American Cos. May Be Greener Than Customers

by Karlene Lukovitz, Sep 29, 2008, 8:31 AM

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According to a recent survey on environmental attitudes from Yankelovich, "going green" is only of moderate interest to U.S. consumers.

Based on a survey of nearly 2,800 consumers who are representative of U.S. consumers age 16 and over, Yankelovich found that "only" one-third (34%) say they are "much more concerned" about the environment now than they were a year ago, and 13% currently report being "strongly concerned" about the environment.

These results raise some valid questions for all kinds of companies, including consumer product-goods marketers and retailers.

All companies are aware of the power of perceptions regarding corporate social responsibility, but if environmental issues are not a priority with most U.S. consumers, why are leading American CPGs, retailers and other companies making growing investments in sustainability initiatives?

The answer lies partly in regulatory-driven necessity, but increasingly in investor scrutiny and management recognition of climate-related risks and opportunities. For some major companies, such actions keep pace with changing consumer needs and preferences in a competitive business environment.

For marketers, "most consumers' lukewarm attitudes about 'going green'," mean that companies can and should "exploit the 'green-ness' of their products," Yankelovich President J. Walker Smith concluded. The 13%--or 30* million--Americans who are strongly concerned about the environment represent a "niche opportunity," said Smith, and given the costs of meeting federal and state environmental regulations, it makes sense to try to leverage the "new and improved" green product to consumers.

The good news, according to Yankelovich, is that companies that employ strategies that successfully convey personal benefits in the green attributes of a product can make these product attributes a key feature in buying decisions, even for consumers who are only moderately concerned about the environment.

"To make a green marketing strategy successful, organizations must employ behavioral tactics that move consumers up the continuum to greater levels of 'green-ness'," summarized Smith. Yankelovich's framework for green marketing strategies ties the likelihood of consumers' buying a product based on its 'green' features.

While turning 'green-ness' into marketing gold on a mass scale may be easier said than done in the U.S., it's in a companies' self-interest in investing in sustainability initiatives.

Among CPGs and retailers, the industry leaders in carbon disclosure in this year's CDP report were Coca-Cola, Brown-Forman, H.J. Heinz, Molson Coors Brewing, Colgate-Palmolive, PepsiCo, Kimberly-Clark, Walmart and Sara Lee.

Some of these companies confirmed billions in savings as a result of sustainability efforts in operations and packaging. Such savings not only help improve financial performance, but can help companies maintain competitive pricing and lower other consumer-borne costs, points out Barbara Kipp, advisory partner of the Governance, Risk & Compliance division of PricewaterhouseCoopers, which writes the CDP reports.

"There's a real opportunity for consumer education here, because responsibly produced products not only cost consumers less money when they purchase them off the shelves, they also ultimately save consumers money through lower costs associated with products' disposal," says Kipp.

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