Talking ’bout my (green) reputation

Perception vs. reality: how do brands like Walmart, Unilever, Levi's and Fairmont measure up?

It’s one thing to be an environmental leader, but it’s another thing entirely to be known as such by consumers. Companies like Levi Strauss, Fairmont Hotels, Unilever and Walmart have been implementing a broad range of green policies for years, and while some of them have received accolades for their efforts, it seems that in most cases, the public is largely unaware. According to the recent Planet Care study by Toronto-based market research consultancy Ifop North America, 43% of Canadians cannot identify a sustainable brand or company, while 20% cannot even identify a sustainable industry.
Why is that? A lack of consumer-facing communications could be blamed – but it’s not that simple. As most of these corporations explained, when it comes to communicating their greenness, they aren’t in the habit of shouting it from the rooftops. Communicating green doesn’t play by the same rules as pushing low prices or high quality – it’s a delicate dance that requires years, sometimes decades, of work at the back-end, making sure that you practice what you preach.

But as the public becomes more conscious of green issues, these corporations are ramping up their green marketing, and starting to change their reputations.

Strategy examined results from MapChange, a study commissioned by Vancouver green agency Change (now the Vancouver office of Elmhurst, IL.-based Maddock Douglas), in partnership with Climate Counts and Angus Reid Public Opinion, that examined over 90 North American corporations and surveyed over 2,000 people in the U.S., giving two scores out of 100 – one for the co’s actual climate change actions and one for the public’s opinion on them – and compared the two.

Strategy also commissioned its own poll with Toronto-based Delvinia, asking 1,000 Canadians how they rate certain brands in terms of their respect for the environment.

Read on to find out how these companies fare when it comes to their green reps and what they’re doing to improve them.

Unilever takes a big green step
Global CPG giant Unilever is leading the way in green in its industry. After implementing a greenhouse gas strategy in 2008 with the goal of reducing carbon dioxide emissions by 25% by 2012, the company has invested in more efficient technology, worked with Greenpeace on climate-friendly refrigerants and started the ‘Green IT’ program to reduce the impact of IT operations. Two years ago it embarked on consumer-facing water-saving program ‘Go Blue’ and commissioned the Water Attitudes Survey (see sidebar p. 15) – and that’s just scratching the surface.The company has resided at the top of the Dow Jones Sustainability Index since its inception, notes John Coyne, VP legal and corporate affairs for Unilever Canada.

‘It’s been part of our DNA since we started the company [over 100 years ago],’ says Coyne. ‘Sustainability is not something that just dropped into our laps 10 years ago. We had a founder who believed in sustainability. When you’ve got roots like that, you can take all those right decisions and move yourself in that space.’

Unilever scored high in actual action (79) in the MapChange study, but was below average in its perceived score (32), categorizing it as a ‘bashful’ company. Here in Canada, according to the Delvinia poll, nearly 60% of respondents were unsure how they would rate the company (29% scored them ‘average,’ 5.5% ‘very green’ and 5% ‘not very green’ with only 1% ‘not green at all’). But this perception, or lack thereof, may be changing soon.

Unilever’s global chief executive Paul Polman recently unveiled a new strategy to double the size of its business without increasing its environmental footprint. ‘It’s going to focus the entire enterprise and every single brand within [it] in that particular challenge, because we can’t have one without the other, and we must be successful in both areas,’ says Coyne. While it’s too early to gauge how that will translate in terms of campaigns, Coyne notes that Unilever will be upping the consumer-facing ante, citing as an example a commitment to the Rainforest Alliance, which promises that all tea will come from sustainable sources by 2015. ‘Some of that [activity] will ladder up to Unilever, and some of it will reside with just our tea brands such as Lipton.’

Coyne believes that a positive green reputation is more crucial than ever: ‘I suspect that will be one of the markers consumers use to make choices, and it will increasingly be so,’ he says. ‘In part because we’re making it that way because it’s the right thing to do, also because the world out there is making it happen as well. The Walmarts of this world are making it happen. We’re being measured constantly, and as soon as people start to measure things, you need to make sure that you’re not only on the scale, but you’re tipping at the top.’

Walmart goes public
The Walmarts of the world are indeed making it happen. When it comes to green, manager of corporate affairs for Walmart Canada Karin Campbell says the company has three long-term goals: to produce zero waste, to be powered by renewable energy and to sell products that sustain themselves and the environment – lofty goals to be sure, but if any retailer has the power to make it happen, it’s Walmart.

At the Walmart Canada Green Business Summit in Vancouver in February – a conference that brought together 300 executives, government officials and NGOs to discuss the business case for going green – the retailer announced several new initiatives to add to its already-long list of green programs. Among them was the Sustainable Product Index that will assess the sustainability of suppliers, create a database and scoring system and then develop a consumer tool that will help them identify how sustainable a product is.

It can be argued that Walmart has a big challenge in terms of reputation. It can’t be easy to be one of the biggest retailers in North America, selling goods at low prices and convincing people that you’re green while doing it. In the Delvinia poll, the majority voted Walmart average (47%) or very green (5%), but 21% rated the retailer ‘not very green,’ despite the company’s efforts.

‘Our customer-facing communication is in an evolution right now,’ says Campbell, noting that it’s still early to judge consumer perception since the focus thus far has been on changing sustainability within Walmart’s operations, with a focus on the consumer being the next step.

In the fall, Walmart did its own research into consumers’ green behaviour and found that while they’re engaged, there are three key barriers stopping them from doing more: the perceived high cost (69% said green products were too expensive); confusion about what the right choices are; and habit – recycling is still the top behaviour they refer to, because it’s what they’re used to doing.

‘When it comes to communication, we took those three barriers into consideration,’ says Jennifer Stahlke, director of field marketing, Walmart Canada. ‘It made the most sense for Walmart to be focusing on making green easy and affordable for our key target, which is
price-sensitive Canadians.’

Last month, Walmart launched a national green campaign that included its first consumer-facing TV ad about sustainable merchandise on offer, which features a man using several eco-friendly products with a voiceover explaining the green and price benefits. The campaign, created by AOR JWT, also included in-store materials, online ads and a presence on Walmart.ca.

‘Our sustainability reputation is in its infancy. We know we’ve made great strides, but we have many strides left to make,’ says Campbell. ‘That being said, we’re looking at our business every day through the sustainability lens…We serve over one million customers a day, and we have an incredible opportunity to make a real impact by changing their behaviour too.’

Levi’s labels itself green
How do you know a product is green? It can come down to a label on a pair of jeans, as is the case for Levi Strauss.

According to MapChange, while Levi’s scores above average on the ‘actual’ scale (58), its perceived eco-reputation is even better at 86 – far outscoring all other apparel companies studied, including Nike. You can chalk this positive rep up to a history of do-gooder behaviour and some little labels that could.
Levi’s has been active in the green space since the early ’90s, when it implemented global sourcing and operations guidelines that included setting maximum contaminant levels at manufacturing plants. Patti Johnson, country manager and brand director for Richmond Hill, ON.-based Levi’s Canada, also notes that Levi’s was a leader in terms of child-labour restrictions, working conditions and human rights – no doubt saving the brand from the negative press other apparel cos received when these became hot-button issues around Y2K.

Today, the green ethos pervades the company, down to the ‘Boot the Bottle’ anti-plastic water bottle campaign in Levi’s offices.
Canada is part of a region with the U.S. and South America, so programs created for that region or globally are implemented here with local applications. ‘Levi’s Eco’-branded jeans were introduced back in 2006, made primarily with organic cotton or recycled denim and distributed in recycled packaging. While no specific sales numbers were available, Johnson says that products with an eco-bent tend to do better in Canada than in the U.S. – especially on the West Coast.

Last year, Levi’s Canada partnered with Roots to sell its jeans in Roots stores. ‘We thought it would be a good idea to bring our Eco jeans to them because they shared the same philosophies,’ says Johnson. ‘You want a consumer to walk into a store like Roots and say, ‘Why is Levi’s here? Because they think the same way.” The partnership was supported with in-store material explaining the enviro-friendly nature of the jeans.

Levi’s also partnered with P&G brand Tide for a cross-promotion exclusively in Walmart stores in Canada last spring (it was introduced in fall ’08 in the U.S.), placing Tide’s Coldwater product in a display with Levi’s Signature jeans to remind consumers to wash their jeans in cold water to save energy.
In 2007, Levi’s did a third-party lifecycle assessment to determine the environmental impact of two of its best-selling products: 501 jeans and Dockers khakis. The results led to a consumer-facing push.

‘The most negative impact to the environment was at the cotton production stage and at the consumer-use stage,’ explains Johnson. On the cotton side, new strategies reduced the amount of water used, reduced pesticides and improved working conditions for farmers. Levi’s also joined the Better Cotton Alliance with companies like Ikea and Marks & Spencer to mobilize and consolidate buying power to influence the global cotton industry.

At the beginning of this year, the company reduced paper packaging on every product from three pieces to two and launched the ‘Care Tags for our Planet’ program in the U.S., which will roll out in Canada this summer. Enviro-friendly care instructions and suggestions like washing in cold water and donating old jeans to charity are put on every pair of jeans (Johnson notes that there are about 68 billion pounds of jeans in landfills in the U.S.).
‘Our research told us that consumers care about the planet, of course, but they’re not really open to paying more for organic unless they can get an intrinsic value,’ says Johnson. ‘That’s the rub – people have to understand that this isn’t just a fashionable thing to do, it’s necessary to restore the planet. You have to constantly talk to the consumer, and that’s why we did this dialogue with the care tags.’

No surprise, Johnson notes that the key to a great reputation is authenticity. ‘You have to assume consumers know much more than you think they do and that you don’t get into a spot where you’re greenwashing, because you’ll lose their loyalty forever,’ she says. ‘You have to back it up on all levels with consumers. You certainly wouldn’t want to talk green and then have a store that’s air conditioned so much that it’s freezing cold and have the doors wide open. You wouldn’t want to have an office building with the lights on all night long.’

While Levi’s has been successful with its in-store and on-product communications, Johnson says it’s not their style to shout out their enviro-bent in a big campaign, noting that there have been debates within the company that perhaps they should be more vocal about it. But, she says, ‘we don’t do it to get more sales, we do it because it’s the right thing to do. That sounds unbelievable, but I’ve been here a long time, and that’s what this company is about.’

Fairmont keeps it subtle
‘We have a very progressive green agenda,’ says Brian Richardson, VP brand marketing and communications at Fairmont Hotels. That’s putting it mildly.
Since introducing the first known green program across an entire hotel chain in 1990, Fairmont has been a casebook study in how to run a green business, literally writing the book on eco-hospitality with its Green Partnership Guide – a resource for companies looking to expand their eco-policies.

From organic waste diversion in its kitchens to energy-efficient lighting, to community projects involving endangered species conservation, there’s barely a touchpoint in Fairmont’s 60 hotels that hasn’t been greened. Last year, Fairmont joined the WWF Climate Savers program, committing to significantly reducing its carbon dioxide emissions.

Most recently, in March and April Fairmont chefs highlighted their favourite sustainable seafood entrees, encouraging diners to donate a dollar to the National Geographic Society. Other ‘green cuisine’ endeavours include removing endangered fish from the menu and purchasing local, organic and sustainable food items.

Fairmont has racked up awards year after year for its efforts – from the World Travel & Tourism Council, the Professional Convention Association and strategy’s very own Cause + Action awards (see this year’s winners on p. 31) – and according to the Delvinia poll, 0% said that Fairmont was not green at all. But 49% of respondents answered ‘not sure’ when asked how green the hotel chain was – reflecting the fact that Fairmont has thus far opted for more subtle, in-room messaging.

‘Sometimes I wonder if there’s a price to be paid for being as subtle as we are,’ says Richardson. ‘We believe generally that it’s the right approach…You’re never going to see a full-page ad in the Globe and Mail patting ourselves on the back about what we do, because we don’t think that will resonate with our customer.’

Fairmont is less subtle in its group-related business. Hosting over 5,000 meetings and conventions each year, usually acquired through an RFP process, Fairmont actively educates meeting planners about its ‘Eco-Meet’ program, which involves everything from paperless services to ‘disposal-free’ food services. It’s something that increasingly eco-conscious companies are looking for, sometimes meaning the difference between booking a meeting and losing it to the competition.

And Fairmont’s regular guests are starting to clue in. An annual environmental survey sent out to Fairmont’s President’s Club, which has over a million members, asked how familiar they are with the Green Partnership Program. ‘Within the last two years, we’ve seen the numbers really increase from guests being entirely unaware to vaguely familiar to, in the past year, over 20% very well aware,’ says Sarah Dayboll, manager of environmental affairs at Fairmont, also noting that in the last year over 53% of guests consider the environmental programming when deciding to stay at Fairmont – an increase of about 10%.

‘We do it because it’s the right thing to do, not because we want to exploit this from a commercial perspective,’ says Richardson, ‘but we do believe in the end it pays dividends because there are significant savings associated with what we do and also, increasingly, it is
starting to become a point of reference in purchase decisions…We are dealing with a guest today that expects us to be progressive in this area, and if we’re not, they might make alternative choices.’

Consumers: (not) practicing what they preach
While consumers think some brands are greener than they really are and vice versa, it turns out that they also tend to have dodgy self-awareness skills. According to Green Gap, a study commissioned by Cossette and Toronto eco-consultancy Summerhill Group last summer, there is a gap of as much as 40% between Canadian consumer self-perception and the real actions they take to help the environment.

When asked to rate themselves generally on areas such as fuel consumption, home energy and recycling, the respondents gave themselves an average score of three out of four or higher. But when asked about specific actions taken in these categories, the scores were much lower – a difference of 40% for fuel consumption, 20% for CPG certification and food & household items, 17% for home energy and recycling and 9% for reusing.

Similarly, in the third-annual Canadian Water Attitudes Study commissioned by RBC and Unilever, 78% of respondents believe they try reasonably hard to conserve water, but 44% leave the tap running while washing dishes and 29% don’t know what they pay for water.

So what does this discrepancy mean for brands? ‘For marketers, this gap is not simply a call-to-action to do more marketing and advertising about green initiatives,’ says Alma Obeid, marketing director at Summerhill, ‘but rather a call-to-action to find innovative ways to reach consumers in their homes, their workplaces [and] their social circles, make it simple to take that environmental action and empower them to proliferate that message to their neighbour, their coworker, their friend. That is what makes the action sustainable.’

 

The five Cs of sustainability branding
Maddock Douglas’s MapChange research and five years experience building green brands went into compliling “The 5 Cs of Sustainability Branding” – a tool that outlines how to do it right:

1. Competitive. To compete, brands must innovate – and the best new innovations tend to be sustainable. All other things being equal (price and quality = value), sustainability differentiates and provides durable competitive advantage.

2. Consumer-facing. Get the most benefit out of new sustainability initiatives by making them something the consumer will see. There are plenty of ways to improve corporate sustainability, but consumer-facing changes will have the most immediate impact on public perception and, potentially, financial performance.

3. Core. Tying sustainability to a brand’s core business is another way to ensure it resonates. If a brand sells hamburgers, its sustainability has to be about hamburgers, i.e. organic beef, recycled wrapper, etc. Car brands must focus on making more fuel-efficient, cleaner cars, not saving the rainforest. Don’t do something that is unrelated to what people know you for, or they won’t reward your efforts and you could be seen as greenwashing.

4. Conversational. Sustainability branding is more effective as a two-way conversation rather than one-way communication. Honesty and transparency will go a long way with consumers. Disclosing what you’re doing well and what you could be doing better will instill trust. And trust breeds loyalty. Inviting consumers to participate in a conversation about your process will further strengthen the brand-consumer relationship.

5. Credible. Sustainability strengthens brands. But, greenwashing, even if unintended, damages them. The good news is that it is easily avoidable, and the key is sequence. As long as sustainability efforts are in place, functioning and measurable before being announced, they will be viewed as credible. And proven, objective credibility paired with innovation and communication is the key to sustainable brand success.