Wednesday, 30 December 2009

Sustainability Marketing 2009

A Retrospective (or: A Personal Review)

The Twelfth Day is the last day of the traditional Twelve Days of Christmas which follow Christmas Day. It falls on 6 January (which happens to be Frank’s birthday!). In some countries like Ireland it has a particular significance, where it is known as Little Christmas (Nollaig Bheag). Our 'Little Christmas' present in 2009 was the submission of the final manuscript “Sustainability Marketing: A Global Perspective” to our publisher Wiley. After years of preparing, writing and re-writing the text book we finally made it! What a good feeling and a relief!

Retrospective Green Light. Photo by darkwood67. Reproduced under creative commons

The copy-editing and typesetting of the final manuscript was done by Thomson Digital in India. It is a good example for the globalization and digitalization of new product development. Sumit Shridhar read, and checked the manuscript for spelling, grammar, consistency between text and illustrations and between references and citation details. He did a marvelous job in ensuring that our book is complete, clear and consistent. Thank you! In April 2009 we did the final proofreading, so all the remaining mistakes in the book are faults of the authors. The official release was, by a happy coincidence, on World Environment Day in June 2009. How exciting to hold the book in our hands and teach on the basis of it! We would like to thank the Wiley team, namely Nicole Burnett, Celine Durand, and Georgia King for handling the entire production process smoothly. We are also grateful to Peter Hudson and Barbara Denuelle for their great efforts in marketing the text book and spreading the word – offline and online. All of you did a great job!

In September 2009 we received an email from the marketing department, informing us that the first print of the text book is almost sold out, making a reprint necessary. We are thrilled and happy to share the ideas on sustainability and marketing with others. We thank you, our readers from all over the world, for your trust and the interests you share with us. We are grateful to the lecturers who decide(d) to take up the text book for their courses in sustainability marketing, and related fields. We also thank the students, the future marketing decisions makers, who inspire us with their enthusiasm for the subject. Furthermore, we are indebted to the practitioners who provide us with both inspiration and content by helping to establish a new sustainability oriented marketing mainstream. There is at least a 'breeze' of change towards sustainability. Take the following examples:

- In 2009 Toyota launched the third generation of the Prius with more power and less emissions. Over the last decade Toyota sold more than a million hybrid cars.
- Electric cars make their way from the design stage to the market (e.g. Tesla Roadster, and the Mini Cooper by BMW)
- By 2009 Zipcar has become the world's largest car-sharing service, sharing 6,000 vehicles between 275,000 drivers in more than 50 North-American and British cities.
- Organic farming and food products continue to grow on a global scale – despite economic downturns.
- The Marine Stewardship Council celebrates 10 years of partnership and progress. Certified sustainable seafood gains significant and growing market shares world-wide.
- Energy-efficient houses become increasingly popular in Western Europe and North America (see our post in November 2009).
- Wal-Mart announces its worldwide sustainability initiative, helping create a more transparent supply chain, driving product innovation and ultimately providing their customers with information they need to assess products’ sustainability.
- The iPhone application “Good Guide” is launched allowing consumers instant access to environmental and social information on food and non-food products

To discuss these and other examples and to develop sustainability marketing further we decided to launch a blog in November 2009. It is new terrain for both of us and we are excited to get connected with you, our readers, and other bloggers interested in the area of sustainability and marketing. We do not see the blog as a monologue, but rather as a dialogue and we welcome your comments. We also see it as a collaborative endeavour. That is why we regularly invite guest posts from all over the world to our blog both from the scientific community and the management community. We are looking forward to different and critical perspectives, which enrich the theory and practice of sustainability marketing (see, for example, the post on the African perspective by Anayo Nkamnebe from Nigeria). We hope to move the agenda forward together with you and establish a new sustainability oriented mainstream in marketing. In this sense we wish all of you a good, peaceful and inspiring year 2010!

Frank and Ken.

Wednesday, 23 December 2009

Christmas fun and footprint

Christmas is a difficult time for those interested in a more sustainable lifestyle. As a festival it has a cultural richness and international diversity which is precious and worth preserving. In Northern countries it provides some cheer in the middle of the winter without which it could feel like very long and depressing wait for Spring (something the pre-Christian Pagans understood long before Christmas was invented!). It also provides a moment when there is a pause in the 24/7 world of work and business (at least for most of us), politics takes a break, and there is a time to focus on more important things like family and particularly on children.

The difficulties come with some of the downsides of Christmas where in many countries an originally religious festival has become largely overwhelmed by an orgy of material over-consumption and over-indulgence in food and drink (requiring even more consumption in the New Year with gym membership and equipment purchases to support that resolution to get back into shape). However, if you try suggesting having a more frugal Christmas in which we purchase and consume a little less, any non-green thinking family and friends will start referring to you as ‘The Grinch’ or worse. You can suggest a gift-giving amnesty amongst adult family members, but someone is bound to break the amnesty leading to panic buying of New Year presents to compensate.

The real problem with a sustainability marketing take on Christmas is that it is like watching a DVD of ‘A Christmas Carol’ in reverse. Ebenezer Scrooge is a man who loves and celebrates Christmas thoroughly, gives gifts liberally and ensures there’s a feast for all his friends and family. He’s then visited by nightmarish visions of Christmas present in which a relatively small proportion of the world’s consumers enjoy a lavish Christmas amidst expanding global poverty, and visions of future Christmas’s blighted by the consequences of climate change and global economic collapse brought about by our unsustainable past. Little wonder he ends the story tucked up quietly at home saving both energy and money by opting out of Christmas as a consumer festival.

So how to spread sustainable joy at Christmas, can be a real challenge for the sustainability enthusiast. We clearly aren’t the only people to worry about this issue – if you search Google for ‘Sustainable Christmas Ideas’ you get 1.2 million results. Many of these reference Bill McKinnon’s book ‘Hundred Dollar Holiday’ which aimed to let the American consumer have a fun Christmas without breaking the bank. Much of this involves a return to more traditional Christmas gifts and an emphasis on making rather than buying. In a post-Credit Crunch winter it may also become a guide to necessity rather than choices for many families. For the more hardcore sustainable lifestyle enthusiasts there is even the ‘Buy-nothing-Christmas’ movement which seeks to reinstate Christmas as a festival of doing and making rather than of purchasing.

So what are the top tips for a more sustainable Christmas season ? Beyond the obvious suggestion of choosing the types of ethical and sustainable products featured in the book, we’d suggest the following:

1. Regifting – give someone a serviceable item you own but don’t need anymore, that they might enjoy. CDs are an obvious candidate for regifting – just make sure you don’t give it back to the person who gave it to you last year (and of course Ebay represents regifting opportunities on a grander, more commercial scale);
2. Re-using – some products can have a second life as Christmas gifts. An odd assortment of once fashionable or functional clothes plus a battered old suitcase or trunk can become a magical dressing-up box for younger children;
3. Making – if you’re creative you can make, bake, sew or knit presents according to your talents. If you’re planning to give things like paintings as presents though, we would recommend getting you talent verified by a third party. Your Mother telling you that you paint beautifully doesn’t really count;
4. Give time not money – making involves giving a tangible product with your time embedded in it (rather than your cash), this is a concept you can extend by giving a loved one a voucher for your time. It could involve child minding for friends with young children, cooking a special meal for the family gourmet, computer troubleshooting for the technically challenged, or a voucher for a relaxing massage for your nearest and dearest. Just try not to mix them up.
5. Worthy cause gifts – if you feel there is expectation from family and friends that you spend money on them, an alternative is a charity gift of the sort that Oxfam have developed successfully. This can be tricky to use with younger family members. If you tell them ‘I bought you a goat for Christmas’ they will expect to find one under the tree struggling to get out of the wrapping paper, not several thousand miles away helping an African village.
6. Ask people what they want first – OK, you lose the element of surprise, but you also avoid getting back the present you give someone, a year later and the embarrassment of a regifting disaster.

Perhaps the best way to achieve a more sustainable Christmas is to take a ‘value added’ approach and think about how much fun any given component contributes compared to its environmental cost. In classic marketing strategy style, this conjures up a 2x2 matrix into which all of Christmas can be almost magically accommodated.

Show this to any family member who has attended a Business School or done any work with management consultants (or possibly ever been brainwashed by a religious cult) and they will instantly understand what you’re trying to achieve in devising strategies for a more sustainable Christmas. Some elements of Christmas may be difficult to locate in the matrix (like flying reindeer or drinks made involving advocat) but you can at least have fun coming up with ideas to move activities between boxes and to reduce the ecological footprint of Christmas, not the amount of fun to be had.

In the meantime, we wishing you a happy and relatively sustainable Christmas, and best wishes for a peaceful and rewarding 2010.

Frank and Ken.

Wednesday, 16 December 2009

Sustainable Consumption: African Perspectives and Challenges

Guest post by Anayo D. Nkamnebe, Nnamdi Azikiwe University (Nigeria)

From Green to Synthetic Consumption
Historically, African culture is closely knitted with nature and this is sufficiently evident from the production, consumption and disposal processes of the people. Examples include beast of burden for transportation, green foods fresh from the farm, fish and meat direct from their natural habitat, choice wine tapped from palm and raffia trees, cloths made from cotton, packages from green leaves and the list is endless. All these are environmentally friendly as their use and disposal enriches rather than deplete the environment. But within a flash, despite the highest concentration of world extreme poor in Africa, consumption pattern has suddenly changed from Africa’s green products to synthetic factory products of the West! This ranges from high CO2 emission used automobiles and ICTs to beverages and assorted synthetic brands. Indeed the list is endless, and Africa has helplessly become world’s dumping site for products that fail to meet the environmental requirements in the West. Unfortunately, the region lacks the technology and legislation to contain the fall-out of the new consumption culture.

The Sustainability Quagmire
Ordinarily, the domestication of Western consumption in Africa ought not to pose much problem if the system is completely adjusted to contain it. However, while the West has developed the technology and processes to manage wastes emanating from their consumption pattern through recycling, shift to green-technology, and legislation, most African countries are busy fighting poverty and exclusion. Africa therefore is caught in the web of choosing between surviving now at the expense of her future and sustainability at the expense of the present. Worst still, major players in the global market system are not showing serious commitment in helping to redress the environmental abuse on Africa caused by the new pattern of need satisfaction. The ridiculous complicated process in ratifying the Basel Convention and the increasing export of toxic and e-wastes from the developed countries to Africa are evidence of such apathy.

Sustainability Marketing Implications and Strategic Choices
Above reflections have far reaching implications for sustainability marketing, which calls for some strategic choices. The following are typical:
• As is evident, the developed countries are the major influencers in the globalised market through their marketing decisions. For sustainability to be truly global, such decisions must factor in the conditions in Africa and indeed other developing markets. One area that urgently requires this consideration is in the materials used for manufacturing products that are used in Africa. Using degradable packaging and casing material will go a long way in fostering sustainability in Africa since non-degradable materials pose untold economic and ecological challenges.
• Further, mainstream texts that address the issue of sustainability largely come from the West, yet, in writing such texts the sustainability conditions in Africa are hardly given any serious consideration and provision. Ironically these texts are used for learning in African schools; a case of square pegs in round holes. Scholars in the West and their Africa based counterparts should collaborate in this regard to produce context-relevant materials for teaching and learning sustainability in African institutions.
• Due to the impacts of combined conditions (economic, technology, social, political etc) in Africa, sustainability marketing is yet to receive serious attention in Africa. African governments, scholars, organisations/practitioners and consumers must take resolute decision to revert to and foster sustainability orientation, which before now is dominant feature of the African consumption culture.
• Perhaps, most importantly is for Africa to enthrone structures and processes that can guarantee sustainability and work in partnership rather than dependence to attain the desired goals.

Africa’s Sustainability Response
At present, Africa's efforts in the region to tackle sustainability issues are still trivial. Small scale recycling of wastes from consumption and disposal is on the increase for metal and plastics, though at slow pace. With metal and plastic scrap hunters incresing, the hitherto environmental danger posed by the disposed materials are gradually receding and at the same time providing the poor with means of livelihood.

Photo by African Development Foundation. Reproduced unter creative commons.

Wednesday, 9 December 2009

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.

Wednesday, 2 December 2009

Just Hot Air? Carbon offsetting by airline companies

The biennial award ceremonies of Beyond Grey Pinstripes (BGP) initiative organized by Aspen Institute have become the highlight of my academic year. This is a unique event gathering together the colleagues around the globe dedicated to the same mission. While many MBA rankings exist, only one, the BGP, looks beyond reputation and test scores to measure something much more important: how well schools are preparing their students for the environmental, social and ethical complexities of modern-day business. The School of Business and Economics of the University of Jyväskylä has participated in the BGP survey since 2001. We have been honored to be recognized on this list ever since we first made the decision to join. Every time it has been an effort to participate in an 18 month evaluation to map the landscape of teaching and research on issues pertaining to business and society. But we have had no doubt considering it worth while. And so have done other 148 business schools from 24 countries this year. “The schools that are competitive in the Beyond Grey Pinstripes ranking are the real trailblazers - they assure that students have the right skill as well as the will to make things happen”, says Judith Samuelson, Executive Director of the Aspen Institute’s Business and Society Program. This year, the BGP award ceremonies took place in New York in early November. While flying to New York, I was reading the Finnair Blue Wings magazine, which had an interesting editor's letter about carbon offsetting of air travelling.

The main argument put forward by Christer Hugland (Senior Vice President Public Affairs and Coroporate Communications) is that airlines schould reduce their emissions instead of offering carbon offsetting schemes to their customers when buying an airline ticket. The provoking text made me think twice about some interesting questions and the challenges airlines face when pursuing (or at least trying to pursue) an active and credible approach to environmental management and marketing.

The first question is, whether carbon offsetting schemes offered by airlines to its customers is really greenwashing as Christer Haglund claims. He thinks that it is more important to invest in modern low-emission fleets rather than cooperating with carbon offset schemes. That is a strategic decision Finnair hast taken. It is clearly a major communication challenge for a company, which has decided to take another path than (most of) their competitors do, to convince their customers of the rationale and acceptability of their choices.

Another challenge for airlines is also mentioned in Haglund’s text. That is to promote their environmental goals to political decision making, e.g. the Copenhagen climate conference about to start in a few days. This led me to think about the Sustainability Marketing book and the inside-out perspective to transforming markets as a possible strategy for sustainability marketing (see chapter 11).

More environmental management and marketing challenges for airlines are mentioned in Haglund’s piece, such as promoting direct flights and efficient air traffic management in order to avoid keeping aircraft in holding over airports. And there would be many more to add to this list. Reducing the weight on board and using proper landing procedures are examples of improvements the airline companies have direct control over. Development of alternative renewable fuels in cooperation with researchers and energy sector is certainly a crucial issue for air traffic. Looking at the flight service from the life cycle perspective also requires optimizing the related ground transportation (how to get to airport, preferably by public transportation, and promoting that).

Well, it would be interesting to see some comments on this blog to the original question, if carbon offsetting offered by an airline to its customers is greenwashing or not. Personally, during my thoughts over Atlantic, I could not settle for any definite stand on this. What do you think about it?

Photo by Antti Havukainen. Reproduced unter creative commons.