Green Branding Imperative

“Brands will not be able to opt out of [being green].  Companies which do not live by a green protocol will be financially damaged because consumers will punish them.  In the longer term, I do not think they will survive.”         — Lee Daley, chairman and chief executive of Saatchi & Saatchi UK 

The game is changing; it is now an imperative for all brands to be green.  The environment, and specifically global warming, may soon be an incendiary issue for corporate America. One recent poll indicates social responsibility is valued by American consumers and “damaging the environment is the main reason [consumers] would think that a company is socially irresponsible.”  (Italics added) 

Because of the catastrophic, and likely irreversible, consequences of global warming, corporations may find themselves lightening rods on the issue. Companies risk being branded socially irresponsible, making them vulnerable to criticism and putting brands at risk. 

This risk is likely only to increase with time. Brand perception is likely to be shaped by potential influencers including consumers, businesses, governments and non-governmental organizations.  These groups are growing rapidly and becoming more vocal.  Indeed, influencers have significant power as demonstrated last week when Mia Farrow successfully associated the 2008 Olympic Games in Beijing with genocide in Darfur, causing the Chinese to rethink their support for the Sudanese government. 

Moreover, a recent Supreme Court decision will only embolden those that seek redress from corporate America.  The 5-4 ruling states that EPA’s decision not to regulate carbon under the Clear Air Act was “arbitrary, capricious or otherwise not in accordance with the law”. Smart marketers will view the Supreme Court’s ruling as a catalyst for proactive change.  By doing so, these marketers will reduce the risk of public criticism tarnishing their brands (e.g. through negative PR, lawsuits), while perhaps securing a competitive advantage by staying ahead of the curve. 

Such a strong association between corporate action – and potentially inaction – on the environment and social irresponsibility leaves brands at risk unless proactive steps are taken to become green.  Emerging green consumer purchase behavior suggests this scenario: 

• Despite the real threat of global warming, consumers will continue to spend on the things that they want and enjoy
• Demand for green (or greener) products will increase over time as attitudes and social norms evolve, new product choices become available and information that enables consumers to make informed purchase decisions (e.g. green labels) is introduced
• Consumers will start to shift spending to greener brands within a category
• Consumers will increasingly prefer to purchase from companies with a brand that is perceived as green, regardless of whether or not the product that they ultimately purchase is one of the company’s “green” products

For corporate America, this should be wake-up call.  Simply put, every brand will soon need to be green, regardless of whether or not customers are actively buying green products today. Yet the window of opportunity is closing: soon green will simply be a threshold to compete.  Moreover, it takes time to build green credentials that consumers deems authentic. Companies that do not actively pursue a green brand strategy today risk being left behind; and as Daley suggests, those who do not may even jeopardize their very survival.