Sustainability Marketing Transformations from the “Inside-Out”

The issue of climate change

On 8 June 1997 the Business Roundtable sponsored full-page advertisements in the US press, signed by more than 100 CEOs, arguing against mandatory emissions limitations at the forthcoming Kyoto conference. The Business Roundtable is one of the most influential business associations in North America; it is an association of CEOs of leading US companies with more than $5 trillion in annual revenues and more than 12 million employees. Long before that the Global Climate Coalition, representing about 40 producers and users of fossil fuels, challenged the science of climate change, and challenged the phenomenon of global warming.

Since then a lot has changed in the corporate responses to climate change: British Petroleum was the first of the major oil companies acknowledging the link between greenhouse gases and global warming. In 1997 it left the GCC. Other multinational companies like Dupont, Ford, Royal Dutch/Shell, General Motors, and Texaco followed suit. Since 2002 the GCC has been defunct due to the departure of most members. Five years later the Business Roundtable published a White Paper on Climate Change supporting actions to address global warming. On 30 November 2007 the Corporate Leaders Group on Climate Change (CLG) published The Bali Communiqué supporting an international and comprehensive legally-binding United Nations agreement to reduce greenhouse gas emissions. It appeared in the global edition of the Financial Times on the eve of the UN climate change conference in Bali Indonesia and was endorsed by 150 companies from around the world.

In 2009 the CLG reinforced the message to governments that a large part of the international business community wants a strong and effective international climate framework by publishing the Copenhagen Communiqué on Climate Change. The communiqué is a call from business for an ambitious, robust and equitable global deal on climate change, signed by more than 900 companies, from the US, EU, Japan, Australia and Canada, to Brazil, Russia, India, China and South Africa; ranging from the world’s largest companies and best known brands, to small and medium sized enterprises. It asks for an agreement, which establishes a long-term global emissions reduction pathway for all greenhouse gas emissions and sources (50-80%) for the period 2013 to 2050, with common but differentiated responsibilities for developed and developing countries. It says:

“These are difficult and challenging times for the international business community and a poor outcome from the UN Climate Change Conference in Copenhagen will only make them more so, by creating uncertainty and undermining confidence. In contrast, if a sufficiently ambitious, effective and globally equitable deal can be agreed, it will create the conditions for transformational change in our global economy and deliver the economic signals that companies need if they are to invest billions of dollars in low carbon products, services, technologies and infrastructure” (emphasis by the authors).

Why do companies from all over the world support an ambitious and stringent agreement to reduce global emissions? We suggest that they pursue sustainability marketing transformations from the “inside-out” by actively participating in public and political processes to change institutions in favour of sustainability. Why do they do so? For some the rationale is an ethical one. Many owners of family businesses and some managers feel a social obligation and want to be good citizens. For others there is a strategic rationale: A number of cases show that successful marketing of sustainable products and services is possible within the present institutional framework, but it is limited in width and depth (e.g. organic food products, renewable energies, electric cars, green buildings). Extending opportunities for the business means changing that framework. Sustainability pioneers and leaders can participate in enlightened self-interest by changing the public and political institutions to enhance sustainable development.

How did (does) this kind of change happen? Levy and Egan (2003) offer an insightful political analysis of the industry responses to climate change. They propose that (instead of an external shock or a critical incident) a number of relatively minor developments combined to open up some of the tensions and contradictions in the historical bloc opposing mandatory emissions reductions. They say that developments in one country or industry can disrupt the balance of forces elsewhere: Take, for example, the landmark speech given by John Brown (former CEO of British Petroleum) on 19 May 1997, acknowledging climate change and considering its policy dimensions. His speech triggered an internal reevaluation of strategy and increased external pressure to respond. In the following months many companies and associations started embracing the idea of ecological modernism and the win-win discourse (e.g. World Business Council for Sustainable Development and Business Council for Sustainable Energy). The growth of new organizations committed to climate compromise eventually led (leads) to a new emerging historical bloc, which is based on a reconfiguration of the alliances among firms, states, NGOs, and assorted professionals (e.g. The Climate Group). Business leaders have travelled a long way since the days of simply joining forces to deny the realities of climate change and lobbying to prevent governments from responding to it. However the battle for strategic advantage in the post-Copenhagen world is only just beginning.