No more greenwashing: How to tell your story right
<p>Companies that send the wrong message on sustainability, or where departments don't talk to one another, can see customer trust and brand equity damaged.</p>
This is the second in a three-part series on how companies communicate their stance on sustainability through different channels, and what effect that can have on their reputations and bottom lines.
Despite the emotional and political sensitivity of corporate environmental programs, many leaders overlook the risks associated with misalignment around sustainability actions and communications. As discussed in last week’s article, “How to align your message, avoid risk,” lack of alignment around sustainability can have material impacts on customer trust, brand equity, and your ability to get the most out of existing sustainability investments.
This article describes examples of business functions that often engage in sustainability messaging -- through traditional communications or actions -- and where internal alignment is especially critical:
Marketing and Sales
Gone are the days when companies could simply market their product as “green” and expect a conscientious shopper to trust that it was somehow better for the environment.
Despite mainstream awareness of “greenwashing,” we continue to see this risky behavior manifested as a result of uncoordinated actions across company departments. The last year has seen a slew of lawsuits over the credibility of questionable "green" claims: ConAgra, for instance, was sued for using the term “natural” on its GMO foods, and SC Johnson was challenged in court over its "Greenlist" logo.
Despite this, it is surprising how often (as consultants working with large companies on their sustainability programs) we come across rogue marketing departments, who are hard at work on “green” marketing, without full alignment and buy in from the sustainability team or department.
A technology firm, for instance, recently approached GreenOrder to develop a cohesive sustainability strategy that could serve as a revenue growth platform. Initial discussions uncovered that its marketing department had attached “green” labels to products without consulting those in procurement, product design, or strategy. Sales representatives were also surprised to learn that their products already had green attributes, and sought guidance on what to say to customers when pitching their products against the competition. The company is now pausing to align their sustainability actions and is working across functions to develop sustainability goals as they think about their next set of initiatives.
Your marketing and sales teams may be the most direct line to your customers, but internal alignment is critical to protect existing sustainability initiatives and develop growth opportunities from achievements in sustainability.
External messaging on sustainability from your CEO must be as deliberate and thoughtful as messaging from your marketing department. Your CEO is the public face of your company, and like any celebrity, people are watching, and scrutinizing, his or her every move. It is critical that CEO messages are backed up by strong actions.
In the accompanying matrix, the X (horizontal) axis represents how much you're doing, and the Y (vertical) axis represents how much you're saying. Here's how it breaks down:
Competitive Advantage: The CEO who is vocal on sustainability issues, with a strong sustainability program to back up his or her statements, is setting the company up for reputational success. In announcing his company’s Sustainable Living Plan, Paul Polman of Unilever said: “We cannot choose between economic growth and sustainability; we must have both.” Paul Polman talks the talk and walks the walk.
Safe but Stagnant: The CEO whose company hasn’t done much on sustainability, but remains largely mute about the issue, is safe for now, but only as safe as an ostrich with its head buried in the ground. Regulation and consumer demands will catch up to his or her business soon enough. These CEOs must start defining a sustainability vision for their company, or risk falling behind.
Now come the quadrants of material concern.
Missed Opportunity: The CEO who doesn’t communicate his company’s sustainability programs is selling his or her company short. Interbrand’s ranking of top global green brands measures both perception of a company’s sustainability and actual performance on sustainability. Interbrand scored several companies, including L’Oreal, Nokia, and HSBC, significantly higher in performance than perception, concluding they “are not yet communicating their efforts to consumers as clearly as they could. … Nokia [for instance] could be using its green activities to create meaningful connections with customers, as it continues to struggle with finding relevance in an increasingly competitive market.” The CEO must realize that he or she can be an effective mouthpiece.
Reputational Risk: The CEO who overpromises and under-delivers on sustainability could be putting his or her company’s reputation at risk. In the early 2000s, for instance, Bill Ford set some big environmental goals for his company, such as improving the fuel efficiency of Ford SUVs by 25 percent by 2005, with a 2000 baseline. The company failed to meet those goals, and suffered a period of bad reputation before turning the tide to become leaders in the industry.
The takeaway here is that the CEO’s sustainability messaging can represent a reputational risk, but creates an immense opportunity for reputation-building when done right. The CEO should align with the sustainability/CSR arm of the company to craft a concrete sustainability vision for the company, and he or she can play a pivotal role in the dissemination of that vision.
Some firms may hide behind the veneer of their industry association while pushing for anti-environment policies. This is risky, as demands to lift the curtain on cloaked organizations have reached a fever pitch. We are watching this play out right now as increasingly influential superPACs spur demands for transparency (e.g., DISCLOSE Act) and investigations.
As a recent example of companies fighting environmental policies via industry associations, GreenBiz’s Joel Makower describes how the plastics industry challenged the LEED building rating system in favor of a system that is less stringent and more business-friendly. The attack is led by a coalition of industry associations, including the US Chamber of Commerce, The American Chemistry Council, and the National Association of Manufacturers. Makower says, “It's important to note that the chemical industry is doing itself a disservice here. Many of its biggest members … are actively engaged in green chemistry, designing products and materials that eliminate many of these offensive toxins. For these companies' trade groups to simultaneously defend these problematic chemicals seems a desperate, archaic act.”
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An efficient company sings with one voice -- not only on sustainability, but also across all of its investments and strategies. This fosters confidence with investors, customers, and employees. Next week’s article will provide a practical checklist for executives looking to align sustainability actions, commitments, and communications across their organization.