Conscious Consumerism Myth – Where Is the Future of Sustainability Marketing?

I never believe the fact that sustainability is a natural, inherent consideration when customer makes their daily purchase decisions. It often comes as an after fact justification. This course has reaffirmed my thought that in order for green to be “the choice” for most consumers, the situation has to be made very restrictive and defined for this to happen. Great must come first, and green may be then added into the decision-making formula. Phillip Haid digested the myth of conscious consumerism via Sustainable Brands, where he identified the discrepancy between people’s normative and positive thinking and actions.

Throughout of the course, we encountered countless data, indicating that sustainability has become a new trend in the society. Jennifer Elks claimed that Millennial will drive sustainable purchasing trends (as mentioned in my January Archive Journal),  and Nielsen’s Global Survey on Corporate Social Responsibility, stated that 55% of global online purchasers are willing to pay premium to companies  whose corporate responsibility is geared towards some charitable and supportive mission that is not purely monetary driven. Nevertheless, where are the real changes? If this many claim that they will be committed and dedicated, why is green purchasing still situating at a niche market? Sustainability may not be unfamiliar to the corporate and business world, because there is inherent cost reduction and efficiency enhancement associated with such initatives. Therefore, it makes strategic sense for any company to make the shift, because it achieves desired result. Nevertheless, to the general consumers (not the “true blue-green type”), green initiative still remains dispensable. In other words, they are indifferent towards green products and regular prototype. The only situation that I envision that the green product is favoured, is that the green alternative has a brand image and market reputation to be of higher quality accompanied with equal price or with slight, insignificant adjustment for premium. In short, unless our thinking can be “prep-programmed”, revolutionized, or consciously adjusted for when making purchasing decisions, we may have to reply on business and government to make every possible choice on the shelf green to be green purchasers.

Another myth tackled by Haid relates to motive. This one challenges the impossibility of co-existence of economic drive and social drive of a company, which mainly results from cynicism and distrust from purchasers. It would be overly extreme to claim that business functions with money and money only.  I feel that this type of thought is fading in the society, which puts us as a transitioning stage between pure awareness to taking actions. There is a long way to go, but it is trending positive. Hopefully there could be a day where changes can be accelerated. As the results become observable, the process can be further quickened, forming a virtuous cycle of development.

ch8se (choose): “Transforming” Apparel into Trees, Meals, and Water

 

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It is not rare to see companies strategically sacrifice part of their profit to support social missions such as sustainability and charities. Nevertheless, it is rare to see a retail company driven purely by social mission who donates 100% of its sales revenue to three different organizations that converts money into essential support. This is the story of ch8se, who launched their campaign on indiegogo and gained traction and attraction through social media platform like Instagram.

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The initiative is similar to what we have observed with TOM’s shoes. Nevertheless, ch8se’s decision appears to provide more practical support to these countries in comparison to shoes. Directly equating apparels purchased to number of trees, number of meals, and amount of clean water is certainly not a new marketing strategy; however, its undeniable effectiveness by establishing a comparison further increases its influence. What is unique here, is that in order to provide a more direct and transparent record of achievement, the company created an “impact code” for each item purchased, where consumers may directly enter the code to view the change that they have brought to people. This individualized approach further inflates the efficiency of its business foundation, and further incentivises the customer to become returning purchasers.

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The design of the male and female are identical in patterns and styles, and they are classified as “simple basics” – items available in very wardrobe. In terms of the design and cut, cho8se does not seem to have an advantage, because of the limited varieties available within the product category. I personally feel that their clothes are mediocrely high-end. While the raw material exhibits quality, it does not create a sense of need for the customers, to own such piece of clothes, because a less expensive prototype or similar twin could be easily found in other stores. This may look like an over consideration, because ch8se‘s primary objective is not to become a designer stores, but a social support business. However, I still feel that the reason that people will chose to purchase such apparel will be to support social cause, rather than being driven by a desire of want and need. To me, this sounds opportunistic, and it even diminishes the effectiveness of the campaign. I tend to view that sustainability and social support should come after one’s preference, rather than acting as the primary reason of purchase, and force customers to then make a decision within the boundaries of sustainability.

Another question in consideration, is regarding the long term development of the company. ch8se is committed to do something well. Nevertheless, it appears to act more like a successful campaign rather than a social business. Sooner or later, the company will be forced to update their stock and design, because most of the people who have the money and heart to support the campaign will already made their purchase. Therefore, with long term considerations in mind, there is some planning needed to ensure the continuous success of the company.

 

Impact Investors and Impact Investing: Solving Problems and Feeling Accomplished

“Impact investing is the process of aligning the assets one has allocated to achieving a financial return with values and to measure and respond to the data of both performance and alignment over time,”

                                         –Chris Hale, founder and CEO of microtrade finance firm kountable

 

Up until this point, I still hold the general impression that sustainability something that is out the minds of investors when it comes to choosing stocks. My financial background has taught me that the investors, regardless of their asset level, will strive to maintain and increase its numerical value. Despite of the heat and debates that we hear in the academic and business community, we are still waiting for a for-profit organization (preferably multi-national giants) that places sustainability before profit.

A new concept, Impact Investing, aims to marry the profitability and the dedication towards social good. Coined by Chris Hale, the guidelines for such an investor add an additional criterion to the existing rick-and-return trade-off portfolios. Investors dedicate their money and decide to earn an income by solving problem XYZ. Alternatively speaking, this elevates the level of decision-making from simple profit to meaningful impact.  The investor is expected to align the investment with their person values and objectively evaluate the return. Naturally, we would be concerned about the feasibility to quantify the various externalities that influence the stock performance. When environment and resource is added into the formula, the mechanic model not only increases in complexity, but also increases in difficulty to gain updated and adequate level of data to retain the statistical significance of the analysis. The data problem is evident, as admitted by Hale, and they are still in a process of formulating a systematic way to simplify the decision-making process.

I personally found the notion to be unique; however, I feel that the definition provided could be further improved to reduce ambiguities. Investment is always a choice, and Impact Investment is not an exception. Although Hale emphasised that Impact Investment will not compromise the financial prospect of a portfolio, this seems to contain some inherent uncertainties. Theoretically speaking, the emergence of companies is directly relevant to the needs of the general public, which could be referred to as opportunities or potential problems. For example, the computers and appliances that we purchases often contain an “ENERGY STAR” certification, denoting a reduction in power and resources consumed. It could be safely claimed that every established company, regardless of the scale and industry, are deemed to solve problem X, problem Y or problem Z. This really challenges the claim of solving problems. What should be the important problem by Hale’s definition? Are there further criteria that help investors to identify companies that are truly dedicated, rather than coating their business in green? There are still some explorations needed with the questions raised above, as the concept evolve and mature though practice.

 

Image retrieved from Google, and the image about World Problem is founds from: http://propertyupdate.com.au/biggest-problems-facing-australians-world/

(the only two countries that contains such plot is Australia and New Zealand. it is chosen for pure graphical representation purposes)

One Step Further – Taking Change from the Supply Chain to Consumers

The Easter long weekend not only gave us the freedom and will to “all you can sleep”, it is one true chocolate feast for younger children, who enthusiastically invest their energy to complete the Scavenger Egg Hunt. UK based multinational grocer Tesco decides to take two small steps to alleviate the negative effect of the sugar rush.  In their promotional video, the tag line “Every Little Helps” aligns well with the company’s purpose to treat the customers “a little better every day”. This time, they have added the green and sustainability feature as part of a deliverable.

The two distinctive actions are: sourcing 100% of its cocoa from programs that promote responsible cocoa when producing their own brand Easter Eggs, and patterning with LEGO to launch “Easter limited edition toy”. The interpretation regarding these moves appears to show the company’s opportunistic, short-tern objective, rather than being dedicated and committed. Nevertheless, this is a reality with most for-profit organization, where tying their brand with sustainability can potentially be strategic, while following through the action requires second thoughts. Under most of the situations, the short run profitability sets a foundation for long term adoption and implementation of the program as these pilot programs intends to test the water.

I found the idea of responsibly sourced coffee interesting, because I think most of the explicit value of this concept lies within taglines and advertisement, rather than quantifying the reduction in environmental impact measured with certain scale or standard (carbon emission, carbon footprint, waste reduction, quality increase etc.). Tesco also chooses its own product lines to promote this new initiative. This allows them to achieve media headlines and further build their brand image, but also allows for production cost control. As a multinational grocery, Tesco also carries more well know products, such as Hershey’s Kisses, Kit Kat and Kinder Eggs. As what we have seen in London Drugs and Safeway, when a homogeneous product is branded under the store’s name, they are offered at a relatively lower price compared to the product imported from its fosterer (ex. Safeway Coke and Coca Cola’s Coke). We may see this as a way for Tesco to ask for a price premium, to compensate the opportunity and tangible cost engaged in the process in order to have a more satisfactory profit margin.

When thinking more positively, this could be viewed as one of the first steps that multinational groceries intend to begin a new venture. After all, the Earth is what ultimately gives us what we eat and drink and many more. Cocoa may appears to be a smaller area when we look at other more essential food elements; however, it sets smaller starting points so that business and consumers can contribute a little every day.

 

For videos and reading, please visits:

http://www.sustainablebrands.com/news_and_views/products_design/sustainable_brands/tesco_celebrating_easter_responsible_cocoa_exclusi

 

When Recycling Label Tell the Wrong Story

It is instinctive to conclude that the product is recyclable and is greener when one sees the green triangular arrow located either on the side or at the bottom of the package. Nevertheless, this seems to be a strategic and intentional mislead, as chef-turned-activist Hugh Fearnley-Whittingstall discovered. In fact, the Starbucks coffee cup with a proudly printed green label only contains 1% of material that can be successfully processed and recycled by regular recycling processes. Most of the materials go directly into landfill, resulting in limited to non-existent effect on waste reduction. Here lies Hugh’s “Waste Not” campaign, where he aims to shape behaviour and trigger change. As a response, Starbucks implemented a new policy in U.K., doubling its discount (25p to 50p) to people who bring their own containers for coffee.

Companies like Starbucks and Costa did not set themselves up to be sustainable. This added focus has evolved overtime, with shifting consumer preference and the potential for profit. The tactic for Starbucks is very strategic, in the sense that it responded to the concern posed by Hugh, without significantly compromising its ability to generate revenue. The common price mark-up we see in one cup of coffee is calculated to be 67%80%, with a £ 2.10 for tall coffee in the U.K, the profit margin is thinned by about one third. I personally regard this as quite impressive for a for-profit organization. This reflected the fact that sustainability is no longer a choice in businesses, at least in developed countries; and it has become a requirement.

What appear to be more impressive are Starbucks’ PR and associated departments, and its long range planning horizon. When negative results leaked out, it is more logical to respond to the criticism with a remedy, and then further investigate this matter. The remedy can technically be revoked or altered any time. As well, another question here is what percentage of consumer is actually conscious about such news, and is at hear, an advocate or active practitioner. This seems to be always at question, because people may appear to be following the trend, but may not pay that much attention when it comes to day to day details. Starbucks has found a hole in the recycling classification system, and produced something that is coated with recyclability. Since most people may not necessarily invest their time into discovering the truth, these cups end up falling through the cracks. This simply results more inefficiencies. Starbucks is not lying. However, the end result appears to be as ineffective as if the label is not present.

Can we conclude that the recycling label has been abused? Probably yes. Nevertheless, we are unclear of Starbucks’ actual intention in this case. I feel that unless this set of specialized, professional knowledge can become public knowledge, there would still be areas for improvement, and the opportunity to make mistakes.

 

 

 

When Companies Unite to Make Visible Changes

Lots of claims are showing positive results. There are companies specialized in assessment and promotion of green measures, which encourages companies to add sustainability into the formula. Nevertheless, why are we not observing visible changes? It would be an overstatement to claim that Corporate Knight, PwC, and UN Global Compact-Accenture CEO study analyses things from a rosy lens; however, the publication of the hard numbers should be alarming.  Why do the actions appears to be incoherent with observations, claims, and beliefs?

Remly has communicated some extraordinary figures, where 74% of CEO believes that “environmental, social, and governance (ESG) data and sustainability efforts” are material considerations that are at core for the long-term success of companies. The UN survey affirmed that 91% of the 750 companies regards climate as a key issue for their future success, solidifying that the preservation has penetrated the day-to-day routine of the “evil economic giants”. Even more interesting, Corporate Knights discovered that 87% of its top 100 knights award the CEO through bonus in return for achieving the organization’s sustainable objectives.

What is thought-provoking; however, is people’s attitude on sustainable goals versus monetary targets. The latter is deemed to be much more conventional which contrasts with an almost “contradictory looking” environmental objective. Despite that more and more companies are adding sustainability into the formula to further boost their balance sheet, most consumers still regard this as a CSR – more noble and dignified. There is an implication from Corporate Knights, which advocates consumers to raise their standard and expectation when making a purchase decision. Consequently, the business will make the adjustment, so that their product can gain more popularity. Nevertheless, there is still a link missing to trigger an action. We need a more concrete answer than “because we should protect environment for the future generations and we should respect Earth” when asked why one should engage in sustainable behaviour.

Often times, as individuals, we tend to claim that we are not powerful to enough to make impressive changes. However, with more powerful business leaders, who take control of a larger population, we would expect the change to be more obvious, although this is not necessarily the case. We see company getting increasingly conscious; however, we still see them using excessive packaging, utilizing cheaper labour in third world countries, discharging waste into water streams. It is not to say that they are not trying hard enough; but we might be missing the point here. Sustainability may be one of the many objectives that companies consider, or claim to consider. When this is tied to economic performance and opportunities, there is also an incentive for these companies to paint their image with suitability. Sustainable objective is something that needs to be tracked. It should also be normalized, as one of the many strategic goals for companies, rather than being separately treated as a bonus perk.

The Cost of Human Advancement is Nature – Reflections on the Movie “The Mermaid” By Stephen Chow

 

If the Earth does not even contain a sip of clear, drinkable water or an atom of clean air, then there would be no point for human beings to pursue for wealth and profit since survival would be an impossibility.

—From Prologue

Back in the ancient times, human beings live in harmony with the fishes and other creatures. More broadly speaking, they live in harmony with every other component of the entire ecosystem. Their swelling greed brings increased ambitions, which ironically leads to innovation and technological advancements.  The Mermaid told a story about sustainability and restoration, a tragedy about destruction and reconstruction, and a satire about the societal advancement and desire. It is not only rare for a Chinese movie to talk about catastrophes and failure of mankind, sustainability is also a rare breed to be observed on the big screens. This may have proven, partly, the point made by Jennifer Elks in her comments about the new trends of sustainability with China on a rise with the Millennial generation.

In the movie, the Company owned by the protagonist purchased an entire gulf, with the will to profit by landfilling the water bodies and building high rises. The “ethical” and “sustainable” methodology was to emit sonar into deep sea levels, to dive away the fishes and planktons through severe injuries or death. The scientists also pursued a differentiation strategy by using sonar with unique wavelengths for identified species of different mass.  One of the most striking scenes for me was the hundreds and thousands of plastic bottles that were tied together, hanging from the stony ceiling of the cliff. Ocean plastics, after being disposed inaccurately, become nightmare for the creatures. Nevertheless, I feel that pure statistics and graphics have their limits. Human learn by experience, and until they are able to fully immerse and experience the agony imposed by their actions, it may be difficult to trigger an alternation of behaviour. Moreover, it would also be much more effective if we are able to physically experience a catastrophe. This is about learning the lesson in the hard way, which internalizes the values and beliefs. Although the price paid is grand, the volume of thought-provoking, follow up campaigns can also be more powerful, more trustworthy, and more effective.

I always feel that change cannot be achieved with an individual. The need to change and the desired action is often invented, by a group of individuals, with the objective to gain more influence. However, human beings seem to generally be a passive responder, reacting only to unavoidable consequences and responsibilities. There are still sometime before the environment becomes the one and single pressing issue that can no longer be ignored. The normative analysis tells people to become active and engaged, while the positive analysis indicates that people are putting their dependence on each other, without truth progressing as a unity.

 

 

 

A Bright Sustainable Future with Aspirational: A Fallacy?

It is neither about pure cynicism nor apathy, when it comes to the discussion of an ideal, sustainable future. The inevitable environmental changes and negative effects fostered the popularity of buzz words such as “green solutions”, “sustainability”, “ocean plastics”, and so on. Yet, environmental scientists and others at the forefront lobbying for changes, failed to provide a detailed timeline aiming to trigger reflections in the public’s minds. In the future (where we are unable to update you as to when and how it will occur) the market will be miraculously populated with green products and its alternatives. By then, we can claim ourselves as a sustainable member living in a sustainable society. Environmental enthusiasts seem to be purposely signing a dishonoured cheque, where the reality remains inconsistent with the desires and actions.

Claiming that aspirational shoppers are the major target for a green future, Jennifer Elks painted an overly optimistic photo in regards to the direction of sustainability. The shoppers are empowered and unconventional. They seek for cool and sleek designs and functionality. They are peer influencers and are vulnerable to world-of-mouth promotions. They seem to be an advocate, holding normative mindsets and judgment, with limited incentive to turn that into actions. They are young, with an average age of 39, and populated by Millennials and GenX, who are major contributors to fad and fashion. Demographic wise, the aspirational contains you, me, and others, who are currently studying or about to graduate from university as well as those who entered the society as “freshman”. Can a change actually be brought upon and driven by this young group? Are they truly environmentally-minded and considerate as they have claimed? How loyal are they to the brands? How long-lasting are their loyalty? Are their reasons strong enough to serve as backbone towards their decision? How can a green future be achieved? What is a green future?

As these questions get boarder and boarder, with increasing level of difficulty to be addressed, it may be worthwhile to take a step back, and decide what exactly the desired end result is. Is transforming the society into a green future truly unanimous, across generations, industries and ethnicity? If yes, why are we not there yet; and if no, why is it populated on online and offline media? If this is truly a question at global scale, how can it be broken down so it could be dealt more effectively and efficiently? Or more generally, does the result fully justify the opportunity costs of investment?

We want a green future to benefit the generations that long live after us, to enjoy the same biodiversity and climate as we have born into, lived through, and returned to sleep. Elks commented that we should rely on the future generations, who are maturing and are able to make a difference. There is nothing wrong to dream big, however, it is important to draw a line between setting responsible, practical goals and day dreaming about a premature utopia.

 

 

For further reading:

http://www.sustainablebrands.com/news_and_views/brand_innovation/25-billion-aspirational-consumers-mark-shift-sustainable-consumption