The business case for ‘green’ in a recession
Perspectives from Paul Dickinson, Chief Executive Officer at the Carbon Disclosure Project
As appeared in Compact magazine
According to Martin Sorrell what distinguishes similar products is the way we feel about them* and that is often associated with the way they are marketed and sold. This may have been true, until climate change became an issue. Now what might seem to be two very similar products may in fact be very different due to their carbon footprint. Inevitably finding solutions to the problem of climate change will become the defining creator of market share and profitability in the 21st century.
Climate change is like the Internet; it arrives one day and gets bigger every year, it never goes away and you have to learn to make money from it. As a business it is not an issue you can ignore. As Jeremy Darroch, CEO of British Sky Broadcasting said to me recently, “Climate change is a fundamental issue that will define consumer behaviour for the next 10, 20 and 30 years.”
If companies want sustainable employment and growth they need to invest in and back the solutions to the problem of climate change rather than exacerbate the problem through their own activities. And lower carbon solutions have the potential to bring significant profitability to business. Look at the Toyota Prius which is enjoying expanding market share just as other large car manufacturers are laying people off.
Economic growth can continue without increased energy use when consumer expenditure moves towards greater consumption of ‘de-materialised’ products; that is, moving towards those products that do not negatively impact the environment. And as we begin to see regulation and a carbon price, companies will be able to more clearly understand greenhouse gas emissions associated with their products and services and develop new lower carbon solutions that they can then market and sell, based on solid and factual foundations.
And this is vital. Why? We are experiencing some confusion around ‘green’ and what it actually means. Organisations need to be far more specific in their marketing of products and never be tempted to green wash, as their competitors and purchasing public are highly likely to find them out and see through their attempts to ‘appear’ green. Instead, with the increasing threat of dangerous climate change, consumers expect and deserve transparency around how a company and its products are impacting the environment. It is important to provide high quality information and explain exactly how a company and its products and services emit less greenhouse gas than that of their competitor. It will be the provision of this strong quantitative information that feeds consumers purchasing decisions and, ultimately, marketing success.
* Ref: Martin Sorrell at the Listener media lunch in 1989