CO 2. How can brands become carbon superheroes? Based on the event Carbon zero: the new brand hero?

Transcription

1 How can brands become carbon superheroes? Based on the event Carbon zero: the new brand hero? CO 2 Bravington House, 2 Bravington Walk, Regent Quarter, Kings Cross, London N1 9AF. T: +44 (0) E: info@carbonneutral.com 10 E. 40th Street, Suite 3110 New York, NY T: E: salesna@carbonneutral.com 6 Springleaf Rise, Singapore T: E: salesasia@carbonneutral.com

2 How can brands become carbon superheroes? To become a hero, a brand must do superhero stuff and consumers have proven that they will beat a path to those heroes. Subramaniam Eassuwaren, Director of Eswaran Tea Chairing a recent seminar co-hosted by The CarbonNeutral Company and Forum for the Future, entitled Carbon Zero The New Brand Hero?, Dr. Sally Uren, Deputy Chief Executive of Forum for the Future, highlighted the role of brands as crucial agents of transformative change in the marketplace and emphasised that retailers and manufacturers are the key to creating a low-carbon sustainable economy. Retailers, as Ruth Girardet, Corporate Responsibility Director for Tesco, explained, are important because they profoundly affect the lives of ordinary consumers, Tesco s size and reach mean that we touch many people s lives, every day, which gives us a great opportunity to drive green behaviours. They also send important signals to manufacturers and suppliers around the world. Mr. Eassuwaren explained that for suppliers in Sri Lanka and other developing countries, demand from the developed world for carbon neutral and other ethical products has shifted the direction of the entire market. However, consumers must also be at the heart of the carbon neutral revolution. The products consumers buy and use every day account for about 45% of annual carbon emissions. Brands will only win over consumers if they can effectively communicate their carbon neutral initiatives, says Graham Hales, Managing Director of the consultancy Interbrand, the creative minds behind Fairtrade certification. The problem is that the carbon debate is fragmented. Everyone is saying similar stuff, but branding it in their own way, leaving customers confused and jaded. So what is the answer? Are retailers reaching customers or losing them? Eco-friendly, climate-friendly, low-carbon, green: nowadays, customers of any major retailer can expect to encounter a dizzying array of labels telling them that different products are good for the environment. But does slapping a green label on a product really influence consumers? As it turns out, the answer is more complex than many retailers think. A study 1 conducted by Consumer Focus revealed that the current versions of green labelling aren t working well to engage consumers. Customers are confused by a plethora of different green labels, competing certifications, and brands pursuing and advertising their own, often complex, environmental policies. Not only did almost two-thirds of consumers say they have a hard time telling green products from less environmentally-friendly versions, but 65% said they didn t know how to tell whether a product s environmental claims were true and a staggering 78% thought it was possible for companies to make false green claims and get away with it. Furthermore, 58% suspected that companies pretend to be green in order to charge more for their products. This level of confusion has created a value-action gap between consumers beliefs that green products are worth buying (even if it means investing more time and money) and their actual purchasing behaviour. However, Lucy Yates, Principal Policy Advocate for Consumer Focus, believes this gap is not down to consumers lack of commitment but because of the state of confusion surrounding green products. In fact, the study found a genuine hunger among consumers for straightforward environmental information they can trust. Major retailers and manufacturers must find a way to reach consumers, and to give them clear, credible, and comparable information about their products environmental credentials. Effective green communications are the key to bridging this gap and they all have three things in common: they are clear, credible, and comparable (so that consumers can size up different products at a glance). The green products sector has enormous potential: despite the difficult economic climate putting a general damper on consumer spending, The Cooperative Bank s 2009 Ethical Consumerism Report revealed that spending on green products for the home has increased fivefold in the past decade, up from 1.4bn in 1999 to 7bn 2. To unleash the true power of the green products market, however, major retailers and manufacturers must find a way to reach consumers and to give them clear, credible, and comparable information about their products environmental credentials. 1 Consumer Focus, Green expectations: consumers understanding of green claims in advertising, (June 2009) 2 The Co-operative Bank, Ten Years of Ethical Consumerism: , (2009)

3 Brands, labels, and marks what works, what doesn t When it comes to creating and advertising green products and services, some of the UK s largest branded retailers and manufacturers, such as Unilever, Sainsbury s and Marks & Spencer, rely on developing brand-wide environmental strategies. The goal of these strategies is to develop the retailer s or manufacturer s brand so that customers come to think of it as synonymous with environmentally-friendly policies. But do consumers trust brand-wide strategies, and do they meet the three requirements of clarity, credibility and comparability? With its comprehensive Plan A programme, Marks and Spencer has successfully broken down over 100 separate commitments into five easy to understand pillars: climate change; waste; natural resources; fair partnership and health and wellbeing. This strategy has been well received by customers so far but is more needed to enable consumers to understand and compare carbon impact at a product level? When it comes to cutting carbon emissions, the time frame is short. If climate change is to be contained, there needs to be clarity of message now - with carbon neutral products and services rapidly becoming mainstream. As an alternative to brand-wide strategies, some retailers and manufacturers prefer the use of on-pack green labels or carbon neutral certification marks for particular products. Label and mark may sound like similar concepts, but there s a crucial difference: certification marks, like the Fair Trade mark, organic certification and the mark of the Forestry Stewardship Council, verify that the product has been proven to meet a strict set of external criteria. Marks carry the full weight of the independent organisations that manage them (such as Fairtrade Labelling Organisations International or independent carbon management companies, like The CarbonNeutral Company). Labels don t carry the same weight. There are no external controls on green labelling, so retailers and manufacturers design and use a wide variety of labels, backed up only by the companies claims. Labels and certification marks have very different effects on consumers, as Lucy Yates of Consumer Focus described: Consumers trust verified schemes they recognise, like the Fairtrade mark. But they can be cynical about schemes they don t recognise. Company-designed labels lack the clarity, credibility and comparability that would make them effective forms of communication. The use of different labels by different brands means that it s difficult to decipher the claims a label makes. Not only that but, to date, major retailers and manufacturers that use low-carbon labelling, such as Tesco and PepsiCo, have only managed to do so on a fraction of their products. Tesco, for example, has rolled out its Certified marks, earn consumer trust: the fact that marks are defined and backed up by an independent authority makes them both clear and credible. carbon labels on only 120 products. Although it has ambitions to label many more, in the meantime it is difficult for consumers to compare the carbon content of products, even when those products come from the same company. Finally, the fact that labels carry no verification beyond the retailer s word damages their credibility and fuels consumers suspicions of greenwashing. Certified marks, on the other hand, earn consumer trust: the fact that marks are defined and backed up by an independent authority makes them both clear and credible, and they remain consistent across products and brands, making it easy for customers to see in an instant whether a product is organic, Fairtrade, or CarbonNeutral. If carbon neutral certification marks are currently following the same path that organic and Fairtrade certifications first carved out, the success of those certifications holds valuable lessons for the future of carbon neutral marks. Left to right: Dr. Sally Uren, Lucy Yates, Ruth Girardet, Subramaniam Eassuwaren and Jonathan Shopley

4 Mr. Hales went on to explain that certifications can do for carbon neutral products what the Fairtrade mark did for ethical trading. Manufacturers and retailers who undertake their own brand-wide strategies, he said, are certainly laudable, but they re getting in the way and making the debate more difficult for the public to decipher. This creates a kind of background cynicism, where green action can be perceived as greenwashing. It is vital for the carbon market to come together and back a single standard, he concluded. Crucially, Fairtrade certification has led to commercial success for many brands a benefit that CarbonNeutral certification also offers. Carbon neutrality is a value proposition for consumers. The Fairtrade mark has made its value proposition very clear to customers; now CarbonNeutral certifications must do the same. Subramaniam Eassuwaren, Director of Eswaran Tea Farm worker picking coffee beans to be roasted, packaged and shipped around the world by Café Bom Dia, a CarbonNeutral company and one of Brazil s largest producers of sustainable coffee. Fairtrade the journey from fad to future In the UK market, thanks to support from visionary retailers, some certifications are becoming mainstream. Fairtrade status is well on its way to being the cultural norm for certain products, especially bananas, coffee and sugar. The creation of the Fairtrade certification mark in 2002 led to an explosion in the sale of Fairtrade products. After less than a decade, there are 1.5 million Fairtrade producers worldwide and an estimated 7.5 million people in the developing world benefit directly from Fairtrade sales. Bolstered by the Fairtrade mark, the ethical trade sector has grown by an astonishing 40% each year, on average, for the past five years, and even managed 22% growth in 2008, at the height of the recession. Like The CarbonNeutral Company s CarbonNeutral certification and other environmental certifications, the Fairtrade mark faced the initial challenge of establishing its credibility in the marketplace, but has become a mature and widely accepted standard. The Fairtrade mark was something everyone could understand and support, said Graham Hales, Managing Director of Interbrand, which first created the Fairtrade certified mark to distinguish products that met the stringent social, economic and environmental standards of Fairtrade Labelling Organisations International. The fact that it was a single mark made it an effective way to communicate with the public. Fairtrade has a clear mandate, and the development of the Fairtrade mark was demand-led companies were seeking out [Fairtrade Labelling Organisations International] to certify their products. The evolution of the certification mark from idea to paradigm As Jonathan Shopley, Managing Director of The CarbonNeutral Company, pointed out, We no longer have products certified, Not Made With Slave Labour, because it s safe to assume that now. Certain ethical standards for products and services have survived long enough to become paradigms and it would be virtually unthinkable (and, in many cases, illegal) to offer a product that did not meet these basic standards. So, how does a certification become such an intrinsic part of the It s about a company making a commitment to set, and meet, a scientifically defined target. A 50 80% reduction in carbon emissions by 2050 means a massive change, and companies will not get there on their own. Jonathan Shopley, Managing Director, The CarbonNeutral Company marketplace and the culture that consumers won t accept anything less? It s about a company making a commitment to set, and meet, a scientifically defined target, Mr. Shopley said. A 50 80% reduction in carbon emissions by 2050 means a massive change, and companies will not get there on their own. A good certification one that can stand the test of time to become a new paradigm is clear, credible, and comparable. It establishes a clear target, based on credible scientific standards and verifies that companies have met that target meaning that consumers can trust products that carry the certification mark and can compare them to other products easily.

5 Graham Hales emphasised the importance of clarity and comparability in carbon neutral certifications and further outlined the path to a new paradigm. First, we need several big corporations to ring-fence what they want to communicate, in order to create a common platform within one market, which could then be extended to different markets. Secondly, the carbon market needs to reach consensus around a set of base-level grading points for carbon and to agree on what should be communicated [by carbon neutral certifications]. Given the urgency of the fight against climate change, carbon neutral products must become a new cultural norm. Dr. Sally Uren described Forum s vision of smart consumption : a world where sustainable products and services are mainstream rather than niche, where people want to buy these because they are affordable and desirable. Mr. Shopley added to this, saying that the necessary shift to a low-carbon economy will mean that all products must become carbon neutral and the sooner, the better. The CarbonNeutral certification mark is a vital step for retailers now, he said, and we look forward to a time when consumers can be confident that all products they purchase have a zero carbon footprint. A selection of CarbonNeutral products on display at Carbon Zero: The New Brand Hero? held at The Design Council on 13 April 2010 The purpose [of establishing certifications] is to work for the greater good, added Mr. Hales. It s about collaboration, which is a word everyone uses, but they usually mean, How can I use this to advance my own interests? We need people to come together. Certification the way forward Certification marks are invaluable tools for retailers: they focus a brand s work towards achieving specific and (especially in the case of carbon neutral certifications) scientifically grounded goals and they translate that work into a simple, powerful message consumers can instantly understand. Certifications also make it clear to suppliers that certain ethical values matter to the retailer and inspire those suppliers in turn to bring their own business practices in line with the certification. The focus of the carbon neutral revolution must ultimately be on consumers and on empowering them to make the shift towards low-carbon, sustainable consumption. The research compellingly shows that consumers feel overloaded with fragmented and contradictory information and desperately need clear, credible and comparable certifications to guide them on their way. However, the creation of a truly sustainable market needs brands willing to step up and, as Subramaniam Eassuwaren puts it, do superhero stuff to win the trust of consumers. To effectively communicate their green initiatives, these superhero brands need a common language, with a common set of benchmarks: exactly what externally verified certifications can provide.