Doing good - and earning well from it
Eco-marketing—advertisements and PR campaigns that highlight companies' environmental awareness and ethical behavior—is all the rage in U.S. marketing.
Eco-marketing ads and PR campaigns extolling environmental awareness and ethical corporate behavior are all the rage in US marketing. Not a week goes by without a new eco-campaign or conservation campaign being launched. Large corporations such as Wal-Mart, FedEx and Procter & Gamble are at the forefront. One of the most recent projects that stands out for its sheer volume is a 20 billion dollar initiative by Bank of America, the largest US financial institution. The aim of this initiative is to initiate environmentally friendly business projects over the next ten years and thus raise awareness of climate change. "The initiative is outstanding because Bank of America can do good business and at the same time link it to an excellent PR campaign," says Jacquelyn Ottman, business consultant and author of the book "Green Marketing". And in her opinion, this is precisely the reason why so many companies are jumping on the eco bandwagon. "It's not only good for a company's image, but also for their business."
The new campaign by building materials company Home Depot, which a few weeks ago became the first retail group to introduce its own green label called "Eco Options", is similarly innovative. More than 2,500 environmentally friendly products, such as low-irritant insect spray or organic peat, are awarded this label. Among other things, the company is responding to the growing trend towards ecological construction.
Yet it was only a few years ago that global corporations such as Nike, the Gap and Chiquita made negative headlines due to unethical business practices, such as child labor in third world countries. Since then, all three companies have publicly discussed their problems, revised their methods and are now among the US corporations that are considered role models in the field of corporate social responsibility (CSR) - the corporate sector that deals with the ethical issues of business and encompasses areas such as employee rights, philanthropy and environmentally friendly production. "In the past, it was quality that set brands apart. Today, it's a company's reputation," says Bradley Googins, Director of the Boston College Center for Corporate Citizenship. "Customers, as well as employees, now expect more from a company in this regard." The target group for these efforts at consumer level is the so-called "Lifestyle of Health and Sustainability" (Lohas) segment, a population group of around 50 million in the USA that attaches great importance to the environment, human rights and health in its purchasing decisions.
Some companies began setting up community relations departments back in the 1990s, often for the benefit of the company's immediate local community. But corporate efforts to communicate these activities to the outside world have skyrocketed in the past year, says Jay Whitehead, CEO of business magazine The CRO. "The magazine was founded in the same year that companies such as General Electric, BP, Toyota and Ecolab began to move away from defensive communications practices in 2006 and aggressively invest money in CSR to sell more products, attract capital and recruit talented employees." According to Whitehead, a total of 31.7 billion dollars was spent on CSR in 2006 alone.
However, industry observers also believe that as consumers become more environmentally aware, skepticism about the truthfulness of such campaigns will grow. For example, the "Ecomagination" campaign launched by General Electric (GE) back in 2005, which promoted the use of environmentally friendly energy, was long regarded as a model for convincing green advertising. But not all green marketers are convinced, as GE has not only produced more energy-efficient locomotives since then, but has also lobbied to thwart planned new government smog regulations. "GE is going against its own principles," says BJ Cook, Director at the eco-marketing agency Digital Telepathy, who points out that this is hardly discussed in public. "They wanted to capitalize on it first and foremost, and they did that by creating brand awareness among customers."
Gerti Schön, New York
"CSR is integrated everywhere"
Stanley Litow,
responsible for Corporate Social Responsibility at IBM, talks about ecology as a marketing tool.
WW: How can CSR be integrated into a successful marketing and communication strategy?
Stanley Litow: First and foremost, you communicate your principles to customers and business partners. We operate a 47 billion dollar supply chain, these are companies that work with us on a regular basis. There is a code of conduct for these companies that not only includes our CSR practices, but also what we expect from our partners. CSR is integrated into all our activities, our marketing, our advertising, our customer relations, our employee policies and business relationships.
WW: How credible can a company be that constantly praises itself?
SL: It's important to involve third parties rather than going it alone. IBM, for example, has started a network to promote technology for humanitarian purposes, and many organizations have reported on it. We leave it to others to praise our progress.
WW: What is the key to a successful CSR policy?
SL: You need the right content. You can't take bad balance sheets and then try to sell them as something positive, that would be like putting lipstick on a bulldog. People aren't stupid, they realize when you're trying to soap them up.
Interview Gerti Schön
The new campaign by building materials company Home Depot, which a few weeks ago became the first retail group to introduce its own green label called "Eco Options", is similarly innovative. More than 2,500 environmentally friendly products, such as low-irritant insect spray or organic peat, are awarded this label. Among other things, the company is responding to the growing trend towards ecological construction.
Yet it was only a few years ago that global corporations such as Nike, the Gap and Chiquita made negative headlines due to unethical business practices, such as child labor in third world countries. Since then, all three companies have publicly discussed their problems, revised their methods and are now among the US corporations that are considered role models in the field of corporate social responsibility (CSR) - the corporate sector that deals with the ethical issues of business and encompasses areas such as employee rights, philanthropy and environmentally friendly production. "In the past, it was quality that set brands apart. Today, it's a company's reputation," says Bradley Googins, Director of the Boston College Center for Corporate Citizenship. "Customers, as well as employees, now expect more from a company in this regard." The target group for these efforts at consumer level is the so-called "Lifestyle of Health and Sustainability" (Lohas) segment, a population group of around 50 million in the USA that attaches great importance to the environment, human rights and health in its purchasing decisions.
Some companies began setting up community relations departments back in the 1990s, often for the benefit of the company's immediate local community. But corporate efforts to communicate these activities to the outside world have skyrocketed in the past year, says Jay Whitehead, CEO of business magazine The CRO. "The magazine was founded in the same year that companies such as General Electric, BP, Toyota and Ecolab began to move away from defensive communications practices in 2006 and aggressively invest money in CSR to sell more products, attract capital and recruit talented employees." According to Whitehead, a total of 31.7 billion dollars was spent on CSR in 2006 alone.
However, industry observers also believe that as consumers become more environmentally aware, skepticism about the truthfulness of such campaigns will grow. For example, the "Ecomagination" campaign launched by General Electric (GE) back in 2005, which promoted the use of environmentally friendly energy, was long regarded as a model for convincing green advertising. But not all green marketers are convinced, as GE has not only produced more energy-efficient locomotives since then, but has also lobbied to thwart planned new government smog regulations. "GE is going against its own principles," says BJ Cook, Director at the eco-marketing agency Digital Telepathy, who points out that this is hardly discussed in public. "They wanted to capitalize on it first and foremost, and they did that by creating brand awareness among customers."
Gerti Schön, New York
"CSR is integrated everywhere"
Stanley Litow,
responsible for Corporate Social Responsibility at IBM, talks about ecology as a marketing tool.
WW: How can CSR be integrated into a successful marketing and communication strategy?
Stanley Litow: First and foremost, you communicate your principles to customers and business partners. We operate a 47 billion dollar supply chain, these are companies that work with us on a regular basis. There is a code of conduct for these companies that not only includes our CSR practices, but also what we expect from our partners. CSR is integrated into all our activities, our marketing, our advertising, our customer relations, our employee policies and business relationships.
WW: How credible can a company be that constantly praises itself?
SL: It's important to involve third parties rather than going it alone. IBM, for example, has started a network to promote technology for humanitarian purposes, and many organizations have reported on it. We leave it to others to praise our progress.
WW: What is the key to a successful CSR policy?
SL: You need the right content. You can't take bad balance sheets and then try to sell them as something positive, that would be like putting lipstick on a bulldog. People aren't stupid, they realize when you're trying to soap them up.
Interview Gerti Schön
