Wednesday, 25 November 2009

Writing Forward the Future

Why is Bernard Madoff so reviled? It seems like a pretty easy question to answer. Whilst, giving every appearance of respectability as a former Chairman of the NASDAQ stock exchange, he ran a 'Ponzi' scheme during the nineteen nineties and the noughties. This scheme allowed his investment company to pay out apparently exceptional returns to investors. It did this by using the money from the newest investors to pay out generous returns to more longstanding investors, instead of paying out the 'real' returns from their investment. In all some $18 billion dollars of investor money is missing, but in broad terms the early half of his investors are still net 'winners', it is the newest half of his investors who are very much the losers. Perhaps what makes Madoff so disliked, is the way he encouraged many charitable organizations including hospitals and Stephen Spielberg’s Wunderkinder Foundation into his scheme, only to impoverish them. Tricking money out of the sick and from disadvantaged children has never been a good way of making friends.

Yes, it’s easy to see why the whole world loathes Bernard Madoff, and the newspapers have enjoyed the spectacle of the trappings of his lavish lifestyle being auctioned off to the highest bidder while he languishes in jail. Except that, if you think about ecological wealth rather than financial wealth, you realize that, like Madoff, we have all been (and still are!) complicit in a giant Ponzi scheme for decades!

Madoff’s scam worked by paying out an unsustainable return on investment to his early investors by exploiting and destroying the financial capital of the later investors. The industrialized consumer societies throughout the world operate by paying out an unsustainable return, in terms of material standard of living, to the current population of consumers. In doing so, it eats into and degrades the natural capital of the planet, thereby ensuring that the available quality of life returns for future generations will be reduced. The economists will probably grumble that this ignores the possibility of technological innovations improving future ecological efficiency or restoring the productive capacity of ecosystems. With nearly 3 billion new guests forecast to join the planet party over the next 40 years, this seems an optimistic view. We would bet that in the early days of Madoff’s scheme he was also convinced that some investment wizardry and a few lucky breaks would even things out and put his company back on an honest footing.

Like it or not, we are all part of an Ecological Ponzi Scheme. The difference is that Madoff’s longstanding investors were blissfully ignorant that they were prospering at the expense of others who didn’t deserve to lose their money. For the politicians, voters and consumers who are so keen to get back to a 'business as usual' scenario of economic growth, there is no such excuse. We may prosper in the short term, but only at the expense of those to come, unless we can redirect consumer lifestyles, business strategies, and economic policies towards the pursuit of more sustainable development.

Meeting this challenge is a theme that recurs throughout the pages of Sustainability Marketing and is a key motivation behind our efforts to make a sustainability perspective part of a new mainstream for marketing. We need more realistic consumer and investor expectations that don’t pressure companies into trying to deliver exceptional but short-term and unsustainable performance. We also need to connect the rights of consumers and their opportunities for consumption to the responsibility they bear in determining the consumption opportunities and quality of life of future consumers. Everybody wants to prosper but prosperity feels less sweet when you know it comes at someone else’s expense.

Photo by U.S. Department of Justice. Reproduced under creative commons licence

Wednesday, 18 November 2009

Marketing of Green Buildings

Past - Present - Future

Green Buildings, which are energy-efficient and which make use of renewable resources like solar energy becoming increasingly popular in Western Europe. One of the reasons for the growing acceptance and diffusion of green buildings is their marketing by innovative construction companies – aside from legal requirements, political support, rising oil prices, and ongoing discussion about climate change. What does the successful marketing of green buildings look like? What are the critical factors?

In the past the marketing of green buildings suffered from “green marketing myopia”: As the energy-efficient houses were still in an experimental stage, they were outright expensive, and difficult to obtain. The main arguments in favour of them were based on ethics (“taking care of future generations”), ecology, and energy savings. Since the turn of the century the marketing of green buildings has advanced a lot in Western European countries. Innovative construction companies are succeeding with new marketing concepts, by putting the four “Cs” into action (customer solution, customer cost, communication, and convenience).

Photo courtesy of Active Suncube

Take, for example, 81Fünf Holzbau founded 1996 in Germany. It is a fast growing company focussing on energy-efficient wooden houses. Depending on the price-sensitivity and environmental consciousness of their target groups they offer three different kinds of solutions: “Value added” energy-efficient houses offering “more for less”, eco-houses with very high levels of energy efficiency, and “effi climate houses” which meet the highest standards for passive houses. The prefabricated wooden elements allow for high quality offered at low cost in the planning and building process. The latest innovation, the “effi climate houses” is offered in co-operation with Landessparkasse (LBS), the largest building society in Germany with millions of customers. In communications the high-quality levels and comfort on offer, the healthy indoor environment created by using natural woods, energy savings and security from future oil price rises are all emphasised, creating “motive alliances” by aligning ecology with conventional decision criteria. The interactive online toolkit “Energy Comfort House” allows potential customer to create their own passive house and easily calculate the life cycle cost and savings as compared to conventional houses.

Although there is a renaissance of wooden houses (due to the naturalness factor, the inexpensive price, and the high quality of wooden house fabrication), it is still a relatively small market segment. The majority of Western European houses are concrete based. Active Suncube is a young and dynamic construction company focussing entirely on passive houses built out of concrete as a cube. The company is convinced that this be the new standard by 2020. By entering this growing market at an early stage they are seeking a first mover advantage. The company provides customer solutions by: offering modern, aesthetically pleasing houses, extensive consulting, and financial services (taking lifecycle costs of the buildings into account). The name of the company has positive connotations like “active” and “sun”. One of the slogans on their webpage is “the new lust for living” showing a beautiful woman exposed by (sun) light. In communications new media like Youtube videos are used to reach out to potential customers.
In the future it is safe to assume that green buildings will show further grow, eventually setting the standards for new buildings. In addition to that, old buildings are being required to increase their energy-efficiency. There is a growing market segment for ecological modernization within the Western European construction market. A new frontier will be buildings as a key to delivering decentralised energy systems, as they become highly energy-efficient and able to make use of renewable energies.

The post is based on a speech given by Frank for the Canada Green Building Council – Greater Toronto Chapter and the Institute for Research in Innovation and Sustainability at York University on November 19, 2009 in Toronto.

Wednesday, 11 November 2009

Look Back in Puzzlement

Our 20 Years of Sustainability and Marketing

It is exactly twenty years ago that Ken first wrote something that tried to bring the world of marketing and the concept of sustainability together. In 1989 he submitted a paper 'Painting Marketing Education Green' for the Marketing Education Group Conference (which later became the UK Academy of Marketing Conference). Despite being relatively simplistic, descriptive and naïve it got a remarkable reception. This was partly we suspect because it was one of the earliest contributions to the post-Brundtland ‘Second Wave’ of sustainability marketing writing (the ‘First Wave’ having arrived in the mid-1970s in the wake of the publication of books like ‘The Limits to Growth’ and ‘The Population Bomb’).

The conference session at which it was delivered was packed out, and later on the paper was chosen for the special issue of Journal of Marketing Management dedicated to the conference and published in 1990. On the back of it Ken was offered his first book contract to write a (very basic) M&E Handbook on Green Marketing for Pitman, and it really looked like that would be the future colour of the world of marketing. Only a year later however, this optimism looked misplaced. When Ken came to deliver a (better) follow-up paper at the 1990 MEG conference, the audience largely made a rush for the exits. The initial curiosity about the sustainability agenda and what it meant for marketers seemed to have fizzled out. In the commercial marketing press the commentators had got to grips with sustainability and environmental concern, deciding it was just one of many facets of the modern world that the marketing strategist had to factor into their thinking. It was like globalization, market fragmentation, the evolution of e-commerce or the emergence of China. Just another fact of marketing life - nothing more, nothing less. The idea, that sustainability would require a different way of thinking about marketing simply didn’t seem to resonate. The colleagues who had humoured Ken by listening politely and patiently to his ideas about sustainability and marketing began asking when he was going to get back to some ‘proper research’. He persevered by publishing the teaching-orientated text ‘Environmental Marketing Management’ in 1995, but the courses about marketing and sustainability which the publishers had been expecting to have emerged by the mid 1990s simply didn’t exist. Old thinking and conventional teaching continued to dominate. At best a lecture on sustainability was tacked onto the syllabus of the more progressive marketing courses, resulting in many invitations to provide a guest lecture towards their end.

It is almost twenty years ago that Frank started his PhD thesis ‘Ecology and Competitiveness in the Food Industry’, particularly focusing on ecological innovations and ecological marketing. Later on, as assistant and associate professor at the University of St. Gallen he kept on doing research in this area – despite the rollback of eco-marketing in theory and practice (which is well documented in ‘Marketing and the Natural Environment’ by Andrew Crane). By the end of the 1990s shareholder thinking and the internet boom was predominant. The ‘virtual world’ of money and digital bits and bytes ignored the ‘real world’ behind products and services.

Fast forward another 10 years to 2009, and suddenly the world looks very different. Its leaders are about to wrestle with the urgent threat of disruptive climate change and how to respond to it at the summit in Copenhagen, but are hampered by global financial weakness and massive public sector debts produced by the unsustainable nature of the debt-fuelled growth of recent years. The search is suddenly on for alternative technologies, new business models and innovative management thinking to deliver new jobs and a ‘greener’ and more sustainable economy for the future.

This new challenging future has been reflected in the reception for ‘Sustainability Marketing’ where enquiries are coming in from all over the world about it, and where less than three months after its publication the first reprint was required. Some of those enquiries are from people establishing new types of courses linking sustainability to marketing, design or management more broadly. We are thrilled to be part of the change towards a more sustainable future and establishing a new sustainability oriented marketing mainstream! What do you think: Is the ‘Third Wave’ of sustainability marketing literature going to last or will it fade like the ‘First and Second Waves’? Please, send us your comments!

Photo by David Sifry. Reproduced under creative commons license.

Thursday, 5 November 2009

How It all Began

The Genesis of the text book „Sustainability Marketing“

It was in the year 2000, when Frank was invited by his colleague Hanna-Leena Pesonen to give a masters course in Eco-Marketing at the University of Jyväskylä (School of Business and Economics) in Finland, that he began playing around with the idea of writing an international text book on sustainability marketing. It took him a couple of years to get it started (for a number of reasons including dating his future wife Mirjam) and in 2006 he sent a book proposal to several international publishers, including the rationale and outline of the book, its market potential, and a sample chapter. Right from the beginning Wiley was interested in the book proposal and asked ten evaluators from all over the world to give feedback to the project. Generally, the project was well received and constructive feedback was given. In mid February 2007 the Wiley marketing department decided to give it a go (a couple of days after the release of the Fourth Assessment Report by the Intergovernmental Panel of Climate Change). They categorised the book as a “slow burner” with the potential of solid sales and organic growth in the future. As the project became real Frank asked Ken to join him in the endeavour. Ken has already published two books on green marketing (1992) and environmental marketing management (1995) respectively. After that he had solemnly promised his wife that he would never write another book. He was able to get around the promise, because writing half a (text) book does not really count! (or at least that’s what he tried to claim when she found out about three months before we completed it). The contract between Wiley and the two authors was signed in the summer of 2007 promising to deliver the final manuscript in the following year.

Then the hard work began. We agreed on the structure of the book and split up the chapters between the two of us. Each chapter was limited to approximately 6,000-8,000 words, including learning objectives, previews, sustainability marketing stories, concepts, illustrating examples, key words, review and discussion questions, as well as sustainability marketing challenges. Once the first draft was written, each passed it on to the other and vice versa. A creative writing process began, exchanging first ideas, discussing them further and creating prototypes. It was a truly inspirational experience, made possible by the internet. It is amazing, but we neither met personally nor did we talk over the phone during the entire writing process. And although we both live in Europe and thus in the same time zone, we almost worked non-stop on the text book for a few months: Whereas Frank is an “early bird”, starting writing at six o’clock in the morning, Ken worked the “night shift”, getting creative in the late evening. At the end of 2008 we finally made it. The last chapter was written and submitted to Wiley for layout and production. (In Ken’s case his last chapter amendments were completed over four nights in a hotel bar during an International Sustainability Conference after even the bar staff had gone to bed!) .

A matter of discussion was the first version of the title cover, as proposed by the Wiley designer. Although the design was both technically clever and aesthetically pleasing, we as authors were not convinced it carried the right message. From our point of view the original version fulfils every cliché of an alternative kind of exotic sustainability marketing as opposed to our vision of establishing a new sustainability oriented mainstream of marketing! As you can see on the right hand side, the final title cover looks utterly different. What do you think about the old and new versions of the title cover? Please, send us your comments!