The power of green: what business needs to know about sustainability in 2011

Transcription

1 The power of green: what business needs to know about sustainability in 2011 Graeme Colman, Operations Manager, New Zealand Business Council for Sustainable Development. Green Living i Show, Greenlane, Auckland, 29 May 2011

2 10 answers on sustainable practice: 1. What do your customers expect? 2. Will they pay more if you do the right things? 3. How many are willing shift to or from you? 4. What do they want to know from you? 5. How are your major buyers selling it? 6. How does your thinking compare with other business leaders? 7. Is it your best opportunity this year to lift profits? 8. Are you engaging staff? 9. How to turn your staff into company advocates 10.Why is it the right thing to do?

3 The Kiwi values set you sell into What matters to Kiwis Enviro 5% Quality of life 70% Economy 5% Surviving 20% 5 think its only about the economy 5 say its only about the environment 20 say that life is too hard for me to think about anything other than today 70 say I want a better standard of living and to maintain my quality of life: we should make decisions on what s best long term - UMR research for the Business Council

4 What factors do you consider when purchasing products? Organic? Fair Trade? Local? Low carbon intensity? Eco-friendly? Cost or price only? Socially responsible? Don t care? Other?

5 What your NZ customers expect The top rating factors New Zealanders consider before buying a product include it being: local (59%); eco-friendly (57%); fair trade (55%); environmentally sensitive (55%); lowest cost or price (54%); socially responsible (37%); and organic (29%) don t care 1.8% ShapeNZ July 2010 survey 1812 consumers. Weighted Maximum margin of error +/- 2.1%. We have now reached the tipping point where non-price characteristics are almost as important as price BUT

6 Will they pay more? Mainly no, but non-price attributes are increasingly important When asked to select just one factor, the most important is: price (46%); followed by local and eco-friendly (both 11%); environmentally responsible (10%); fair trade (7%); socially responsible (7%); and organic (2%). Get other factors as well as the price right - attract significant market share ShapeNZ July 2010 survey 1812 consumers. Weighted Maximum margin of error +/- 2.1%.

7 Times have changed, mostly.. the Erin Brockovich Noel Leeming - Bond and Bond backfire October 2007

8 And by way of contrast A total commitment = No 1

9 When considering brands with sustainable attributes, which of the following has the greatest influence on you?

10 So what do Kiwis want to know from you? Three major factors affecting your customers: The experience you gave them (65%) Knowledge about the company promoting the product (45%) Brand trust (42%) You have significant opportunities to lift market share by communicating credible information from your brand about your authentic actions

11 Experience + Knowledge + Brand Trust +? The results indicate if sellers use eco-labels backed with authentic information this could make as many as 85% more likely to buy.

12 How many consumers are willing to shift? Eco-labels certifying environmental friendliness can make New Zealanders 29% more likely to buy a product. Other research indicates here and in key markets overseas that t 32% of the market will shift TO or FROM you when people find out about you. ShapeNZ July 2010 survey 1811 consumers ShapeNZ July 2010 survey 1811 consumers. Weighted Maximum margin of error +/- 2.1%.

13 Are you engaging staff? 25% of staff less likely to stay in an organisation not paying enough attention to the environment and sustainable development (42% of managers) 50% (55% managers) more likely to stay if the organisation is paying enough attention to environment and sustainable development ShapeNZ July 2010 survey 450 business decision makers, 1810 employees. Maximum margin of error +/- 4.2%.

14 Are you turning staff into advocates? 59% (67% managers) would consider leaving any organisation whose corporate responsibility behaviour no longer meets their expectations 46% of employees (53% of managers) would not recommend their organisation to others if it were environmentally irresponsible ShapeNZ July 2010 survey 450 business decision makers, 1810 employees. Maximum margin of error +/- 4.2%.

15 How are some majors selling it? M&S, Wal-Mart, Tesco all want sustainability information on labels l and reports from all suppliers: to join major supply chains you need to get on the sustainability road Marks and Spencer s A Plan: by 2015 Converting 2.7 billion food, clothing and home items to meet sustainability standards; Encouraging 21 million customers to live more sustainable lifestyles; Liveable wages, training, education, basic healthcare and workers rights for 500,000 workers in suppliers factories; Encouraging 10,000 food supplying farmers to adopt a sustainable foods programme; Sourcing all packaging from a single model forest programme; Increasing the number of clothing garments customers recycle every year from 2 million to 20 million.

16 How does your thinking compare with CEOs worldwide? Global Compact s 2010 survey of 1000 of CEOs worldwide: by the numbers: 93% of CEOs believe that sustainability issues will be critical to the future success of their business 72% cite brand, trust and reputation as one of the top three factors driving them to take action on sustainability issues. Revenue growth and cost reduction is second with 44%. 72% see education as the global development issue most critical to address for the future success of their business. Climate change is second with 66%.

17 How does your thinking compare with other CEOs? Global Compact s 2010 survey of 1000 of CEOs worldwide: by the numbers: 58% identify consumers as the most important stakeholder group that will impact the way they manage societal expectations. ti Employees were second with 45%. 91% report that their company will employ new technologies (e.g., renewable energy, energy efficiency, information and communication technologies) to address sustainability issues over the next five years.

18 How do you compare with NZ peers? 75 out of every hundred senior executives and New Zealanders overall believe businesses should make a profit and contribute to the social good. 44% of NZ decision makers say their organisation has a sustainable development strategy Nearly 1 in 5 firms have sacked a supplier in the past year over environmental, social or ethical concerns 25% are actively buying goods and services for their organisations from suppliers who act sustainably. Have SD strategy Deselected suppliers ShapeNZ July 2010 survey 450 business decision makers consumers. Maximum margin of error +/- 4.2%.

19 Is it your best opportunity to lift profits? Revenue lines are not growing as fast as hoped for most businesses Sustainability may be the best cost cutting opportunity to lift profits in a recession: Helping the planet and people by using energy and water more effectively reduces waste and cost Staff are more likely to engage in helping cut costs, helping themselves and planet as well as shareholders Accor Hotels found energy efficient light bulbs cut power bills, but dramatically cut the cost of paying people to change bulbs which lasted 10 times longer. Fonterra has saved the equivalent of the entire electricity use of Hamilton

20 Is it your best opportunity to lift profits? Most businesses can reduce energy and emissions by measuring and monitoring emissions (see for our leading emissions calculator) buying or using more energy efficient vehicles (using GPS alone in the entire central and local government fleet would deliver a $50 million a year saving!) replacing air travel to meetings with video conferencing roll on faster broadband moving to better insulated premises, also improving staff health moving to LED lighting in retail areas will cut frozen food display, heating and air conditioning costs During economic growth this may not have been the best profitability opportunity available. Now it may be the only one

21 Is it your best opportunity to lift profits? Outcomes for Members from their business sustainable development practices or initiatives in the past 12 months Brand: Enhanced brand value 81% (73% in 2008) Opportunity: Identified new business opportunities 69% (82%) Savings: Cutting costs 62% (47%) Staff: Attracting and keeping staff 44% (64%) Changes in the past three years reflect increased value of cost savings in tougher economic times, and rising brand values - Business Council Member survey

22 Why it s the right thing to do You and your staff will feel good about it It engages staff and maximises their commitment to the business It provides a good opportunity to lift profits Helps position you and NZ for the future Helps recruit the smartest young talent who believe this is the way the world has to be Helps us align with our 100% Pure branding, to which h 80% of the economy is now linked It will help you survive the most difficult business environment in 20 years It s what your customers expect of you

23 Thank you Graeme Colman