Integrating sustainability into the technology sector is like trying to drive an eighteen-wheeler down a dark alley. The industry's carbon footprint is gargantuan, with a monstrous appetite for energy and a supply chain that spans continents.
Nevertheless, tech companies know that customers are demanding energy efficiency and tech companies that want to remain competitive will have to deliver it. Technology companies that are jumping on the ecological bandwagon are finding that progress is a bumpy road: Progress happens in fits and starts as they try to determine which path will lead them to the green Holy Grail.
According to a new study just completed by Strategic Oxygen, a marketing intelligence firm that counsels high-tech companies, all technology companies are struggling with similar challenges to sustainability, but only a few are really pulling ahead as masters in the art of green branding.
To compete in the serious sport of environmental posturing, many tech companies declare green manifestos and adopt stopgap sustainability measures to diminish public criticism and gain consumer support. Yet, for Michael Gale, head of Strategic Oxygen, technology companies haven't taken sustainability seriously enough.
"I often see dichotomies between what tech companies are saying in support of their environmental efforts as opposed to what they are doing," Gale said. "Since tech brands are some of the worst culprits -- given what is used to make the stuff -- I felt that they could do more."
After all, the power that business wields in terms of global sustainability is significant. In January 2007, the executive secretary of the U.N. Framework Convention on Climate Change revealed that 52 of the 100 most powerful economies in the world are companies, not countries. In other words, the collective impact that such companies represent is akin to a continent.
Consumers are paying more attention to the socially responsible works of corporations, as well. An article in the Wall Street Journal, "Does Being Ethical Pay?", found that consumers were willing to pay more for ethical goods than unethical ones or ones about which they had no information.
The Carbon Trust, a United Kingdom government-funded independent company that helps businesses and the public sector cut carbon emissions, predicts that by 2010 the U.K. consumer market will reach a tipping point, leading consumers to consider climate change mitigation as a factor in most purchasing decisions. Michael Gale believes the U.S. consumer market is similarly poised.
Seeking to support corporate sustainability and leverage his firm's knowledge of tech and branding, Gale found an ingenious way to toe the environmental line by connecting the company's expertise -- marketing and branding -- with green.
"The method of marketing has often been far more art than science," Gale said. "We believe that the application of more science to the decisions about how and to whom to target with marketing communications will generate more rational support to build green budgets and green programs."
Using its own seed money, Strategic in February polled some 3,500 buyers and sellers of technology in more than 10 technology markets about their views on green. Most of the results are regional in nature and consumer-oriented. Few market studies examine B2B considerations or reflect on ramifications for companies looking for global direction on the sustainability stage. For these reasons, business leaders should take note of Strategic Oxygen's international findings.
These B2B technology influencers included IT professional managers, CIO's, CXOs and business managers across several economic sectors from companies like Dell, IBM, Apple, Hewlett-Packard and others from around the world. They answered questions about which tech brands they considered green and which should be in the future, what kind of premiums they would pay for green, especially if ROI could be assured, and what barriers they faced with adopting green. For this survey green technology was defined as including efficient power consumption, recyclable/reusable packaging, recycling offers for older equipment, use of non-toxic materials, or making investments in future green concepts, such as alternative materials.
Of the 24 brands evaluated in the U.S., the green light shines first on Hewlett-Packard, then Dell, IBM and Apple.
Business managers view these brands as leaders in the global sustainability movement and they expect for them to stay true to green in the future. Regional differences played a role in survey results, as evidenced by reponses from Japan. There, Japanese companies Fujitsu, Sony, Toshiba and NEC are seen as the top green tech brands, while American respondents placed those companies much lower in the ranking.
Tod Arbogast, director of sustainable business at Dell, said he was pleased upon reviewing these results, since the company has devoted considerable attention to achieving sustainability goals since 2000. For instance, in 2006, Dell committed to offering consumers no-charge recycling for any Dell-branded product at any time anywhere in the world. Dell also adopted the stringent requirements of the European Union's Restriction on the use of Hazardous Substances (RoHS) directive globally and its chemical use policy is set to eliminate the use of brominated flame retardants and polyvinyl chloride from product design by 2009.
"It is studies like these that reaffirm the commitment we made to lead efforts toward greener technology," Arbogast said. "It also reinforces our commitment to be the greenest technology company on the planet. The study demonstrates greater public and corporate awareness, which can only accomplish the objective we all share -- a greener and more sustainable environment."
There is no global perspective but many business managers expect to pay a premium for green, especially if increased ROI can be shown. It often depends on the geographical location and culture: For instance, business managers in rapidly developing India place high importance on products from brands perceived as green. Not only do these Indian technology influencers (buyers and sellers) prefer eco-friendly brands but they anticipate paying a premium for such products. In India, nearly 60 percent of its business managers would definitely buy green if the ROI was proven, while almost the same amount expected to pay at least a 5 percent premium.
By contrast, Japanese business leaders do not expect to pay a premium, even if it could be shown that their company's ROI would be improved by using brands committed to sustainability. Thus, building green marketing could be an asset in some markets but a cost of entry into others, with limited fiscal returns.
Look to the business managers (CXO, department managers or occasionally the CIO) when it comes to B2B purchasers wanting committed tech companies and brands. These individuals are the most environmentally enlightened and will purchase those products from sustainable brands. Unfortunately, IT management appears to be the least convinced of the benefits of purchasing products committed to sustainability. Only IT managers from Mexico preferred green tech products: Again, regionalism plays a significant role.
Communicating a company's efforts toward social responsibility may be a product of economics as some regions are open to green while others are not. Depending on which B2B market, a company may think twice between spending significant amount of its marketing budget if the targeted region is not open to hearing such communications.
Finally, with B2B, truth really matters. Lip service to green does not hack it with business-to-business buyers. To really deliver on the promise, tech corporations need to get internal buy-in. Even though premium price expectations exist, they may not be open to all of companies, especially if promises are shallow.
The Bottom Line
Greening technology brands is a delicate balancing act. In charting a green course, it is important to understand where a company's brand is internationally, what market a company wants to target, and how much of a premium that market expects to pay as a "green tax" for adoption.
Having a great green product offering that nobody knows about or believes in can end up creating waste rather than reducing it. Yet, having a proposition with no weight behind it, especially a brand that is expected to deliver green but does not, can compromise brands in the long run.
The greening of technology brands requires skillful mapping and foresight, but judging from the success of brands like HP and Dell, it is a road that can be successfully navigated by strategic thinking.
Anna Clark is president of EarthPeople, a consulting firm that helps companies of all sizes save money and bolster their brand through the leading-edge principle of sustainability.