It’s not easy being a sustainability leader. Credentials need to be watertight and product quality and performance must match the competition

In the late 1980s, when the first wave of green concerns emerged, two things happened.

First, a new range of products appeared that were created to provide green alternatives – products such as Ecover. They were based on the premise that consumers could be persuaded to save the planet by choosing green at the supermarket. 

Second, lots of other companies jumped onto the bandwagon and began making what often proved to be false green claims. These were quickly discredited and led to consumer cynicism.

Things have moved on a lot since then as companies continue in the search to find ways to make money from more sustainable products. But what have we learned?

We have seen that if the founders of the niche eco-alternatives believed that one day they would sweep aside their mainstream competitors, they were wrong. Ecover remains a choice in the marketplace – but it has remained pretty much static in its niche.

And we have seen that eco-brands are still very much in the experimental stage when it comes to winning consumer acceptance.

The umbrella approach

Home improvements retailer B&Q, owned by multinational Kingfisher, for instance, has introduced an umbrella label of One Planet Home for products that represent the best environmental choice. It says it aims specifically to avoid creating a niche brand. According to Matt Sexton, the company’s director of corporate social responsibility, any niche eco-brand will not reach across the customer base.

Sexton says: “20% of people will actively seek out green products. 60% would like to do the right thing, but don’t want to make trade-offs on price or quality. Then the final 20% are the ‘Top Gear watchers’ who think it’s all a load of rubbish. We need to reach the 80%.”

When B&Q first introduced One Planet Home, it created a special section within some of its locations as eco-shops. But the company found that even grouping products physically together could send the wrong signal. “We learned that if you put all the eco-products in one place, people mentally put it into the niche category. The 20% who actively seek such products go there, and everyone else stays away. It’s the same lesson that the supermarkets learned with organic food.”

The key thing for One Planet Home is that it is an umbrella for environmentally better products; it isn’t a coherent single brand. So a product that fits within the umbrella may carry a price premium – as non-solvent-based paint often does – or it might just be one of the cheapest.

For example, the lowest-cost carpet underlay is made from recycled clothing. That makes the One Planet Home brand one that provides information and advice to customers, rather than marketing one specific proprietary solution. Sexton hopes that the impact of this will be to lead people to trust B&Q more in giving them the advice they say they need.

“We haven’t fully got there yet,” Sexton admits. “One Planet Home is in its fourth year. Over that time it’s been as much an internal brand as an external one. It works well internally. Externally, we haven’t made it easy enough to find these products on the shelf. We’re working on improving this and will turn up the volume over the coming year.”

Responsible delivery

Delivery firm DHL is in the same experimental phase with its Gogreen product. In many ways, it has the toughest marketing job of all, since Gogreen simply adds a surcharge to its standard delivery fees, which pays for carbon offsetting. This goes hand in hand with the company’s work to reduce the emissions from its overall fleet, having set a target for 2020 of carbon emissions down by 30%.

DHL spokeswoman Christina Müschen says most Gogreen customers are businesses, many of whom have made their own commitments on carbon. And, although she also believes the brand is not yet where DHL wants it to be, it has nevertheless seen shipments increase in value over the past year by €100m to a total of €1.9bn.

“The whole of the additional cost goes to pay for the carbon offsetting,” she explains. “So in terms of making money from sustainable products, DHL does not aim to make a premium from Gogreen – only what it would make from its delivery product overall.”

Müschen concedes that some customers may be attracted to DHL because of the availability of such a product, so it may have a hand in driving volumes.

She also draws attention to the increased value to be gained by the company’s work to reduce the emissions of its fleet. “Obviously, if we create less CO₂ then the cost of offsetting also goes down.”

This is a feature common to many of the companies active in this space. Nobody thinks it’s enough to have a single green brand, while leaving mainstream offerings untouched.

In the case of clothing and footwear giant Timberland, the innovation that goes into its Earthkeepers range often produces solutions that make their way into the rest of its products. For instance, three years ago the company introduced “green rubber” – originally from recycled car tyres, now from recycled latex.

In the event, it turned out that this green rubber not only met all the durability and other standards tests that are required of all Timberland products, but it was also cheaper. So it has now become standard across the company’s entire product range.

This defines the process for Timberland. It is constantly reducing the impact of its products, but at any one time Earthkeepers represents its pioneering efforts. And the bar is being continually raised.

Nevertheless, Margaret Morey-Reuner, the brand manager for Earthkeepers, says the company is very aware of the fact that, for customers, style and performance remain the leading factors, ahead of eco-consciousness. Earthkeepers products are not premium priced in most cases, and they have to perform as well as any other.

“All materials have to pass strict tests. The consumer perception that eco means less good and more expensive is slowly beginning to dissipate in the face of experience with the product.”

Morey-Reuner says “Gen Y” is the company’s target consumer. “They are not blindly brand loyal. They look for independent verification of what you say, and they do research before they purchase.”

Selling the big vision

One thing that all these companies have in common is a big vision. For Timberland it is the time when all of its products achieve cradle-to-cradle positive impact. Earthkeepers is the focus for innovation, but it then pulls the entire company along with it.

For DHL, it looks forward to a time when the technology for alternative vehicles can drastically reduce its emissions – though for the size of vehicles the business needs this seems some way off.

And for B&Q, it has framed a big vision of becoming “net positive” where it contributes more than it takes. And in particular, it targets the huge potential downstream benefits of actively improving the energy efficiency of the UK’s existing housing stock.

None of these brands yet knows how the big visions will be achieved – or if they will prove saleable to consumers. Marketing products is a subtle art where the tendencies of people can be baffling, even without the sustainability angle.

In his book The Power of Habit, Charles Duhigg notes that when Procter & Gamble scientists discovered a formula that absorbed smells and removed them, they thought they had struck gold. Something that actually removed smells rather than simply masked them – surely this was a product that would fly off the shelves.

But when the company first piloted Febreze, they were bemused to find that it didn’t become an instant hit. When it carried out further research to try to understand why, it eventually realised a key fact. People who lived in houses where there was a strong smell – whether because of tobacco smoke, or pets, or other factors – became used to it to the point where they didn’t feel any need to remove it.

Nobody believed that their own houses smelled. Therefore they didn’t think they needed a product to solve a problem they didn’t know they had. The company had to shift its marketing to focus on other areas that people would respond to, and not mention at all what actually made it such a great product.

It was only some years after more successful marketing had established the product that they began to mention this benefit again.

Quality and style

On the sustainability front, one can draw a parallel with how the Toyota Prius was introduced. Conceptually, Toyota wanted to create a more environmentally friendly car. It could see where world events were taking us, and knew that the industry had to change to tackle this issue.

But when first trialled in the US, Toyota found that consumers didn’t respond to the car if sold on environmental grounds. It was too technologically advanced for deep greens, who rejected this level of style and performance as unnecessary, and mainstream consumers assumed that something designed to be green would be compromised in quality and performance.

So the initial marketing of the car that became an iconic green brand didn’t talk about the environment much at all. It focused on aspects associated with superior technology, such as how quiet the car was when being driven in cities.

Again, once the product had become accepted for being stylish and high quality, its green credentials could be added. And when showing your concern for the environment became fashionable, it suddenly became the car that the movie stars wanted to be seen driving. And that was as much down to luck as to judgment.

Toyota, unlike its competitors, had a hybrid car that had no non-hybrid version. Other companies had hybrid versions of their mainstream models. So if you wanted to make a statement, you got in a Prius. It was classy and distinctive and Tom Cruise drove one.

Duhigg’s book concludes with the thesis that the subtle trick is to find products that help customers to change their ingrained habits. And it is testament to how difficult this really is that, 30 years on from that first wave of green consciousness, the leading companies are still experimenting and trying to find the ways that work best.

This is the first in a series of stories in Ethical Corporation that will explore how companies develop new business streams from sustainable products and services.