers regularly claim to be concerned about
companies’ social and environmental records, but currently ‘ethical ‘ products
typically attract 3% market share. The gap presents a real opportunity for
innovative and effective marketing.
What do the customers think?
42% of people think companies should be wholly or partially responsible for solving
social problems9
49% of consumers take some note of green aspects when buying10
3
Our impact, Partnership Report 2001 The Cooperative Bank
MORI survey quoted by Sue Adkins in Cause Related Marketing- who cares wins (1999) Butterworth Oxford
UK
5
Hedstrom,G, Shopley J and LeDuc C Realising the Sustainable Development Premium (2000) Arthur D Little
6
Sales in 2000-2001 amounted to £802 million, up by 33% on the previous year. 2001-2002 sales are
predicted to be up a further 20% to over £950 million Source:
http://www.defra.gov.uk/farm/organic/actionplan/prospects.htm
7
Who are the Ethical Consumers? Roger Cowe and Simon Williams (2000) Published by the Cooperative
Bank
8
In the first six months of 2001 Vestas, the Danish Wind Turbine company and its associates delivered
995MW - 75% more than it did in the same period of 2000. source: HSToday: COMPANY FOCUS
9
Simon Zadek, Doing Good and Doing Well: Making the Business Case for Corporate Citizenship, (November
2000) Conference Board
10
Quoted in in Marketing and sustainability p7 by Martin Charter, Ken Peattie, Jacqueline Ottman and Michael
J. Polonsky. (April 2002). Published by Centre for Business Relationships, Accountability, Sustainability and
4
12
2/3 of ‘alpha class’ (high education/income) customers have considered switching
brands because of corporate social responsibility issues.
Some of the most concerned consumers are also affluent. See D) Who are the
sustainable consumers? for more information on consumer attitudes.
5. Time for action
Talk to your colleagues managing environment and sustainability. Undertake an
audit. What are the main social and environmental impacts of your products and
services? How do they matter to your customers? Which ones would interest your
customers? How easily can you communicate them?
Society (BRASS), in association with The Centre for Sustainable Design. Or see:http://www.cfsd.org.uk/smartknow-net/smart-know-net.pdf
13
C) Sustainable Marketing: Some practical lessons
1. Introduction
At first glance some might argue that sustainability and marketing are incompatible.
Some associate marketing with ever growing consumption, with creating desire for
unnecessary things, and cynics might say with built in obsolescence, limited
durability and endless product and service extensions that keep people coming
back for more. Sustainability on the other hand is about consuming less, about
making more with less, better and for longer. It is also about the ‘world behind the
product’.
First impressions are not always accurate. Sustainability and marketing have
much to offer each other. Marketing has the ability to understand customer
expectations, behaviours and patterns and to influence them by persuasive
communication and to influence product sourcing, design and packaging.
Marketing deals not just with individuals but with businesses, government and
distributors. Sustainability offers marketeers new opportunities: the potential to
build reputation and brand value; outstanding loyalty; meaningful differentiation and
an impetus for radical innovation.
Sustainable marketing is still a new area; there are still relatively few experiences
and extensive case studies to draw on. Nor is it an area without risk. Companies
claiming sustainable credentials may find themselves under even more exacting
scrutiny and vulnerable to charges of greenwash or hypocrisy if found wanting.
Nor is a sustainable marketing strategy a magic bullet. It is still necessary to do
the usual marketing homework of understanding the customer. Feel good claims
will not overcome ineffective or overpriced products.
This short briefing pulls out some key points from a brief survey of articles and
case studies and seeks to identify key learning points for sustainable marketing.
See Resources section at end for further information
2.
Key sustainability marketing lessons
Understand the full impact your product or service is having throughout its
lifecycle, socially, economically and environmentally.
What is the impact of sourcing the raw material and making the product? What is
the impact on communities within the company’s supply chain? How is the product
used, what energy is used, does it have social consequences. How is it disposed
of – can it be reused, does it pollute? Focus on the areas of greatest impact.
Integration and coherence is crucial.
Customers will look not only at individual products and services but also at the
performance of the organisation as a whole. Brand values and broader
organisational behaviour act as shorthand to support buying decisions
14
Performance, quality, price and convenience still matter.
Sustainability criteria differentiate.
Stress the benefits for customers and make things easy for them
remembering that these customers like any others will fall into different segments
motivated by different attributes, lifestyle choices and cultural/ethical make-up.
Ensure your marketing effort is credible.
Make meaningful claims, don’t overplay insignificant features or assume tweaking
one or two aspects make a product or service sustainable. See for example the
National Customer Council green claims code of conduct
http://www.ncc.org.uk/pubs/green.html.
Engage stakeholders.
They can bring important perspectives on your performance. Credible third party
endorsement is more powerful than claims you make yourself.
Be proactive, demonstrate leadership.
Identify problems and deal with them, don’t wait for others to prompt you. This
builds credibility. You may need to help educate the customer.
Think differently.
To rise to the sustainability challenge you need to rethink how stakeholder needs
are met. Rethink the value your product or service provides. What is the
underlying need and how can it be met more sustainably, with less impact. Is a
product needed? Think of your product or service as part of a system - what part
does it play? How can you move from making a negative impact to making a
positive one? Key characteristics: durable, non toxic, non exploitative, minimally
packaged, reusable. Key trends ‘dematerialising’, from products to services; from
creating social and environmental damage to enhancing value
3. Avoiding pitfalls
Jacqui Ottman provides the following advice on avoiding a backlash:
• Ensure you position individual initiatives as part of a corporate programme
• Promote responsible consumption
• Consider the environmental impact of your marketing methods
• Use meaningful claims
• Be specific and prominent
• Provide complete information
• Do not overstate
• Enlist the support of third parties
• Consider eco labels –but be aware of risks here too
4. Case studies
Not surprisingly given the emphasis on not just talking sustainability but being
sustainable, the case studies that most exemplify these points tend to be of
15
companies whose approach to sustainability is a core part of their positioning and
strategy. See for example:
BP http://www.bp.com/bponthestreet/home/default.asp This includes a feature on
BP’s US advertising campaign and its BP on the street campaign.
Patagonia outdoor clothing:
http://www.patagonia.com/enviro/main_enviro_action.shtml
B&Qhttp://www.diy.com/bq/templates/contentlookup.jhtml?content=%2Faboutband
q%2Fsustainability&root=%2Faboutbandq
Interface carpets and floor covering http://www.interfacesustainability.com/
Body Shop, http://www.thebodyshop.com/web/tbsgl/values.jsp
SMART car http://www.smart.com/
See also report from McCann Erikson for brief profiles of more sustainable
marketing efforts by household names:
http://www.uneptie.org/pc/sustain/reports/advertising/can-sustainabilitySell%20.pdf
See also http://www.greenmarketing.com for several case studies
5. More Resources
We are particularly indebted to the work of Jacqueline Ottman, Martin Charter and
Ken Peattie who are undertaking leading edge work in this area. See especially:
Books:
Green Marketing: Opportunity for Innovation Jacqueline Ottman (NTC-McGrawHill, 1998) This has extensive examples and case studies and provides practical
advice. Despite the title much of the advice is applicable to sustainable marketing.
Greener Marketing, Charter M and Polonsky M Ed (Greenleaf Publishing UK,
1999)
Websites:
Visit http://www.greenmarketing.com This is the site of Jacqui Ottman’s
consultancy: Ottman Consulting, Inc, and includes extensive information including
an online version of Green Marketing: Opportunity for Innovation. It also
includes lessons from the green graveyard looking at marketing mistakes:
http://www.greenmarketing.com/speeches/tspd7.html
Visit www.cfsd.org.uk/smart-know-net this includes references to other sites of
potential interest to sustainable marketeers.
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D) Who are the sustainable consumers?
Our understanding of customer behaviour on ethical and sustainable development
grounds is still evolving. Particularly useful is groundbreaking research by Roger
Cowe and Simon Williams.11 They classified UK consumers by their use of
‘ethical’ criteria. Cowe and Williams propose the following segmentation
‘Do what I can’ 49%
This most substantial segment tends to be older. They have ethical concerns but
don’t hold them very strongly. Service, convenience and brand name are most
important to them. Their ethical concerns focus on treatment of employees.
‘Look after my own’ 22%
This is the segment least concerned with social, ethical or environmental concerns.
‘Conscientious consumers’ 18%
More upmarket than the first two segments. More likely to be car owners
homeowners and shareholders. Quality is more important to them than brand, so if
quality and price are removed then ethical considerations influence their decisions.
They will buy or avoid products because of company reputations.
‘Global watchdogs’ 5%
This is the most concerned segment and most likely to act on their concerns. They
are also the most affluent with 10% having a household income of over £40,000 a
year. They are typically 35-55 and professionals. They actively seek information
on ethical considerations, with brand unimportant to them.
‘Brand generation’ 6%
Many of this group are young. They are concerned with ethical issues and talk
about them to their friends, but when shopping, brand names quality and value for
money are most important. Their sustainability concerns focus on treatment of
employees and environmental impact. They could be described as the Nike
generation influenced by the publicity over sourcing practices.
The ‘Global watchdogs’ segment is the one with the most obvious potential but the
other segments offer opportunities too, notably the conscientious consumer and
the Brand generation.
11
Who are the Ethical Consumers? Roger Cowe and Simon Williams. (2000) Published by the Cooperative
Bank
17
In the US Roper Starch World-wide12 has identified five segments of customers
with varying degrees of concern and action
True blue green 11% major green purchasers and recyclers
Greenback Greens 5% will buy or give green but won’t make significant lifestyle
changes
Sprouts 33% who care but would only spend a little more to buy green
Grousers 18% see the environment as a problem but somebody else’s
Basic Browns 31% essentially don’t care won’t care
Research by Weber Shandwick Worldwide13 demonstrates the potential of social
responsibility issues such as environmental or employment policies, to cause
‘Brand switching’. A survey of 8000 customers worldwide suggested that twothirds of all ‘alpha class’ (high education/high income) customers have considered
switching brands because of corporate social responsibility issues.
A study by Pulse™/UNEP study14 sought to gain a better insight into how young
people view Sustainable Consumption. The research took place in 28 countries
across Europe, Asia Pacific, South and North America. The study found general
confusion regarding the terminology ‘Sustainable Consumption’, but found that
young people have strong concerns about three sustainability related issues: the
protection of the environment, animal testing and human exploitation in developing
countries. The study suggests that young people want to ‘Have it All’. They are
both hedonists and idealists, they want a sustainable planet and their favourite
brands. This is the ‘use and throw’ generation, but at the same time, they have
dreams of a private and wonderful world. They are not yet aware of the
consequences of their own shopping behaviour. There is a feeling that they are
‘unable to change the world’. Yet they want the world to change. See UNEP
website for further information on the views of young people and other consumers
15
.
In Green Marketing Jacqui Ottman identifies 3 key customer needs to tap into:
• The need to make a difference – to feel empowered to contribute despite the
scale of the challenge
•
The need for information in order to make a choice
• The need to maintain lifestyle- product performance, quality, convenience and
price remain important
12
Quoted in Marketing and sustainability p7 by Martin Charter, Ken Peattie, Jacqueline Ottman and Michael J.
Polonsky Published by Centre for Business Relationships, Accountability, Sustainability and Society (BRASS),
in association with The Centre for Sustainable Design, April 2002. Or seehttp://www.cfsd.org.uk/smart-knownet/smart-know-net.pdf
13
Quoted in “Can Sustainability Sell?’ (2002) McCann-Erickson / UNEP. Also
at:http://www.uneptie.org/pc/sustain/reports/advertising/can-sustainability-Sell .pdf
14
Pulse UNEP study quoted in “Can Sustainability Sell?’ (2002) McCann-Erickson / UNEP Also
at:http://www.uneptie.org/pc/sustain/reports/advertising/can-sustainability-Sell .pdf
15
Examples of UNEP trend studies are “The Global Consumer Class” and “Is the Future Yours?” can be found
on UNEP’s website:http://www.uneptie.org/sustain
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The B2B Market
There is increasing evidence of interest from the B2B market in sustainability. The
Institute of Business Ethics16 found that: “in August 2001, 73 of the companies
listed in FTSE100 either had a code of business ethics or had one in preparation.”
These codes frequently cover subjects such as product responsibility, responsible
advertising and marketing and may refer to sectoral initiatives such as the Portman
Group which publishes and monitors guidelines on the distribution of alcoholic
beverages.
The number of large companies publicly reporting on their sustainability
performance rose sharply in the 2001/2 reporting year. This was led by pressure by
institutional investors particularly the insurers who have threatened shareholder
action against companies who do not produce this information. Fifty of the top 250
largest companies reported for the first time in 2001/2. This takes the tally for top
250 companies producing substantial sustainability type report to 103, with a
further 87 including the information in Annual Reports. Take up of the international
environmental management standard, ISO14001 has grown, by the end of 2001 it
had been taken up by over 37,000 organisations across the world.
Companies concerned about sustainable development and corporate social
responsibility are becoming increasingly interested in the performance of their
supply chain on these issues, and in some cases attaching performance conditions
on suppliers.
16
, Business Ethics and Company Codes, Simon Webley, (2001) Institute of Business Ethics
Who are the Ethical Consumers? Roger Cowe and Simon Williams. (2000) Published by the Cooperative
Bank
18
Who are the Ethical Consumers? Roger Cowe and Simon Williams. (2000) Published by the Cooperative
Bank
19
Quoted in “Can Sustainability Sell?’ McCann-Erickson / UNEP2002Pulse UNEP study
20
, Business Ethics and Company Codes, Simon Webley, Institute of Business Ethics (2001)
17
19
E) Product and Service Sustainability Checklist
(based on the WBCSD document, Sustainability Through The Market)
See SIGMA Risk, Opportunity and Sustainability Guide for pitfalls before completion of checklist, ref 4. Key lessons and things to
avoid
Question
Yes/No
Action
Comments
1. Innovate
All businesses must innovate to survive and prosper. Both technological and social innovation can do much to improve quality of
life and address the depletion of resources and the build-up of pollution around the world. Any innovation process must be
sensitive to the interests of the public.
If we are to become more sustainable in the way we live our lives, we need to find new ways to satisfy our needs and aspirations.
We need to find new ways to do old things, as well as new ways to do new things. Markets liberate ingenuity by encouraging
experimentation and rewarding those ideas that meet people’s needs and aspirations most efficiently
Example: Sony has introduced energy saving features into its SDM-N50 liquid crystal display units to reduce energy consumption
in the user-phase of the product’s lifecycle. A user senor automatically switches the screen to sleep mode if no one is sitting in front
of it; while an ambient light sensor adjusts the screen brightness and therefore energy consumption according to room light
conditions.
Is the product/service designed to last,
easily repairable?
Is the product / service innovative in
terms of its potential impact on quality
of life or reduction in depletion of
natural resources and pollution?
20
Question
Yes/No
Action
Comments
Does the product / service allow new
way(s), to do ‘old things’, or new
way(s) to do ‘new things’?
2. Practice eco-efficiency
Eco-efficiency is a management strategy that combines environmental and economic performance. The strategy enables more
efficient production processes and better products and services while reducing resource use and pollution. In short, it is creating
more value with less impact. The pre-eminent goal is to grow economies qualitatively, not quantitatively.
Eco-efficiency = unit of value provided per unit of environmental burden
Example: General Motors redesigned its chemical management approach to create a single primary manager of chemicals for
each manufacturing facility that is responsible for the outputs from the chemical services rather the supply of the chemical. In this
way efficiencies such as cutting spillages rather than buying detergents to clean spillages are encouraged. At GM’s Detroit/
Hamtramck assembly plant this approach in one year cost US$19,000 to implement, but saved US$1.6M; while reducing water use
by 11.8M litres and 115,000 litres of topcoat paint.
Is the product/service energy-efficient,
i.e. reduced CO2 emissions in the
making, use and recovery/disposal?
Is the product/service non-polluting?
Is the product/service re-usable and
recyclable?
Is the product/service manufactured
from locally sourced materials to
minimise transport impacts?
Can the material intensity of the
product/service be reduced?
21
Question
Can the energy intensity of the
product/service be reduced?
Yes/No
Action
Comments
Does the product/service reduce toxic
dispersion?
Does the product/service enhance
material recyclability?
Does the product maximise
sustainable use of renewable
resources?
Is it possible to extend the durability of
the product/service?
Can the service intensity of the
product/service be increased?
3. Move from stakeholder dialogues to partnerships for progress
This means moving beyond talking to one another to acting together for the purpose of sustainable development. Partnerships for
progress are built on common goals, empathy, open feedback, flexibility, ability to compromise, and sharing rewards
Example: Aventis Pasteur produces and sells over a billion doses of vaccines per year. To help bring greater security of supply to
developing countries it has become a partner in the Global Alliance for Vaccines and Immunization (GAVI). The partners in GAVI
are from the vaccine industry, the World Health Organisation and governments. Participation in the alliance is a central approach
for Aventis Pasteur to help participate in reaching the 40-70 million children born yearly who would not otherwise have access to
preventative intervention.
Does the use of the product/service
create a social nuisance?
Does the use of the product/service
h
d h
ll b i ?
22
Question
create a hazard to human well-being?
Yes/No
Action
How accessible is the product/service
to different people? (e.g. people with
disabilities, excluded groups?)
Does the product/service have a
positive impact on local communities?
Does the product/service have a
positive impact on society more
generally? (e.g. educational or safety
benefits)
Are there any ‘strategic partnerships’
that could be explored for developing
or marketing the product / service?
23
Comments
Question
Yes/No
Action
Comments
4. Provide and inform consumer choice
Consumer choice in a transparent and competitive market economy can improve everyone’s quality of life. Market choices allow
us the freedom to decide how best to use our own resources to enhance our quality of life. Providing choice is therefore a key part
of promoting sustainable development. Business and other stakeholders can use the media and advertising to promote
sustainability messages, fostering a consumer culture that helps people wield the power of demand in a thoughtful way.
Companies increasingly find that they must communicate the values and principles on which they base their operations – values
that their stakeholders can identify with over the long run. Individuals will change their consumption practices when they realise
that they gain added value from sustainable behaviour in terms of financial benefits, quality of life and security. Consumer choice
helps achieve sustainability, by reducing environmental and social impacts and by increasing the market share of sustainabilityminded companies
Sustainable consumption is not about consuming less, it is about consuming differently, consuming efficiently and having an
improved quality of life. Consuming differently = more quality and knowledge and less quantity and waste
Example: Members of the International Association of Soaps, Detergents and Maintenance Products (AISE) have sought to be
more closely involved in reducing the environmental impacts of soaps and detergents by promoting the proper use of products. Life
cycle analysis suggest consumers control the majority of energy use, air emissions and solid waste associated with laundry
products. Since 1998 AISE consumer packaging has included a Washright logo as part of a wider media campaign to reduce
laundry products’ impacts as well as a reminder panel of hints to reduce environmental impacts.
Is sufficient information about the
product/service provided to customers
to enable choice?
Does the advertising for the product /
service promote ‘consumption
solutions’, rather than intensifying
‘consumption problems’?
Can you be sure that what is
advertised as being ‘sustainable’, or
24
Question
Yes/No
Action
Comments
‘eco-efficient’ is consistent with what
the product / service can actually
deliver in practice?
5. Improve market framework conditions
Markets depend on a stable and supportive framework of public policy. The rule of law, freedom of competition, transparent
accounting standards, and a safe social context all contribute to the ability of business to create wealth. Market aspects which
hinder sustainability include monopolies, corruption, perverse subsidies, and process which do not reflect real economic, social and
environmental costs. Legislation and regulations should promote competition, effective intellectual and physical property rights,
reliable contractual terms, fair and transparent accounting standards, accountability for government intervention, freedom and
democracy, and full-cost pricing of goods and services
Example: The European Union Energy Labelling system was introduced on fridges and freezers in 1995 and has since been
extended to washing machines, tumble driers, dishwashers and other household goods. This mandatory scheme which ranks
equipment on a scale from A to G was introduced to harmonise national measures relating to consumer information, while over
time the worst performing appliances have been withdrawn, although consumer pressure has performed the task in the main.
Is child labour used in manufacturing
the product/service in-house or under
contract?
Is forced labour used in manufacturing
the product/service in-house or under
contract?
25
Question
Yes/No
Action
Comments
6. Establish the worth of Earth
The market system needs accurate and timely price signals so that resources are not wasted and future opportunities squandered.
We can improve our markets so that they reflect the true costs of environmental goods and services and social impacts. Often this
is by moving towards full-cost pricing – including removal of perverse subsidies. Economic instruments such as tradable permits
can encourage business towards constant environmental improvements. Realists pricing is the optimal means of supporting
change in the market.
Example: Since 2000 Shell International has established an internal market approach to reducing corporate greenhouse gas
emissions. The company issues a limited quota of permits to emit GHGs which are traded among participants as they would for
other commodities. In the first year of operation emissions were reduced by half a million tonnes over 1998 levels.
Is packaging associated with the
product/service minimised?
Is the product/service manufactured
from renewable resources?
Does the product/service use or create
hazardous materials?
Is the product/service tested on
animals?
Does the use of the product/service
create a hazard to animal well-being?
Does the product/service restore the
environment?
26
Question
Yes/No
Action
Comments
7. Make the market work for everyone
Poverty is one of the single largest barriers to achieving sustainability through the market. The 2.8 billion people living on less than
two dollars a day have little or no access to the market to improve their lives. The market does create enterprises and jobs, but
there will be rewards for companies who deliberately create more opportunities and a better quality of life for the poorest. Many of
these opportunities will lie in the areas of healthcare, water, housing, nutrition, electricity, education, appliances and sanitation
Example: The Sustainable Community-orientated Development Programme (SCODP) is working in rural Kenya tackling soil
nutrient deficiency through the provision of small packages of micro-nutrients and seeds to small scale farmers at affordable
quantities. These packs bring improved harvest while simultaneously breaking the cycles of soil erosion and also social decline.
How affordable is the product/service
to those for whom it represents a basic
need?
27
F) Assessing your Key Sustainability Issues
If your organisation has begun to understand and manage its sustainability issues, you should have a good idea of the key issues –
and these can become the basis for your assessment. For each issue you need to assess:
What is the wow factor? – does this issue have a resonance with your customers or potential customers? Does it represent a
significant and recognisable difference from your competitors?
What are the risks? – are there potential risks from making positive claims around this issue, for example, a company may have
managed to reduce or eliminate the amount of pesticide residues in some of its produce. This is a risky claim as it highlights both
the fact that the produce used to contain pesticides – and that some other produce still does – and the customer may well have
always assumed that there would be no pesticides in the produce.
Can the credibility be demonstrated? – How can you convince your customers that the issue is a point of difference and that
your performance is demonstrably better? A good example of this might be being placed top in a league table assessing this issue
– provided of course that the league table has credibility with your customers. Some issues are more readily understood by
consumers, or have clear standards that can be met. For example, eggs are either free-range or not, food is either organic or not,
your company has won an award or not.
How easy is it for your competitors to follow? – How much of a head start do you have on your competitors? Would your
position be unassailable, be a benefit by you being the first, or will you find that this is no longer a point of difference in six month’s
time – and will that matter? An example of an unassailable position might be a company that develops a technology for which it
owns the patent and can control its use, or a company which produces all its products in-house so can provide cast-iron assurance
of meeting high labour standards when all its competitors have outsourced their supply so can’t.
Key
Sustainability
Issue
What is the ‘wow’
factor for your
customers?
What are the
risks?
Can the credibility How easy is it for
be demonstrated? your competitors
to follow?
Issue 1
Issue 2…
28
Assessment
G) Mapping the options
The Point of difference scale measures the extent to which your offering is
different from your competitors and how long it can remain so.
The Ease of communication scale measures both the ease with which the
credibility can be demonstrated and the ease with which this can be
communicated in a way that interests the customer.
You may do this mapping using your best judgement, or you may wish to
establish some quantifiable criteria with which to justify your assessment.
Those closest to the top right hand corner are the most promising.
best
offering
Point of difference
offering too
hard to
communicate
nothing to
differentiate
offering
worst
offering
Ease of communication
29
H) Mapping trustworthiness
Trust is important in assuring brand value, building customer loyalty, creating
added value and many other areas of business. When sustainability is added
to the equation, trustworthiness becomes an even more potent ingredient.
Assessing the trustworthiness helps to decide the most promising offerings
and also to identify the risks involved.
A product that has high levels of trustworthiness for personal and future trust,
may look promising, but if it’s produced using un-audited developing-world
suppliers, could present a major risk if those suppliers turn out to be using
child labour. A risk that makes it’s potential for marketing on sustainability
grounds unviable. This does not mean that the offering has no potential – it
could just mean that the organisation must assure its supplier’s performance
before developing a marketing campaign.
How trustworthy is the offering?
Personal
Others
Looking
Looking
after others
after me and
e.g.
my family
child labour
e.g. pesticides
Future
Looking after the future
e.g. fish stocks
30
Offerings that fit
here have the
most potential
About the SIGMA Project
The SIGMA Project - Sustainability Integrated Guidelines for Management
was launched in 1999 with the support of the UK Department of Trade and
Industry (DTI) and is led by:
•
•
•
British Standards Institution - the leading standards organisation
Forum for the Future - a leading sustainability charity and think-tank
AccountAbility - the international professional body for accountability.
The SIGMA project has developed the SIGMA Guidelines and a series of
tools to provide clear, practical advice to organisations to enable them to
make a meaningful contribution to sustainable development.
The SIGMA Guidelines consist of:
•
a set of Guiding Principles that help organisations to understand
sustainability and their contribution to it.
•
a Management Framework that integrates sustainability issues into
core processes and mainstream decision-making. It is structured into
phases and sub-phases.
The SIGMA Toolkit, consists of targeted tools and approaches to help with
specific management challenges, and case studies explaining how
organisations have used the SIGMA Guidelines and Toolkit to tackle real
issues.
More information including the full SIGMA Guidelines and the accompanying
SIGMA Toolkit are available at: www.projectsigma.com.