Marketing and sustainability - Sustainable Innovation, Sustainable

Marketing and sustainability

Martin Charter, Ken Peattie, Jacqueline Ottman and Michael J. Polonsky

2 Marketing and sustainability

‘Marketing and sustainability’ by:

Martin Charter: The Centre for Sustainable Design, UK

Ken Peattie: Centre for Business Relationships,Accountability, Sustainability and Society, UK

Jacqueline Ottman: J. Ottman Consulting Inc., USA

Michael J. Polonsky: Victoria University, Melbourne, Australia

Published by Centre for BusinessRelationships, Accountability, Sustainabilityand Society (BRASS), in association with The Centre for Sustainable Design, April 2002.

The authors would like to thank the followingfor supporing the Sustainable MarketingKnowledge Network and the research workthat has been incorporated within it:

· Centrica plc

· Economic and Social Research Council

· Cardiff University

· The Surrey Institute of Art & Design, University College

· J. Ottman Consulting Inc.

· Victoria University Melbourne forsupporting the Sustainable MarketingKnowledge Network and the research work which has been incorporated within it.

3Marketing and sustainability

‘Marketing and sustainability’ is based on an original booklet written by Martin Charter in 1990. The text has been updated and re-written to take account of the changing and emerging debate of marketing’s role inrelation to sustainable development.

This booklet has been produced as asupporting publication for the SustainableMarketing Knowledge Network (Smart: Know-Net) a web-based information andcommunication platform for marketersinterested in sustainability, available at www.cfsd.org.uk/smart-know-net

Introduction 06

· The evolving agenda 06· The drivers for change 07· Towards the triple bottom line 08· The challenge for marketing 09

Discussion: key concepts 10

· What is ‘the environment’? 10· What is ecology? 10· What do people mean by ‘environmental quality’? 10· What is the concept of sustainability? 10· What is green consumerism or socially conscious consumerism? 10· What is sustainable consumption? 11· What is the stakeholder concept? 11· What is marketing? 11· What is ecological marketing? 12· What is greener marketing? 12· What is sustainable marketing? 12

Key sustainability issues 13

Strategic implications 14

· Why get involved? 14· How should companies address sustainability? 14· Are there useful guides to business and marketing sustainability? 15· What is marketing’s role? 16

Marketing strategy 18

· How will sustainability affect the product life-cycle (PLC)? 19· Competitive advantage 19· Research 19

Contents

Marketing and sustainability

Making the mix more sustainable 20

Product 20Checklist for a sustainable solutions developer 21How can the development of sustainable solutions be encouraged? 21Where does ‘resource recovery’ fit in? 21How does customer service fit in? 22Packaging 22What is the best packaging? 23Price 23Place 25Promotion 26Developing campaigns 26Media advertising 27Literature 27Public relations 27Sponsorship 27Personal selling 28Direct marketing 28Exhibitions and conferences 28People 29

Implications 30

The future 31

About the authors 32

Key publications from the authors 34



“The significantproblems we facecannot be solved at the same level

of thinking we were at when we

created them” Albert Einstein

The evolving agenda

A range of studies worldwide have shown that customers (whether they are consumers,businesses or public sector organisations),employees and investors tend to favourcompanies that are perceived to be sociallyand environmentally responsible – or in short,those that are more sustainable.

Concern about the environmental and socialimpacts of business is not new and has ebbedand flowed over many years. But the overalltrend has been towards increased pressurefor better environmental and socialperformance. In the 1970s concern aboutpollution, resource depletion and populationgrowth impacted key industries such as oil,chemicals and cars. In the mid to late 1980s,there was renewed concern about theseissues, which affected a wider range ofindustries including household products,cosmetics, tourism and food. There was afocus on particular product types such asaerosols, cars and detergents, and the so-called ‘green’ consumer emerged as apotential target market for firms. There was arush to introduce environmentally ‘friendly’ or‘friendlier’ products, all too often on the basisof unsubstantiated or exaggerated claims.

The early 1990s saw a continuing focus on the environment, but also with an increasingemphasis on the broader concept ofsustainability, particularly after the WorldSummit on Sustainable Development in Rio1992. The business agenda during the late1990s became increasingly focussed onCorporate Social Responsibility (CSR) asanother dimension of the sustainabilityagenda. This was partly linked to concernsabout the impacts of globalisation. Theemergence of global corporations and brands,the convergence of global consumer tastes,the growth of the internet and the tradeliberalisation programme of the World TradeOrganisation (WTO) have all combined to build global markets. These markets areincreasingly serviced by global supply chains and by increased outsourcing ofmanufacturing to the developing world. This has raised concerns about the impactson the environment and societies of lessindustrialised countries, reflected in Seattleand other protests against the WTO since1999. There is growing scrutiny of ‘the worldbehind the product’ (Topfer, UNEP) with CSRand issues related to globalisation nowemerging as a ‘third wave’ of concern.

‘CSR is a base requirement of operating in the 21st century and is not an option’.

Tim Sharp, Director of Corporate Communications,Balfour Beatty.

The CSR and sustainable developmentagenda are becoming increasingly prominentfor companies and governments in the earlyyears of the new Century, with 2002 providinganother important milestone via the WorldSummit on Sustainable Development inJohannesburg.

Introduction


The drivers for change

Internationally, companies like The Body Shopand Ben & Jerry’s pioneered green marketsbefore the idea of business sustainabilitybecame widely acknowledged. In addition tosuch celebrity green brands, there have alsobeen a range of less well-known companiesoperating in green niche markets, typicallybased on a deeply held set of values thatcreates rather than follows a market (eg.Blackmores in Australia, or Tom’s Of Maineor Seventh Generation in the USA). Anexample of a company whose strategystrongly reflects its internal values is Wilkhahn:

For Wilkhahn the basis of all entrepreneurialactivity is the preservation of the ecologicalfundamentals of life, securing entrepreneurialindependence and consequently securingjobs, respecting human dignity and dueobservation of social and ethical rules. Weregard ourselves as as part of society forwhich we bear active responsibility. Wilkhahnwill, therefore, in future support and promotethe aims of sustainable development withinthe scope of what is possible for a medium-sized office furniture manufacturer.

The balance between economic, ecological,social and cultural goals, to secure desiredindependence, shapes corporate culture andthe way in which Wilkhahn rates success. We involve our employees, distributors,customers and public opinion-formers in theimplementation of corporate image. We shallkeep them informed about developments insustainability management and allow themdue participation in further developments.

Source: Dr Jochen Hahne, Managing Director, Horst Knigge and Thorsten Pree, Director, 'WilkhahnAdded Values', Wilkhahn (www.wilkhahn.com), Bad Munder: Germany, June 2000.

External pressure to improve the social andenvironmental performance of a company can come from a number of sources:

Consumers

Individuals’ concern about the environment ismeasurably growing and is being translatedinto a demand for greener products (althoughthe precise extent to which consumers arewilling and able to differentiate betweenproducts and brands on the basis of socialand environmental performance is acontentious issue). Research from TheCooperative Bank has indicated there aredistinct segments of greener, ethicalconsumers emerging who are becomingprogressively more discerning about theproducts, brands and companies theypatronise:

A recent study by the Cooperative Bank in theUK suggested that around one in three peoplein the UK purchased on the basis of ethics in1999. At least 5% of consumers consistentlysearch for ethical labelling, recycle, getinvolved in boycotts and discuss issuesrelated to brands.

Source: Cowe, R and Williams, S, quoted in Draper,S, 2000, p7, Corporate Nirvana – is the futuresocially responsible?, London: UK, Industrial Society.

In the USA Roper Starch Worldwide hasidentified five segments of consumers eachwith varying degrees of concern and action:

· The ‘True Blue Greens’ (major greenpurchasers and recyclers – 11%)

· The ‘Greenback Greens’ (will buy or givegreen, won’t make lifestyle changes – 5%)

· ‘Sprouts’ (who care but would only spend a little more to buy green – 33%)

· ‘Grousers’ (who see the environment as a problem, but somebody else’s – 18%)

· ‘Basic Browns’ (who essentially don’t care/won’t care – 31%).

Source: Roper Green Gauge, (2000), Roper Starch Worldwide.

The media

In the run up to Rio in 1992 environmentalconcern, and consumer interest, werestrongly influenced by media coverage ofissues like Chenobyl and the Exxon Valdez.There has since been a series of peaks andtroughs of concern throughout the nineties asissues have been highlighted by the mediaincluding the Brent Spar, BSE and geneticallymodified food.

On a broader front the European media has been the leader on many CSR andsustainability issues, which have then beenpicked up in the US. Oxfam, Greenpeace and Amnesty International were often the key drivers of CSR and environmentalcoverage throughout the decade.

Source: Good News and Bad: The Media, CorporateSocial Responsibility and Sustainable Development(2002), SustainAbility and Ketchum, in cooperationwith UNEP.

Business-to-Business (B2B) customers

In Business-to-Business (B2B) marketscompanies may have little choice but toembrace change to satisfy their customers.There are growing numbers of companieslarge and small that are being certified toenvironmental and social managementsystems and standards such as ISO 14001,EMAS and SA8000. As part of this process,and to protect themselves from anyaccusations of allowing their suppliers to dotheir ‘dirty work’ for them, such companies areincreasingly insisting on environmental andsocial audits and accreditations from theirsuppliers.

“CSR is a baserequirement of

operating in the 21st century and is not an option”

Tim Sharp, Director of Corporate Communications, Balfour Beatty

Regulation

The range of social and environmentallyorientated regulations facing companies has grown rapidly. Regulation is increasinglyforcing producers to take responsibility forpackaging waste and end-of-life consumerdurables. Other measures are aimed atspecific environmental problems such ascontaminated land or climate levies whichaims to reduce firm’s CO2 emissions.Regulation is also tackling issues ofaccountability (through ‘Right to Know’measures) and social responsibility in relationto issues such as equal opportunities.Although environmental regulation in particular can seem almost overwhelmingly complex forsmaller companies without legal specialists,helpful on-line guidance is becoming available(eg. via sites like NetRegs:www.netregs.environment-agency.gov.uk)

Public opinion

The Brent Spar controversy showed that acompany with a good reputation, whichabides by environmental regulations can stillbecome the focus of media and environmentalpressure groups, resulting in a public relationsbacklash.

A study by the Conference Board (a US basedeconomic research organisation) suggeststhat a high proportion of respondents (42%)believe that companies should be wholly orpartially responsible for helping to solve social problems, whilst a further 33% saidcompanies should focus on setting higherethical standards, going beyond what is legally required.

Source: Zadek, S, (2001), Doing Good And DoingWell: Making The Business Case For CorporateCitizenship, New York: US, Conference Board.

Towards the triple bottom line

Environmental and social constraints close inalmost daily on the operations of the firm – the depletion of natural resources, air andwater pollution, regulations involving changesto hazardous waste, human rights in supplychains are just some of the examples – today’sbusinesses can ill afford to operate by ignoringsuch factors if they are not to be caught withtheir trousers down! In a CNN world, wherebad news can move across the internet at the speed of light, companies have to beaccountable to a broader set of stakeholders.One of management’s biggest hurdles isreconciling growing customer and investorexpectations of a rising standard of living withthe reality of deteriorating natural resourcesand environmental quality.

Sensitivity to the social, ethical andenvironmental context in which a firm operatesis simply good business and certainly a pre-requisite for long-term legitimacy and survival.Firms must integrate these issues into theirbroader strategic thinking by adopting a ‘triplebottom line’ approach, rather than purelyfocusing on growth in market share, sales and profitability.

‘We believe there is a direct correlationbetween good performance in integratingcorporate responsibility policies and goodbusiness performance… It’s no longersufficient just to sit back and simply complywith the law and imagine that’s enough. Our customers expect us to go beyond theletter of the law in many crucial areas now’.

‘There is a growing trend towards greaterconsideration by mainstream investors of the risks and opportunities these issuespose to our business, not for altruistic reasonsbut simply because the management of anissue such as GM has the potential to affectsignificantly our commercial performance’.

Mike Barry, Environmental Systems Manager, Marks & Spencer Plc. Source: Ethical Corporation magazine, February 2002.


Introduction

The sustainable business value matrixThe Sustainable Business Value Matrix (anonline sustainability management tool) mapsten dimensions of business sustainabilityperformance with ten measures of businesssuccess. Based on extensive research, thematrix reinforces the business case – forsustainable development performance,especially in corporations but also generally.The business case will be shifting over timeand is being monitored. Overall the researchprovides evidence of strong links betweenbusiness leadership in sustainabilityperformance and business value creation.Positive links to financial performance aloneare strong and suggest a business case canbe made without resorting exclusively toindirect or intangible measures. The businesscase is, however, strongest when multiplemeasures are considered, emphasising theneed to take a holistic approach.

Of the ten measures of business value orsuccess, brand value and reputation is mostpositively linked to sustainability performance,confirming that business case analysis shouldnot focus exclusively on financial measures.Reputation and brand value are linked toethics, values and socio-economicdevelopment.

Of the ten sustainability dimensions,environmental process focus is supported bythe strongest business case, being stronglylinked to shareholder value, operationalefficiency, access to capital and risk profile.The business case for environmentalperformance is well established and muchrecited. This is followed by workplaceconditions, strong linked to revenue,operational efficiency and human andintellectual capital. Next comes environmentalproduct focus, strongly linked to innovationvalue. Other factors and links vary inimportance.

Source: SustainAbility (2001), Buried Treasure:Uncovering the Business Case for CorporateSustainability, London: UK

Leading sustainability thinkers state that beinggreen and socially responsible is good forbusiness both using traditional and socialmeasures. Businesses, as a key role player inthe global society, have a wider socialresponsibility to the communities they operatewithin – and to the suppliers within their supplynetworks or chains. Recognition of thisincreasing trend has led to the re-emergenceof CSR, now positioned along side eco-efficiency to tackle the sustainability agenda,instead of being portrayed as a separate andoften competing agenda as it was in earlierdecades.

The challenge for marketing

Companies should begin to prepare for a more sustainable millennium by re-examiningthe social and environmental impacts of their marketing strategies. This means re-evaluating their product and service portfolios,as well as the way these products andservices are created, produced and marketed.However, this can be a complex challenge formarketers. It can involve looking at impacts forcustomers and other stakeholders, includingthose that occur before the actual product isproduced (eg. from raw material sourcing) or long after it is disposed of. This takesmarketers outside of their traditional frame of reference.

Over the last decade or so, store shelves have been filled with greener products asdiverse as cadmium-free batteries, ozone-safeaerosols, recycled toilet tissue, catalyticconverters, unbleached tea bags and crueltyfree cosmetics. However, the greening ofmarketing has not always gone smoothly.There have been regular controversies overenvironmental claims, political problems indeveloping green labelling schemes, andpractical problems in the establishment ofrecycling initiatives. Some companies havebeen disappointed with the reception of their‘green’ ranges, and withdrawn them, butmany leading manufacturers have developedtheir ranges further, because it made goodbusiness sense.

Market leaders such as Philips and Electroluxare now starting to incorporate environmentalconsiderations systematically in new productdevelopment, and this has led to thedevelopment of the ISO14062 guidelinescovering the integration of environmentalconsiderations into product design anddevelopment.

Marketers have an involvement in thesustainability debate both at a macro andmicro level, even though they may not know it. Marketing has a key strategic role as theinterface between consumption andproduction, with a considerable influence over the construction of the company’sproduct/market portfolio and also over itscommunications efforts. At a micro levelmarketing usually has a key role at thebeginning and end of the product/servicedevelopment process. Therefore marketingprofessionals need appropriate education,information, training and tools to enable themto take account of CSR and environmentalissues in their decision-making.

Many of the ramifications of sustainability willgo to the heart of the organisation, and willhave major implications for the way thatbusiness operates into the new millennium.Business and marketing in particular canbecome more sustainable and it will be goodfrom a ‘people, planet, profit’ viewpoint.However, for many marketers the pursuit ofsustainability takes them into unchartedterritory, and confronts them with many newand difficult questions. What are the benefitsof incorporating social, ethical andenvironmental issues into day-to-daydecisions making? How can business identifyand make the most of the opportunities arisingfrom the new agenda? How can companiesaddress these issues without being accusedof ‘bandwagon jumping’ or superficialresponses? These are just some of the difficultand complex questions being asked.

The objectives of this booklet are to promptfurther questioning and discussion, and toprovide some practical ideas and checklistsfor action.


“A new era ofeconomic growth

that is forceful and at the same time

socially andenvironmentallysustainable; an

economy issustainable if it

meets the needs ofthe present withoutcompromising theability of the future

generations to meettheir own needs”

Source: Brundtland Report 1987

Before we try to tackle the issue of ‘Marketingand sustainability’ it may be useful to explainsome of the key terms and ideas involved:

What is ‘the environment’?

‘The environment’ is used loosely to describefactors around us locally, regionally andglobally. In recent times it has almost becomeinterchangeable with the word green.Business schools refer to the environment as a series of uncontrollable elementssurrounding the firm. It can be helpful to usethe label ‘biosphere’ to refer to the naturalenvironment to distinguish it from the social,economic and political environment ofbusiness. In a sense each organism can besaid to have its own physical, chemical andbiological environment.

What is ecology?

The word ecology is derived from the Greekoikos and logos meaning the ‘study of home’(okolgie). The science was developed from thework of Ernest Haeckel when investigating‘the study of living things within theirenvironmental context’.

Ecological thinking underlines theinterrelationship of the human and naturalenvironments. It has recently been applied to ethical concerns over the human use ofresources, and the disposal of by-productsand wastes.

What do people mean by‘environmental quality’?

Environmental quality can be defined as thesatisfaction of individual needs in a mannerthat will yield the maximum benefits to theindividual while minimising the effects orchanges on people and natural resources.This may be extended to the concept of‘quality of life’ and ‘well-being’ – making thelink between a person and his or her broadersurroundings.

What is the concept of sustainability?

Sustainability means to maintain or prolongboth environmental and human health and is simply good management. It means themovement towards the use of renewablerather than finite raw materials, minimisationand eventual elimination of polluting effluentsand toxic or hazardous wastes. It places amoral obligation on firms involved with theexploitation of natural resources to investigaterenewable and sustainable alternatives.

Sustainable growth can be defined as:

‘A new era of economic growth that is forceful and at the same time socially andenvironmentally sustainable; an economy issustainable if it meets the needs of the presentwithout compromising the ability of the futuregenerations to meet their own needs’.

Source: Brundtland Report (1987).

This illustrates how the needs of the market economy and nature’s economy are intertwined. Economic sustainability must be based on ecological and socialsustainability, as there is no economy, unless there is a planet.

What is green consumerism or socially conscious consumerism?

Green consumerism can be described as theuse of individual consumer power to promoteless environmentally damaging consumption,while still satisfying consumer wants andneeds. A range of issues mobilised thisphenomenon in the late eighties and earlynineties and this was partly facilitated bybooks like the Green Consumer Guide(Elkington and Hailes, 1988, Victor Gollancz,London).

However, a more radical ‘darker green’perspective on green consumerism might be:

‘Green consumerism means a great deal more than simply changing over from an earth bashing product to a slightly moreenvironmentally sensitive one. It meansquestioning both the nature and volume of our consumption’.

Source: Jonathon Porrit 1989 from ‘How to be Green’.

Discussion: key concepts


Socially conscious consumerism is a more all-embracing concept. It can be defined asthe buying or boycotting of products orservices against a set of social and ethicalcriteria such as excluding companies that areinvolved in trading with socially undesirablecountries, animal testing, nuclear and militarysales. The recognition of this wider ethos waspromoted throughout publications such as‘The New Consumer’, ‘The Ethical Consumer’and ‘Shopping for a Better World’.

What is sustainable consumption?

This does not necessarily mean consumingless. This may mean consuming differently and smarter – rather than necessarily reducing the consumption of goods and services – which may require substantialchanges in the way consumers behave, as well as changes in corporate activity.

What is the stakeholder concept?

The stakeholder concept refers to the idea that the operation of the firm is dependant ona number of inter-acting groups, the sum ofwhich is greater than its individual parts, which include:

Customers

Certain groups of customers increasingly want to buy from companies that havedemonstrably greener and socially responsibleoperations, products and services. This canbe reflected in consumer preferences and inthe purchasing criteria of companies and otherorganisations.

Shareholders

Many investors now accept that environmental excellence is synonymous with good management, and funds are flowing to companies that are workingtowards sustainable, environmentallyresponsible profits (eg. FTSE4Good andDow Jones Sustainability Index constituents).

By 2001 the volume of monies in green andethical funds was over £4 billion in the UK and$2 trillion in the USA. Changes to UK pensionlaw is now requiring companies to take aneven closer interest in the social andenvironmental performance of their pensionfund investments.

Business partners

Many suppliers are begining to realise that ifthey can demonstrate greener and sociallyresponsible operations this may increase theircompetitiveness in winning contracts withlarge progressive companies, especially thosethat have achieved ISO14001, EMAS andSA8000.

Employees

Employees’ creativity and enthusiasm can be harnessed to the benefit of the company if they are kept informed and involved inimproving environmental and socialperformance.

Community

People value their environment and look tobusiness to help protect it; business can winvaluable support form the community byresponding to local demands. In many casesspecial interest groups form to protect thesewidely diverse set of interests.

Government

Who have a responsibility to ensure thatsociety’s welfare, social and economic, is protected, which frequently involvesregulating consumer and business activity.

Those to come

One of the distinguishing features about a sustainable approach to business andmarketing is the consideration of the needs of future stakeholders. Unless businessactivities today become more sustainable,then the benefits enjoyed by customers andshareholders today, will be at the expense ofthose enjoyed by customers, shareholdersand other stakeholders in future.

The rise of stakeholder value

It is generally agreed that the primary aim of companies is to create and deliver value.The traditional focus has been on value forshareholders and to a lesser extent customersand other stakeholders. There is increasingrecognition that a successful firm deliversvalue for all its stakeholders and thischallenges the still entrenched view thatcompanies only exist to serve the, often shortterm, interests of shareholders. The businesscase for sustainability is becoming increasinglyclear and lies in its positive effect on businessvalue . Value is central to the concept ofsustainable development in that it is aboutcreating economic value while conservingenvironmental, cultural and other value. In asustainable system, businesses should meetmultiple stakeholder needs whilst minimisingnegative environmental and social impacts bymeans, for example, of value loops andnetworks retaining materials in the system andcreating new, fair employment opportunities.

Source: SustainAbility (2001), Buried Treasure:Uncovering the Business Case for CorporateSustainability, London: UK.

What is marketing?

Marketing can be defined both as a businessphilosophy, and a collection of managementtechniques, orientated towards providingvalue to consumers, organisations andsociety. While there are a range of views on the domain of marketing, all would agree thatits scope is much broader than sales oradvertising. The keystone of marketing is a customer focus :

‘Marketing is the whole business seen from its final result, that is from the customer’s point of view’.

Peter Drucker

‘Marketing is the management process for identifying, anticipating and satisfyingcustomer requirements profitably’.

The Chartered Institute of Marketing


“Marketing is thewhole business

seen from its finalresult, that is from

the customer’s point of view”

Peter Drucker

Companies vary in terms of what they focuson for success:

A production orientation

An emphasis on product standardisation andmass production, low unit costs and goodquality control, with marketing mainlyrestricted to distribution.

A sales orientation

An emphasis on advertising and personalselling to find new customers and markets,and to build sales volume.

A marketing orientation

An emphasis on researching pre-purchaseattitudes and on meeting consumerpreferences and repeat business throughcustomer satisfaction.

Generic marketing

Which considers the needs of all stakeholders,not just customers, in order to work effectivelywithin increasingly politicised markets.

Societal marketing

Which aims to generate customer satisfactionand long term consumer and public welfare asthe key to satisfying organisational goals andresponsibilities.

In recent years new concepts of marketinghave evolved which emphasise marketing as a physical system, and which focus onenvironmental as well as societal impacts.These include ecological marketing, greenermarketing and sustainable marketing.

What is ecological marketing?

The concept of ecological marketing wasdeveloped in the 1970s. It was particularlyconcerned with all products and productionmethods that:

· have served to help causeenvironmental problems

· may serve to provide a remedy to environmental problems.

It is the study of the positive and negativeaspects of marketing activities related topollution reduction and resource depletion.

What is greener marketing?

During the last 15 years some leadingcompanies have adopted greener approaches to marketing. ‘Greener Marketing’ can be described as:

‘A holistic and responsible managementprocess that identifies, anticipates, satisfiesand fulfils stakeholder requirements, for areasonable reward, that does not adverselyaffect human or natural environmentalwellbeing’.

Source: Charter, M, Greener Marketing: A Greener Marketing Approach to Business,Greenleaf Publishing, Sheffield, UK, 1992

Greener marketing reflects the emergence ofsignificant changes to traditional consumptionpatterns. There has been a growth inconsumers and businesses, using ethical and environmental criteria within at least someof their buying decisions. Companies thatrecognise this and offer an ethical or greenerchoice may provide opportunities fordifferentiation through organisational factors,rather that pure marketing factors, asconsumers, employees and investors seek to direct their efforts into positive areas.Individuals and businesses do not justbuy brands, but also buy companyphilosophies and policies. Increasingly,individuals will vote on environmental, social and ethical issues with their purchase,investment and employment decisions.

What is sustainable marketing?

Greener marketing is characterised by a focus on environmental issues, and by anemphasis on reducing environmental damage.Sustainable marketing is the next natural stepforwards, with an emphasis on progresstowards greater sustainability. It is a broadermanagement concept which focuses onachieving the ‘triple bottom line’ throughcreating, producing and delivering sustainablesolutions with higher net sustainable valuewhilst continuously satisfying customers and other stakeholders.

Discussion: key concepts


Sustainability recognises the inter-twining ofenvironmental, social and economic progressand well-being. Businesses, from the smallfirm to the trans-national, will need to acceptand develop responses to businesssustainability issues on a local, regional,national and international scale. As 3Mdescribed it, ‘business will need to accept amoral imperative towards planetary ecologicalproblems’. Sustainability encompasses a widerange of issues, some of the key ones include:

Population pressure

The world’s population has doubled fromaround 3 billion to over 6 billion in the last 50 years. The UN forecasts the addition of afurther 3.3 billion people between 2000–2050as the most likely future scenario. Only a rapiddecrease in the birth rate in the next decadecan halt the expected severe degradation ofour natural habitats, many of which are alreadyunder pressure. This will be most felt indeveloping regions where over 90% of theforecast population growth will occur andwhere environmental controls are still beingdeveloped.

Production and consumption

Population growth leads to increased levels of production and consumption. This isintensified by the fact that a growingproportion of the world has expectations for better material living standards and anincreasing number have discretionaryspending power. The growth in consumptionof energy, water and wood in particular iscreating concern about future social andenvironmental impacts.

Globalisation

The globalisation of trade has often beenproposed as a means of closing the gapbetween rich and poor nations and bettermeeting the world’s consumption needs.Practical experience is casting increasingdoubt on this. Individuals are becomingincreasingly aware of the North-South divide,the need for more sustainable development,the ethics of third world marketing and use ofchild-labour in out-sourced factories. Aspublic awareness increases, people arestarting to focus on the activities of trans-national corporations. The globalisationmovement is also targeting major brands suchas Nestle, Nike and Gap that are perceived notto be acting socially responsibly. Growth ofuse of the internet and access to global newsnetworks is moving us ever closer towards the concept of ‘the global village’.

Global warming and climate change

A quadrupling of carbon dioxide (C02)emissions over the last 50 years have raisedconcerns about the potential for globalwarming and climate change. Although theeffects of climate changes are difficult topredict accurately, climate-based impacts onindustries such as insurance and agricultureare already growing. To avoid irreversibleconsequences it has been internationallyagreed that two forms of preventive action arerequired:

· reduction of C02 emissions

· a ban on the use of chloroflurocarbons(CFCs).

Ozone depletion

CFCs and greenhouse gases deplete theozone layer letting through increased levels of harmful ultraviolet radiation, with potentiallydevastating health effects. The globalresponse has begun with the 1987 MontrealProtocol – but increased participation from allcountries is required to return the protectiveozone layer to its previous levels.

Acid rain

Air pollution as a result of sulphur dioxide (SO2) and nitrogen oxide (NO3) emissions leads to acidification and environmentaldamage, particularly to forests and lakes. Acid rain is also damaging to buildings, cars and even to human health. The USGovernment values the potential indirecthealth benefits of significantly reducing acid rain at over $50 billion annually.

Genetic engineering

The use of genetically modified organisms(GMOs) as a means of increasing crop yieldshas been suggested as an importantcontribution to reducing world hunger. Critics point to the potentially disastrouseffects that any mistakes would have, if there were unintended flows of genes and characteristics between species orunforeseen impacts on the balance of naturalsystems.

Loss of habitats and species diversity

Biological diversity is the wealth of life – plants, animals, micro-organisms and thegenes they contain. All this is maintained by a range of different habitats. Retaining thisdiversity is essential for many reasons. Itallows us to adapt crops and livestock tochanging conditions and to retain the yetunknown medical applications for many plant based compounds.

Key sustainability issues


“To create a sense ofcommunity amongst

practitioners,academics, policy

makers and studentswith an interest in

marketing andsustainability”

Why get involved?

In the short term taking a more sustainableposition may enhance corporate image anddevelop customer appreciation. However, it isessential to understand the firms’ direct andindirect environmental and social impactsbefore these benefits are pursued.Bandwagon jumping is a very dangerousactivity, and some companies with a veryrespectable record on social andenvironmental issues have been recipients of a ‘Green Con of the Year Award’ fromFriends of the Earth because they promoted a product as ‘green’ without proper researchor follow-through.

In the medium to long term, the generation of an honest sense of confidence will earn a competitive advantage if a consistentlyresponsible approach has been taken.

If managers do not develop a moresustainable stance there may be a longer-term problems in:

· marketing products

· keeping within the law

· recruiting and retaining able staff

· disposing of waste

· obtaining insurance

· attracting finance for organic expansion or acquisition

· maintaining shareholder confidence,company share price and therefore control of the company.

How should companies addresssustainability?

Business can either be responsive to the need for the better physical environment and improved ‘quality of life’ – or it can feel the eventual impact through consumer,shareholder and other stakeholder pressure.The question for the environmentally andsocially responsible company is: does itdecide what is ‘environmentally or ethicallyright’ or does it react to what externalstakeholders want and will accept?

As society and the business community beginto accept their moral obligation to pursuesustainable development, then companies will increasingly need to assess their positionon specific environmental and CSR issues.This will require an integrated approach across functional areas including marketing,production and the supply networks.Companies will need to develop a clearposition on sustainability issues if they are to attract and retain the support of newcustomers, employees, investors and otherstakeholders in order to sustain their owngrowth and future success.

Brands are becoming increasingly important in consumer markets, and a strong brand issomething that companies are keen todevelop, nurture and sustain. Increasinglysustainability issues are becoming linked toreputation management and ‘brand trust’.Within increased outsourcing and contractmanufacturing there is a need to be highlysensitive to societal and consumer concerns(eg. about GMOs), and seek to reduceenvironmental and social impacts withinsupply networks. A strong brand implies highvisibility and brings the threat of targeting bythe media or pressure groups following anysocial or environmental incidents or scandals.

Strategic implications


Companies will need to be aware that solvingone environmental or social problem maycreate a new set of problems or opportunities.It will be essential to recognise that ‘trade-offs’will occur and compromises may need to bemade in relation to a firm’s financial, social andenvironmental performance. Thereforesystematic intelligence gathering, monitoringand control systems must be established toensure corrective action is taken whennecessary. Companies will need to construct a ‘sustainability radar’ to pick up new issuesas they emerge, as well as monitoring existingareas of sensitivity.

Are there useful guides to businessand marketing sustainability?

The increase in awareness of environmentaland CSR issues has led to calls for newframeworks to understand and respond tothem. Although there are a range of standardsdealing with environmental and socialmanagement issues (eg. ISO14001, EMASand SA8000), compliance is often managed indifferent ‘silos’ in the firm. In response to this,Project SIGMA (www.projectsigma.co.uk) has developed a more holistic managementframework that aims to tackle the complexfinancial, environmental and social aspects of business sustainability. For marketers, aweb-based platorm has been developedcalled the Sustainable Marketing KnowledgeNetwork (Smart: Know-Net). This is a jointinitiative between The Centre for SustainableDesign (www.cfsd.org.uk) and BRASS atCardiff University (www.brass.cf.ac.uk) inassociation with J. Ottman Consulting(www.GreenMarketing.com) and VictoriaUniversity (www.business.vu.edu.au); withsupport from Centrica Plc.

Mission

Smart: Know-Net (www.cfsd.org.uk/smart-know-net) is a virtual and physical networkthat aims to facilitate discussion, create newideas, produce knowledge and disseminateintelligence related to marketing andsustainability.

Goals

Smart: Know-Net aims:

· to develop strategic discussion over the role and implications of marketing in progressing towards more sustainablesystems of production and consumptionwithin more sustainable societies

· to develop methodologies, tools andtraining for marketing professionals

· to disseminate new ideas, information and best practice that can contribute tomaking the discipline of marketing moresustainable

· to create a sense of community amongstpractitioners, academics, policy makersand students with an interest in marketingand sustainability.

Information

CfSD and BRASS have conducted research to determine useful links related to marketingand sustainability.

Services

Smart: Know-Net seeks to support marketingpractitioners interested in sustainability with:

· research

· conferences

· workshops

· e-discussion

· tools

· training.

A strategic response

Increasingly pro-active companies will look atpotential opportunities and threats arising fromthe sustainability agenda, when deciding howto position their companies in response, andhow rapidly they should attempt to make anychanges. Organisations will develop differentlevels of commitment to environmental andsocial matters dependent on their values and‘world view’. Much will depend on industry‘sensitivity’, corporate culture, seniormanagement commitment, competitiveconsiderations, brand considerations andcompany size.

Responding to sustainability issues can be an open-ended commitment, and even arelatively tactical ‘me-too’ response to matchcompetitors which can attract stakeholderattention and bring pressure for furtherchanges. Business should start toprogressively move towards a policy ofexcellence in environmental performance and CSR. This process will take time and assuch needs to be planned for, with appropriatetargets and resources. Companies may movethrough several stages (see diagram below).

As the company moves beyond consideringthe impacts of particular products andservices towards consideration of the impactsof the company as a whole, so it will need tothink differently about the company andtraditional organisational boundaries. Theinter-relationship of environmental and CSRconsiderations will affect each businessfunction in the organisation, and it will beessential that a holistic view is taken. This willalso involve broadening perspectives to takeaccount of the wider role of stakeholders in thedevelopment of more sustainable solutions.


Sustainable policy and

organisation

Single sustainable

product/service

Sustainable product/

service range

Sustainable production

All sustainableproducts/services

“The precise role of marketing inresponding to

sustainability issueswill vary among

companiesdepending on their

industry, size,corporate culture”

Pro-active organisations should take a numberof steps to move towards the goal of higherlevels of integrated sustainability performance,including:

· development and publication asustainability policy

· completion of appropriate environmental and social audits

· establishment of objectives and preparationof an action programme

· establishing board level responsibility

· allocation of adequate resources

· education and training

· monitoring the evolution of the business sustainability agenda

· development of sustainability performance metrics

· integration of environmental and socialinformation systems into managementinformation and control systems

· contribution to environmental and CSR programmes

· helping build bridges between parties with an interest in the firm’s social and environmental performance.

What is marketing’s role?

The precise role of marketing in responding to sustainability issues will vary amongcompanies depending on their industry, size,corporate culture and whether the style ofmarketing they practice is classicallycustomer-led, technology (product) led orcommunications focused. For companies inmarkets characterised by green pressure fromcustomers, marketers may lead the movetowards more sustainable products, servicesand strategies. In companies where thedecision to pursue sustainability is based moreon corporate values, or broader issues ofCSR, marketers may well be handed amandate to pursue sustainability through the revision and re-alignment of corporatestrategy. This may involve the marketing of the company in addition to more conventionalproduct related marketing.

To respond effectively, marketing as a functionneeds to address a range of questions fromthe broad and strategic, to the specific andtechnical. Some of the broad, corporate levelquestions that will need to be tackled include:

· has the marketing plan analysed theeffect of sustainability issues on companyactivities?

· has the company conducted marketresearch into the probable impacts on thefirm of sustainability issues?

· can the company modify existing products,services or processes to take account ofsustainability considerations? or will newinnovations be required?

· is the company developing positive links with environmental and human rightsgroups?

· do communications strategies accuratelyemphasise environmental and socialconsiderations?

Strategic implications


For companies, their brands and theirproducts or services to become moresustainable, and be perceived as moresustainable, it requires that a strategy is fully backed up by more than good marketing.It is essential that co-ordinated multi-functionalplans are developed, with clear objectives,strategies, programmes and resourcesnecessary for their effective implementation.Examples of key questions that will need to be addressed by other business functionsinclude:

Personnel

· what steps are being taken to increaseawareness of sustainability amongst keyinternal and external stakeholders in theproduct or service development/deliveryprocess?

· what part does sustainability play ininduction programmes for marketing and other business functions?

· has the company completed managementsecondments to environmental or humanrights organisations?

· has the company considered thedevelopment of a conservation group as part of the social activities?

· are employees encouraged to play anactive role in the local community?

· does the company have a good trackrecord on equal opportunities and human rights?

Operations

· is the company actively seeking cleanerproduction technologies?

· how good is the company’s record onwaste management and minimisation?

· what is the internal record on health and safety?

· does the company actively look at pollutionprevention measures?

· what methods are used to deal withpollution incidents?

Facilities

· have company cars been changed to lead-free petrol (or alternatives such asnatural gas)? Is it providing incentives forlow mileage?

· is telecommuting supported?

· are new cars fitted with catalyticconverters?

· is recycled paper being used?

· is recycling encouraged?

· does the company canteen provideorganic food?

Purchasing

· does the company conduct a sustainabilityscreen on new and existing suppliers?

· does the company examine the processesthat suppliers use to produce raw materialsor components?

· does the company examine the workingconditions of suppliers?

· are the suppliers investing in improvedenvironmental technologies?

· is the company actively examining the use of local suppliers?

· are more sustainable materials activelybeing sought?

· are partnerships being established tocreate smarter, cleaner materials?

Finance

· does the company have a sustainableinvestment policy?

· has the company considered the widerissues related to ethical investment?

· where is the company pension schemeinvested?

· are environmental and social implicationsbeing built into project costing systems?

· does the company distribute monies toenvironmental organisations?


“Electrolux’s ‘GreenRange’ of white

goods, which have alower environmental

impact, achieved a 3.5% higher

gross margin than the company’s

standard range”Source: Hedstrom, G, Shopley, J and LeDuc, C,

2000, Realising the sustainable developmentpremium, Arthur D Little

Developing more sustainable marketingstrategies can present novel challenges to marketers. It involves familiar activities such as the researching of customer needs,preferences and expectations and the analysisof the company’s ability to meet thoseexpectations compared to its rivals. It can also require new types of information onstakeholder attitudes to sustainability issuesrelevant to the sourcing, production, use ordisposal of the product. Key strategic choiceswill involve identifying markets that are likely togrow as a result of sustainability concerns, andproducts or services which can be positionedas market leaders in social or environmentalperformance within sensitive markets.Success in many markets will require a changein focus away from products towards servicesor total product/service packages, forexample, moving to offering sustainablemobility solutions rather that providing cars (ie. shifting mindsets to satisfying customerneeds through functional solutions rather thanthrough products per se).

Sustainable value, sustainablesolutions and sustainable productdesign and development

Sustainable value (the goal)

The aggregate of sustainability (economic,environmental, social) impacts of a product,service or system through its life cycle. Theseimpacts can be positive or negative and theaim is to continuously improve net sustainablevalue… there is a need to consider all theinternal and external elements in the valuechain. Sustainable Value is a stakeholderdriven process that focuses on delivering value to all stakeholders involved in creatingand delivering sustainable solutions.

Sustainable solutions (the output)

Products, services, hybrids or systemchanges minimising negative and maximisingpositive sustainability impacts throughout thelife cycle while fulfilling acceptable societalneeds. Sustainable solutions require multi-stakeholder engagement and involve shifts in consumption and production patterns.Changes may be incremental at the productlevel or radical if system shifts are needed.

Sustainable product design anddevelopment (the process)

The management process of integratingsustainability issues and impacts into thesolutions development process, from ideageneration through to launch and beyond. The aim is to maximise net sustainable valueand satisfy all customers, users as well asothers who have a stake in sustainablesolutions or the SPDD process.

Source: Charter M, Clark T (2002), SustainableValue, Greenleaf Publishing, Sheffield: UK.

Marketing strategy


How will sustainability affect theproduct life cycle (PLC)?

Traditionally, products are said to go through a series of life cycle stages from development,launch, to growth, maturity and decline. This is an economic view of a product’s evolutionbased on sales volume. It is also important tothink of the environmental and social impactsof the product over time. Life Cycle Thinking(LCT) should be used to evaluate thesustainability impacts of the product, serviceor system from ‘cradle to grave’ (ie. fromextraction, to manufacturing, to transport,through use and disposal). It is important notto confuse LCT with Life Cycle Analysis (LCA).LCA is one example of an environmentalevaluation tool that may be used in theproduct development process.

Nike for example have developed a five stageecological lifecycle for their sports footwear:

1 Research and design: where they aim to design in post-consumer materials and design out hazardous materials

2 Manufacturing: working with businesspartners to implement improvements such as their ‘Regrind’ technology to utilise exess mould rubber.

3 Retail: where box styles have been reduced from 18 to 2 and 100 percentpost-consumer recycled corrugatedcardboard boxes have been developed.

4 Consumers: The Reuse-A-Shoe schemehas already kept more than 7.5 million post-consumer and defective shoes out of landfills

5 Downcycling: where reclaimed shoematerial is recycled into sports surfaces like tennis courts.

Competitive advantage

A number of leading authorities, includingProfessor Michael Porter of Harvard BusinessSchool in the US, have championed the ‘win-win’ concept in which better socio-environmental performance leads to bettermarketplace performance. This can be bysuccessfully differentiating a product on thebasis of good environmental and socialperformance. It can also arise from costsavings or design innovations which accruefrom the process of trying to reduce thematerial and energy usage, and the pollutionand waste associated with a product orservice.

Electrolux’s ‘Green Range’ of white goods,which have a lower environmental impact,achieved a 3.5% higher gross margin than the company's standard range.

Source: Hedstrom, G, Shopley, J and LeDuc, C(2000), Realising the Sustainable DevelopmentPremium, Arthur D Little.

Physical product or service attributes outsidebasic functional characteristics may becomeless important, especially in mature marketswith many ‘me-too’ products. Differentiationmay start to arise outside the basic brandthrough ‘sounder’ processes, policies andphilosophies – it will be increasing important to get the ‘back office’ in order to addressincreasing stakeholder concerns about the‘world behind the product’. Before anydecisions are made the total product andservice portfolio must be examined forenvironmental and social risks. The overallimpact on the organisation of the provision of a combination of sustainable and non-sustainable product/service offerings must beconsidered, including the short, medium and long-term implications.

The Cooperative Bank has gained 205,000customers, and continues to grow, largely dueto the explicit ethical policy launched in 1992.Its position is cited to be a powerfuldifferentiator that creates tremendouscustomer loyalty.

Source: Hedstrom, G, Shopley, J and LeDuc, C(2000), Realising the Sustainable DevelopmentPremium, Arthur D Little.

Research

Tokenism towards environmental and socialissues will not be tolerated. If companies areperceived as not ‘walking the talk’ theirattempts to generate competitive advantagecan do more harm than good. Companies thatcome in for criticism often do so, not becausethey were attempting to mislead or gain anundeserved advantage, but because theirapproach to environmental and social issueswas ‘one dimensional’ or not well enoughinformed. Research is vital to identify the keyissues as they affect the firm, and providecorrect information and advice, given theexisting scientific knowledge. Prior to launch,products and services should be thoroughlyresearched and tested, as many of the issueswill be complex and dynamic.

Questioning should consider areas such as:

· does the new product or service fulfil a realcustomer need? is it really more sustainablethan existing alternatives? what specificitems have been altered to ensure thatproduct or service is more sustainable?

· what steps have been taken to ensure that the product or service lessens negativeenvironmental and social impacts andenhances net sustainable value?

· is the product or service likely to be stillacceptable within the next 3–5 years? or will it need to be adapted?

· has thorough primary research beencompleted? are Sustainability InformationSystems established? are they integratedinto a Marketing Information System (MKIS) or an overall Management InformationSystem (MIS)?


“MORI completed a survey of 1,935British adults and

found that during thecourse of the survey,that 30% had boughta product or service

because of a link to a charitable

organisation, while28% had boycotted

a company’s producton ethical grounds”

Source: Adkins, S, (1999), Cause-related marketing:who cares wins, Oxford: UK, Butterworth.

Business sustainability is a holistic concept –and many firms are uncomfortable with this,preferring to keep environmental and CSRissues separate. Sustainable marketingrequires an aware, open and targetedapproach to environmental and social issueswhich takes account of all direct and indirectstakeholders. Companies embarking onenvironmentally and socially related strategiesneed to debate the total effect of launching a more sustainable product or serviceprogramme. Heightened media attention islikely to focus attention on the company’sother market operations and on the company,in general. This means there is a need toconsider the environmental and social impactsof products and services from ‘cradle to grave’– from procurement of materials, manu-facturing, to distribution, consumption anddisposal (or reverse engineering) – both froman environmental and social point of view. It also means that all the aspects of themarketing mix need to be considered,although the emphasis across the mix willchange dependent on the company, itsproduct or service portfolio, its markets and its particular circumstances.

Product

Products and services offered will need to bemodified and adapted to changing customerattitudes and tougher legislation. In somecases firms may need to work with variousstakeholders to bring about changes in theoverall consumption system, not simplychange corporate activity.

MORI completed a survey of 1935 Britishadults and found that during the course of the survey, that 30% had bought a product or service because of a link to a charitableorganisation, while 28% had boycotted acompany’s product on ethical grounds.

Source: Adkins, S, (1999), Cause-related marketing:who cares wins, Oxford: UK, Butterworth).

What are sustainable product or servicecharacteristics?

· designed to satisfy a genuine human need

· not harmful to human health

· greener throughout the life cycle.

Desirable in the ‘Age of Sustainability’ should be:

· energy efficient (ie. reduced CO2 emissions)

· non-polluting

· easily repairable

· designed to last

· re-usable and recyclable

· minimised packaging

· manufactured from renewable resources.

· removal of hazardous materials

· manufactured from locally sourcedmaterial, to minimise transport costs

· provision of sufficient information

· not tested on animals

· no use of ‘child labour’ in manufacturing(in-house or contract)

· no use of ‘forced labour’ in manufacturing(in-house or contract).

Making ‘the mix’ more sustainable


Varian: financial benefits of greener products

Background

Varian Medical Systems Ltd, a UK basedmedical equipment manufacturer, used an approach pioneered by its US parentcompany to help green its products. Thisapproach is known as ‘design for valuemaximisation’ (DfVM), which uses:

· cross-functional teams to stimulateinnovation

· life-cycle design considerations ofmaterials and components used

· process mapping of the manufacturingprocess to identify all costs

· activity-based costing to allocate costs to the specific activities that ‘drive’ aproduct instead of assigning costs of labour materials and overheads.

Environmental and other benefits that resultedfrom implementing the DfVM approach:

· 65% reduction in overall part count from1,392 to 490 parts/unit

· the number of fasteners in one key product(collimators) cut by 29% from 905 to 644

· electroplated fasteners replaced bystainless fasteners

· steel inserts removed from aluminiumcastings

· a more modular design, allowing easierupgrading to extend product life

· breaking down departmental barriers,fostering a more proactive approach to product development.

Source: Electronic equipment manufacturer benefitsfrom cleaner design: a new practice case study atVarian Medical Systems UK Ltd, (September 1999),NC201, ETBPP (now Envirowise), Oxford: UK.

Checklist for a sustainable solutions developer

The sustainable product or service developermust take into account changing attitudes anda tougher legislative regime in many countries.

· could the product or service be cleaner?

· can it be more energy efficient?

· could it be quieter?

· could it be more intelligent?

· what happens when it’s useful life ends?

· could it find a secondary market?

· can it be designed for re-usability?

· can it easily be repaired?

· can its life be extended through regular maintenance?

· can it be rented or leasing?

· is shared ownership an option?

· could higher levels of service be added?

How can the development ofsustainable solutions be encouraged?

Companies should develop an active re-investment policy for research anddevelopment into sustainable products and services, and encourage sustainableinnovation, creativity and collaboration. If anew product or service development system is operative, a percentage of the budgetshould be allocated solely to the creation ofsustainable product or service pilot projects,both in relation to new solutions, as well asmodifications to existing products or services.If a formal system is not established it may beworth encouraging employees to generateideas for more sustainable solutions bydeveloping extra incentives for sustainableinnovation and creativity. Integral to theapproach should be an active sourcing of new sustainable materials, with continuousauditing of suppliers.

Where does ‘resource recovery’ fit in?

Developing more eco-efficient products willrequire the development of ‘resource loops’ in which materials are recovered and reusedwithin the system. The success of recyclingschemes is dependent on the secondary re-sale of the material. To be cost effective,government will need to intervene to helpstimulate the market for recycled materials,and encourage higher levels of corporate and local authority investment.

For companies, recycling can be used to save money, generate revenue and improvecommunity relations. Recycling schemes are often most successful when operated in partnership with local authorities, localpressure groups and schools.

There are three key approaches:

· reuse systems, for example, returnable containers

· special resource recovery systems for papers, cans or bottles

· general resource recovery throughseparation and energy recovery.

In the future companies are likely to berequired to establish ‘take-back’ systems for packaging, electronics, automobiles andother products – and this is already happeningin certain more environmentally advancedcountries. However this will mean thatcompanies will have additional opportunitiesto develop relationships with customers andothers in the reverse supply chain. It must beremembered that while the firm is a producer,they are also a consumer of products andservices and their own purchasing andconsumption behaviours needs to beexamined as well.


“Design forreparability should be encouraged in

product design and returns data

should be collectedand analysed toenable products

to be modified and improvedcontinuously”

How does customer service fit in?

Through encouraging and educatingcustomers, the company is likely to stay closerto changing attitudes and an open, honestpolicy will increase customer confidence andtrust. The emphasis of customer service andcustomer care policies should be on quality,problem solving, reliability, after sales service,speed of delivery and courtesy. This may infact transform individuals from consumers ofproducts, where they own products, toconsumers of services where they purchase‘need satisfaction solutions’ rather thanproducts per se. This focus could lead, forexample, to the development of more durableproducts with the loss of repeat business from a greater emphasis on product longevitycompensated for by increased revenues fromthe servicing. Some companies alreadyprovide ‘platforms’ free and make moneythrough maintenance and upgrading services.

Design for reparability should be encouragedin product design and returns data should becollected and analysed to enable products tobe modified and improved continuously.

Bristol-Myers Squibb is an example of acompany that provides information and toolsrelating to environmental health and safety as a part of their commitment to sustainabilityand customer support. Customers, forexample, can download a guide to bestpractice and innovations in health careenvironmental management from their web site.

Packaging

Packaging has been on the front line in‘marketing and environment’debates. Various challenges are faced by packagingbecause:

· it is immediately noticeable as litter

· it is considered wasteful by the finalconsumer

· food scares have been associated withvarious forms of packaging

· plastic is perceived to last forever

· landfill sites are increasingly scarce and expensive.

· card and paper may wrongly be associatedwith destruction of rain forests.

The issue of packaging is high on the list ofconsumer’s environmental concerns and isbecoming a major issue for both retailers andmanufacturers due to the EC PackagingWaste Directive.

Key packaging issues vary between producttypes but seven general demands can bestated:

· product protection – throughout the distribution chain

· cost efficiency – contributing to reducedproduction and distribution costs

· product quality – retaining quality duringstorage and distribution

· tamper evident – providing assurance that package is not already opened

· information – necessary to meet legalrequirements and consumer demands

· shelf appeal – providing a final incentive to buy (as consumers’ environmentalawareness increases this may mean less or minimal packaging)

· environmental safety – to safeguard the future environment.



Key questions that need to be asked in relationto any form of packaging include:

· is the packaging necessary?

· is the packaging used safe? Is itbiodegradable, photodegradable, natural, reusable or recycled?

· is the packaging primarily functional? is it exceeding its requirements for storage,transport and use?

· do we need individual single-portion blister packs?

· are alternative forms of packagingavailable?

· how might packaging be recycled or reused?

An example of a successful packagingreduction was Warner-Lambert's USMouthwash Waste Minimisation Initiativewhich aimed to:

· minimise consumer and transportpackaging waste by redesigning theconsumer packaging and by using reusable or recyclable transport packaging

· minimise production waste by continuouslyimproving process efficiency and followinggood operating practices.

A key change was made to replace the paper-wrapped glass bottle with a polyethyleneterephthalate (PET) bottle, and replace thebatch mixing process with a continuousmanufacturing process and automatedpackaging line. As a result:

· 59,307,500 pounds of solid waste wereeliminated during 1995 by redesigning the consumer packaging for mouthwashproducts

· $1 million dollars was saved in avoided disposal fees by eliminatingpackaging waste

· approximately 136,400 pounds oftransport packaging waste was eliminatedduring 1995 by changing from single-use to reusable shipping containers for bottlecaps

· flammable liquid waste declined 27% from 1994 to 1995.

What is the best packaging?

There is no one best form of packaging – it depends on the function of the package,however the four main types of packaging are briefly evaluated below:

Glass

This is claimed to be the best as it has beenrecycled for many years and is the mostestablished form of recycled packaging. It suffers by comparison with plastic on thebasis of how many containers can betransported on a lorry at one time, and theresulting implications for transportation andenergy consumption.

Cans

These are usually steel or aluminium, both ofwhich can be recycled separately. One of thebiggest problems, is the lack of infrastructure.The new style drinks cans, with the ring pullattached, are greener in that the pull is notseparated form the can. The cost of recyclingaluminium is approximately 5% of the cost ofusing virgin material and thus is a viablealternative.

Plastics

Not only is plastic difficult to dispose of, it also causes pollution in manufacture and isbased on the finite resource of oil. The mainadvantage it that it is light, cheap and easy totransport. New plastics are being developedand biodegradable plastics are now available.At present this is still relatively expensive andopposed by environment groups, because itcould damage the output of plastic recyclingoperations. Recycling of plastics is alsoavailable, although there is a need toundertake sorting to maintain quality levels.

Card and paper

Card and paper tends to be produced formrecycled paper waste and Canadian andScandinavian coniferous forests grown for thepurpose. This form of packaging is biodegrad-able. However it is associated with litter, takesan unknown time to break down and mayleave toxic residues. While recycling is readilyavailable it does also involve other changes tomarketing, such as using lead-free inks.

Price

Price is a key element of the sustainablemarketing equation. Traditionally economictheory has dictated that many environmentaland social costs are treated as ‘externalities’and not included within existing marketstructures. This means that external costs,such as those linked to pollution, are notreflected in the prices of the products that webuy, or the cost accounting of the companiesthat produce them. This situation is graduallychanging. Many of these ‘external’ costs arenow having a price attached to them bylegislation and stakeholder pressure.Legislation is making companies moreresponsible for emissions and the use of newfiscal measures such as carbon taxes is alsoincreasing costs for business. If theGovernment increases the relative price ofnon-green products it may encourage thepurchase of more beneficial substitutes.

How much will greening affect costs?

Many of the costs of environmental protectionhave never been included in conventional costaccounting. In the short-term, costs of newercleaner production processes may be passedonto customers, even though over timeconsiderable cost savings can be achieved.Since society as a whole bears the costs ofexternalities, this potentially givesenvironmentally irresponsible actors a short-term cost advantage. Industries have oftenlobbied against environmental legislation onthe basis the increased costs will lead toreduced competitiveness and loss of jobs. It is worth noting that the predictions of doomthat have accompanied environmentallegislation in industries such as cars andaerosols have usually proved to beexaggerated. In practice firms have often beenable to mitigate forecast cost rises throughinnovation and efficiency improvements.


“Surveys worldwidehave indicated

that people will paymore for greener

products, howevermanufacturers

should be careful notto exclude market

interest throughpremium pricing”

For example, Dow Chemical developed theWRAP Programme (Waste Reduction AlwaysPays) and 3M, the 3P policy (PollutionPrevention Pays) which has saved them over$482m (April 1989). These pro-activecompanies have committed themselves tomajor waste reduction programmes, whichhave created huge savings, compensating for initial capital outlay.

How price sensitive is the green market?

Surveys worldwide have indicated that people will pay more for greener products,however manufacturers should be careful notto exclude market interest through premiumpricing. There is typically an action/awarenessgap in consumer markets, with expressedconcern not matched by the levels ofpurchasing at the checkout. Whenconsidering setting pricing strategiescompanies must ensure that products orservices perform as well or even considerablybetter than less sustainable alternatives onperformance, quality, functionality – it is then that improved sustainability performance will act as a key differentiator.

More sustainable prices

Pricing decisions have the capability of helpingdirect the flow of consumption into sociallyand environmentally useful areas. The realchallenge is translating environmentalimprovement into value for the consumer, or at least into a value proposition that they arewilling to pay for. There are a number of waysthat pricing decisions can demonstrate acommitment to sustainability. These include:

· GivingA proportion of the price can be openlylinked to environmental or social causes or indirectly distributed to social andenvironmental causes via membership ofinstitutions such as ‘The PerCent Club’.

· Partnership pricingPrices also express market power, and insome markets the power of customers todrive down prices can drive suppliers out of business or towards unsustainablepractices. In Japan, the Seikatsu Club hasdemonstrated that a close relationshipbetween its member and organic farmerscan lead to consumers setting prices inconsultation with the producers.

· DemarketingPrices can be raised to reduce theconsumption of environmentally sensitiveproducts. Price increases can be used toreduce energy consumption or to reducethe flow of tourists to unique and vulnerablehabitats, or attractions which are in dangerof being overwhelmed (eg. MadamTussauds in London has used priceincreases as a de-marketing measure).

· Green tariffsIn the UK electricity industry,environmentally concerned consumers can opt for a ‘green tariff’ from manysuppliers. This costs about £18 per yearmore for a typical family, but ensures thatthe energy purchased on the customer’sbehalf comes from more sustainablesources.

· Alternative pricingThe Local Exchange Trading System (LETS) has been established in severalcommunities around the world. LETS is aself-regulating approach, which allows itsmembers to issue and manage their ownmoney supply within a bounded system.There is a strong incentive to economicactivity, because each transactionrepresents local skills and resourcesmeeting local needs.

A UK variation on LETS was developed byPractical Alternatives called Green Economy.The aim was to develop a nationwide networkof local economies based on human skills with people and small businesses buying andselling with ordinary money, or green poundswith payments made by credit transfer; thebuyer trades with the seller who trades withthe Green Economy. The seller’s account is then credited and the buyer’s account is debited.



Place

The physical distribution, wholesaling andretailing of products and services has bothdirect and indirect environmental impacts.These can be lessened through careful andprudent management. Place not only involveswhere consumers purchase goods, but alsoincludes the movement of goods within thefirm. As the environmental costs of fossil fuelsare more accurately reflected throughmeasures such as the climate levy, sodistribution systems may return to a focus on more localised production and distribution systems.

Can the physical distribution process be greened?

· where is the company located? How canthe environmental impact be lessened?

· how close are facilities sited to suppliers,wholesalers and retailers?

· have third party distributors implementedgreener policies?

· can physical distribution be planned toreduce mileage, and hence cut down on airemissions eg. CO2?

· are transport planners examiningopportunities to encourage the use ofrailways over roads, and efficient routeplanning to reduce energy use andtherefore air pollution?

· are suppliers’ vehicles fitted with catalytic converters?

· how often are suppliers’ vehicle engines tuned?

· what efforts are being made to cut downon noise and air pollution for vehicles?

Have retailers conducted an environmentalreview, covering areas such as:

· suppliers, eg. growers, foodprocessors and manufacturers

· warehousing, transport and otherdistribution operations

· store management, including energyefficiency measures

· waste management and recyclingcompanies.

Are retailers encouraging the development of a recycling infrastructure? how far do theywant to get involved?

· reuse systems (eg. returnable containers)

· separation at a resource recovery centre

· what are the implications for townplanning?

· are retailers considering energy recovery systems?

Retailers should encourage the active use of recycling facilities in conjunction with local authorities, local pressure groupsand schools, for:

· batteries

· textiles

· compostable materials

· CFC recovery from refrigerators.

The issue of reverse logistics (establishingsystems to assist in the recycling of materials)might also be considered under the discussionof place. In considering reverse logistics it isimportant for firms to consider the followingpoints:

· recognition – monitor goods so they flowthrough the reverse logistics process

· recovery – collect goods for reprocessing.

· review – test materials to evaluate whetherthey meet appropriate reprocessingstandards or might be disassembled for parts or disposal

· renewal – re-manufacturing the product up to its original standards or claimappropriate parts for reuse

· removal – dispose of materials that cannot be remanufactured and market theremanufactured goods to new or existingcustomers.

· re-engineering – evaluate if existing goods can be better designed.

Verizon (formed by the merger of former BellAtlantic and GTE) set up a Logistics RecoveryOperation to recover and reuse materials. In 9 regional centres across the USA, obsoleteequipment is sorted and either sold as used,or dismantled for parts and materials to berecycled. During 2000 Verizon gained$500,000 in additional revenue and reduceddisposal costs thanks to these efforts.

Individual processing facilities dealt with asmuch as 32 million pounds of material, andachieved rates as high as 98% for eitherreselling it as reusable product or recycling it.


“A variety ofapproaches can betaken using a range

of promotionalmedia, but the keywatchwords for allcommunication is

that it must beappropriate,

consistent and co-ordinated”

Promotion

The company should develop an integratedcommunications approach that includes‘company-specific’ and ‘product specific’aspects of environmental and CSR matters.The strategies and claims made by the firmmust be based on sound research andinformation. Information must becommunicated consistently to customers and other stakeholders, and companiesshould be wary of any claims or com-munication that could be viewed as hype.Consumers, pressure groups and the mediaalready form a critical audience. If claims areinaccurate and unsubstantiated then negativepublicity will be attracted. Claims which areover-ambitious, vague or which do not have agood sense of ‘synergy’ with the product andcompany have been shown to risk damagingcustomer perceptions.

Claims should be checked with customers,scientists and other stakeholders in ‘civilsociety’. Alleged environmental benefitsshould be scientifically accurate. Marketingand environmental managers, copywriters andgraphic designers must be made aware of theissues and systems should be established totake account of new information.

During the 1990’s AEG used advertising whichplaced their domestic appliances in an‘ecological’ setting, and which focused on keybenefits such as saving water and energy andreducing noise. In 1995 when applied to anewly launched dishwasher range, it createdan unprecedented rise in AEG’s home marketof 38%. By 1998 German women named AEGas the most ‘sympathetic’ brand overall, andAEG have benefited from a distinctive andstrong brand image in a crowded Europeanmarket.

Developing campaigns

Whatever the nature of the company and itsproduct or service, if a promotional strategy isbeing developed based around environmentaland social issues, then a number of generalquestions need to be asked including:

· has market research been conductedto define the size, characteristics andbehaviour of target market(s) and otheraudiences?

· what balance of emphasis is requiredbetween corporate-level communicationand product/service communication?

· is the company aware of guidelines and projects on greener advertisingpractice – including eco-labelling and green claims?

· do consumers understand what eco- and energy labelling programmes mean?

· how informative is labelling? should thecompany be considering ISO type I, II or IIIlabelling?

· how careful is the company aboutdistinguishing between terms, eg. recycled and recyclable?

· is the company incorporating positiveactions being taken on environmentalissues through photographs, illustrations or copy? are the images used appropriate?

· does the promotional mechanism containcorrect information on the company’scontribution to the environment and society?



· do the firm’s advertising, direct marketingand market research agencies understand‘the issues’?

· should the organisation be examiningagencies that are taking positive initiativeson the environment and CSR?

· what communication tools should beconsidered?

· have agencies completed businesssustainability projects?

· how knowledgeable are the company’sprinters and designers on green issues?

A variety of approaches can be taken using a range of promotional media, but the keywatchwords for all communication is that it must be appropriate, consistent and co-ordinated.

Media advertising

· what newspapers, magazines, televisionand media cover your target markets? whatother business interests do they have?

· are environmental and social campaignsscrutinised carefully before being launched,how can claims be verified, and who canprovide substantiation?

Literature

· have the needs of the target audiencebeen sufficiently researched and defined?

· does the company have a clear view of the target audience’s understanding of the issues?

· have company stationery and brochuresbeen changed to paper and board fromsustainably managed forests? does thecompany understand the argumentsrelated to pre-and post-consumer waste?

Public relations

· has the company developed a clearcommunications approach for itsstakeholders?

· has the company understoodstakeholders’ concerns on the issues?

· has the company conducted any notableenvironmental or CSR projects?who should be told about it?

PR agencies will want to promote companies’CSR efforts because they are seen tocommunicate something about the characterof the company. But PR practitioners must becautious because the exploitation of CSR maya raise range of questions over the moralmotivation of the programme. The task of PR should be to ensure that CSR andbusiness sustainability is truly representative of the organisation and that the imagematches reality.

Sponsorship

Sponsorship is a flexible targeted approach,with direct environmental benefits to both the company and the environmental or socialgroup supported. Any sponsorship projectshould be co-ordinated with other elementswithin the communications mix to ensure thebest results. While these are usually designedto promote links between the firm and anenvironmental or social issue, there should be some logical association between the two.

Sponsorship can take many forms:

· providing money or land to conservationprojects

· providing secondees, equipment or trainingto environmental, conservation, or humanrights organisations

· linking purchases to donations

· contributing to local community activities

· contributing to infrastructure or communityprojects in developing countries.

Customers are likely to react positively tohaving their collective purchasing power put to good use.

Diageo reported that between 1994 and1998, 22 cause-related marketing projectshelped to raise 600,000 UK pounds forcauses while increasing sales of trackedbrands by 37%.

Source: Business for Social Responsibility, (2000)


“Diageo reported that between

1994 and 1998, 22 cause-related

marketing projectshelped to raise

£600,000 for causes while

increasing sales of tracked brands

by 37%”Source: Business for Social Responsibility, (2000)

Personal selling

Within marketing, personal selling is animportant tool for some types of products or services, especially in ‘business tobusiness’ (B2B) markets. As such when tryingto market sustainable products and servicesto other businesses it is essential that thoseinvolved in the marketing of these products or services understand the complexities ofsustainability and what it may mean forpotential customers. It is important forsalespeople to be educated in the issues toenable them to communicate the benefits ofthe sustainable products and services in a waythat is meaningful for each customer ororganisation.

· are the salesforce developing relationshipsor selling one-off products?

· are policies to promote ethical behaviourwithin the salesforce in place, monitoredand enforced?

· do the salesforce understand thecompany’s sustainability policies?have they received any training?

· has the car fleet been converted to catalytic converters? are thereopportunities to provide ‘sustainabilitymobility’ packages?

· has the company developed a policyover the acceptance and distribution of business gifts?

· are the salesforce being given incentives to positively promote sustainable productsor services?

Lex Vehicle Leasing has recognised thecentral role that its sales staff will play in itsstrategy of reducing the CO2 emissions fromtheir car fleet by 33% by the year 2008, sayingthat success is dependent on personnel beingfully conversant with company policy on‘clean’ vehicles and the reasons behind it.Lex’s salesforce is being trained on all aspectsof clean‚ vehicles, including theirenvironmental benefits; availability;technologies used; infrastructural supportneeded; and costings.

Direct marketing

Greening of direct mail is a valuable way toreduce paper and therefore environmentalimpact and costs. The development of email,internet and website communications meansthat marketers can provide more targetedinformation to customers and as such allowfor more effective two-way communication.

· should your organisation consider e-mail marketing?

· is telemarketing and fax marketingappropriate?

· are bulky multiple mailings necessary?

Exhibitions and conferences

· does the company have the resources to develop in-house exhibitions,conferences and seminars?

· how can video conferencing and newforms of telecommunications technologybe used to compliment conventionalcommunications?

· can exhibition stand materials be mademore sustainable and reusable?



People

An integral part of business sustainability is to remember that ‘people are the business’and they have to implement change. Anyorganisation that embarks on the process ofmaking itself more sustainable is likely to facea difficult and turbulent time. It will mean thatprojects will need to be looked at in differentways, and inter-disciplinary skills will beneeded.

Implementation of strategies and policies, will be more likely to succeed if employees areinvolved in decision-making, and are given asense of ‘strategy ownership’. Therefore toensure that management and staff acceptprojects, internal marketing programmesshould be carefully introduced and monitored.Initiatives should be clearly communicated tostaff, who should be made aware of the issuesthrough presentations, workshops, internetresources and newsletters, and encouragedto participate in environmental and socialprogrammes.

It is important for companies to recognise that although their workforce might be quitehappy to endorse such programmes, that theconcept of sustainability and many of theissues that are central to it are not yet widelyunderstood throughout society. This meansthat it is just as important to inform andeducate the workforce about keyenvironmental and social issues, as it is tocommunicate professionally about thecompany’s response and the importance ofsupporting it. The process of tackling theseissues on an ongoing basis should lead tothem being interwoven into corporate strategyand culture, for example by introducingsustainability issues into recruitment and training programmes.

Sustainability strategies and plans can betreated conceptually as products with theirown marketing mixes. Once the strategieshave been communicated, organisations mustencourage a change in attitudes andbehaviour, as well as providing the necessaryhuman and financial resources to effectivelyimplement programmes. This is often the areawhere good intentions to improve corporateenvironmental and social performance canfalter in the face of the entrenched corporatecultures and the conventional pressures ofshort-term targets for sales, profit and shareprice.

A research project conducted by Arthur D.Little examined why a number of majorcompanies who had developed a competitiveadvantage from good environmentalperformance, including Warner-Lambert,Apple and ABB, later seemed to run intoproblems with their greening strategies. The project concluded that once the easiestimprovements in energy reduction and wasteelimination had been completed, initiativesthat required more significant changesstruggled for acceptance with topmanagement. The conservatism of corporatecultures was part of the problem, but alsosignificant was the tendency of thoseresponsible for environmental strategies to failto link their work to business strategies andbenefits, and to frame their strategies in termsthat other managers could relate to.

Source: Robert Shelton, R (1994), ‘Hitting the GreenWall: Why Corporate Programs Get Stalled’,Corporate Environmental Strategy, 2 (2).

Management must increasingly recognise the inter-relationship of ‘people, profits andplanet’. It is the companies that develop this approach that will attract and retaincustomers, investors and employees into the next millennium.


“Access toinformation will

become increasinglyimportant and formal

initiatives such as the Global Reporting

Initiative will have akey role to play”

Developing more sustainable strategies thatembrace environmental and CSR issues is asignificant challenge. The key watchwords for a successful strategy are as follows:

Holistic

Although efforts to improve the environmentaland social performance of a firm can be led by its marketers, top managers orenvironmental function, ultimately it needs to be a holistic response involving all of thecompany if it is going to succeed.

Externally focused on stakeholders

Companies that are able to prove themselvesto be sensitive and responsible to environ-mental and CSR issues are more likely to bethose that are going to be successful in anincreasingly sensitive, globalised, fast movingand uncertain business world. Part of thischange will be a trend towards demand bycustomers for products and services that areenvironmentally and socially less harmfulthroughout their life cycles. Making businessmore sustainable will present bothopportunities and threats, but companiesneed to be attuned to the development of thesustainability agenda to spot and react tothem.

Internally value-driven

Existing approaches will need to be adaptedto encourage individuals to buy and invest in a more sustainable manner. But enlightenedstrategic decisions will only emerge from adeeper re-examination of corporate ethics,philosophies and policies. Althoughcompanies can pursue sustainability on thebasis of the business benefits, researchsuggests that it is the companies who believein both the ‘business case’ and the ‘valuescase’ that are the most successful in securingthe benefits. Initiatives motivated by a searchfor good PR are a very risky strategy,vulnerable to internal whistle-blowing andcriticism from the media and pressure groups.

Beyond products

Broader questions concerning the formulationof products and the processes used toproduce products will increasingly be asked.Taking a pro-active stance on environmentalresponsibly and CSR will mean anticipatingchange and introducing if before it is madenecessary. To develop more sustainableproducts and services, companies will needto invest a considerable amount of effort tochange their supply networks and their in-house or contract manufacturing systems.Therefore, the results of some of today’s R&Dare unlikely to be seen for several years. Forexample, for products to be designed to berecycled, rather than disposed of in landfill,there will need to be a considerabledevelopment in existing recyclinginfrastructure. In addition, developingproducts that are easier to dismantle willrequire the re-education of many productdesigners and engineers to think about the‘end of life’.

Implications


The future

Partnership-based

Companies developing strategies of co-operation and collaboration will be those that are more likely to be successful - as sustainable solutions will require new forms of partnership. Partnerships may need to be formed with rivals to solve mutualenvironmental and social problems, withsuppliers to reduce impacts, with customersto develop new ways to meet needs or torecycle materials, or with former critics todevelop innovative solutions to long-standingproblems.

Open

One of the key themes of sustainability andCSR is accountability. Access to informationwill become increasingly important and formalinitiatives such as the Global ReportingInitiative will have a key role to play.

Social and environmental

Sustainability needs to be understood as anagenda that embraces social and economicas well as environmental issues. Improvedunderstanding of social impacts of productsand services alongside eco-efficiency will bethe new agenda for sustainable solutionsdevelopment.

Future-orientated

Sustainability means thinking about futurestakeholders, and the pressures that will flowfrom current stakeholders in future. Thepresent younger generations are receivingconsiderably more environmental educationand the ‘baby boom’ generations are startingto move into positions of influence. Youngerpeople are becoming increasingly consciousof sustainability issues through internet, globalnews networks, and world travel. It will be thisgroup within the next 10–20 years that will become key change-makers asconsumers, employees and investors.Companies will need to recognise and adaptto changing values if they are to survive andsustain their development into the nextmillennium.

This booklet has been compiled to extend thedebate over a set of emerging ideas that willbecome increasingly important. Responsibilityfor environmental and social impacts willbecome an increasing concern for people inrelation to business, whether as an employer,employee, investor or customer. Businessmust develop a proactive response and graspthe opportunities that these developmentspresent, or else competitive advantage will be lost. Marketing has a key role in thesustainable consumption and productiondebate. Marketers have been tremendouslyeffective in promoting unsustainableconsumption in the past, they now have theopportunity to make a real contribution topromoting more sustainable consumption and product development in the future.

Many aspects of sustainability will mean re-examining some of the traditional principles of management and marketing, leading us tonew types of stakeholder relationships, cleareraccountability and openness, and higherlevels of innovation and co-operation. Tosurvive and prosper companies and marketerswill need to be able to identify sustainabilitywaves, design and build a new type of surfboard and then learn how to ride it!


Martin Charter

Martin is the Director and Visiting Professor ofSustainable Product Design at The Centre forSustainable Design at The Surrey Institute ofArt & Design, University College. Since 1988,he has worked at director level in 'businessand environment' issues in consultancy,leisure, publishing, training, events andresearch. Prior to this he held a range ofmanagement positions in strategy, researchand marketing in gardening, construction,trade exhibitions, financial services andconsultancy including being a foundingDirector of Greenleaf Publishing and Marketing Director at the Earth Centre.

Martin is the former coordinator of one theUK’s first green business clubs for SMEs andpresently also directs a regional networkfocused on ‘producer responsibility’ issues.He is presently editor of the Journal ofSustainable Product Design and was theprevious editor of The Green ManagementLetter and Greener Management International(where he retains Editorial Board involvement).Other responsibilities include a member of theJudging Panel of Design Sense and ACCA’scorporate environmental reporting awards,member of ISO and BSI groups on ‘IntegratingEnvironmental Aspects into ProductDevelopment’ (ISO14062) and member of international advisory board of CAREelectronics network.

He is the author, editor and joint editor ofvarious books and publications includingGreener Marketing (1992 and 1999), The Green Management Gurus (e-book)(1996), Managing Eco-design (1997),Sustainable Solutions (2001) and SustainableValue (2002). Martin has an MBA from AstonBusiness School in the UK, and has academicand business interests in sustainable productdesign, eco-product development, e-publishing and creativity and innovation.

The authors


Ken Peattie

Ken is Director of the ESRC Research Centrefor Business Relationships, Accountability,Sustainability and Society (BRASS) at CardiffUniversity, and he is also a Professor ofMarketing and Strategy within CardiffBusiness School. He has been activelyinvolved in teaching and research relating tothe integration of environmental issues intocorporate and marketing strategies since thelate 1980s. In 1992 he published GreenMarketing, a basic handbook for studentswanting to understand the implications formarketing of growing environmental concern.This was followed by Environmental MarketingManagement: Meeting The Green Challengein 1995. This was the first major teaching-orientated text on environmental marketingand was subsequently published in Swedishand Chinese. He has been involved inenvironmentally-related research projects in a number of sectors including chemicals,tourism and local government.

Ken has been involved in teachingsustainability issues to undergraduate andpost-graduate students at Cardiff and anumber of other business schools in the UKand beyond. His green marketing researchwork has appeared in a wide range ofacademic journals and has been included in several collected works including theChartered Institute of Marketing’s ‘TheMarketing Book’. In 2000 he, together with co-authors Ashish Pujari and Gillian Wright,were awarded the ‘Outstanding Paper Award’at the Public Policy and Marketing Conferencein Washington DC, for their paper on greennew product development; a version of whichwill be published during 2002 in the Journal ofBusiness Research.

Jacqueline Ottman

Jacqueline is an environmental marketing consultant who helps businesses and otherorganisations find new sources of competitiveadvantage by developing and marketing newproducts and services that are environmentallysustainable. This is ‘eco-innovation’ and manyin the business world today believe it is thewave of the future. Her firm, J. OttmanConsulting, Inc. which she founded in 1989,counts among its clients IBM, Interface, Philips Electronics, 3M, and the United StatesEnvironmental Protection Agency’s EnergyStar ® and Design for Environment Programs.With the help of an extensive databank of Eco-Innovatorssm she guides corporate teamsthrough her proprietary Getting to Zerosm

Process for Eco-Innovation.

She has spoken at every major environmentalindustry conference and numerous corporateenvironmental forums in the USA, Europe,Asia and South America. She has appearedon the Wall Street Journal Report, CNBC andhas been interviewed by Fortune, BusinessWeek, the Wall Street Journal and the NewYork Times.

Her book, Green Marketing: Opportunity forInnovation, was named one of the topbusiness books of 1993. Described by theAmerican Marketing Association as the‘definitive work on the subject’, it was releasedin a second edition and has been translatedinto five languages.

‘Getting to Zero’ and ‘Eco-Innovators’ areservice marks of J. Ottman Consulting, Inc.

Michael Jay Polonsky

Michael is the Melbourne Airport Chair inMarketing within the School of Tourism,Hospitality and Marketing at Victoria Universityin Melbourne. Prior to taking up this positionhe was an Associate Professor at theUniversity of Newcastle and has also taught at Charles Sturt University (Australia), MasseyUniversity (New Zealand), the University of theWitwatersrand (South Africa) and TempleUniversity (USA). He has a PhD from theAustralian Catholic University, two mastersdegrees – Rutgers University and TempleUniversity, as well as a BA from Towson State University.

At Victoria University he coordinates theMarketing Discipline within the School ofTourism, Hospitality and Marketing. He isactive in a range of research units within theFaculty as well as serving on the ResearchCommittee, Coursework Committee, and isacting Chair of the Faculty’s Ethics Committee.

Michael’s areas of research includeenvironmental marketing/management,stakeholder theory, ethical and social issue in marketing, cross-cultural studies andmarketing education. He has publishedextensively across these areas including: co-edited three books on environmentalissues, one of which was recently translatedinto Chinese; authored or co-authored 11book chapters; authored or co-authored 59journal articles and presented more than 80presentations at national and internationalconferences. These presentations includebusiness-focused environmentalpresentations for SOCOG’s EnvironmentalForum, Monterrey Technical University inMexico and the University of Los Andes inColumbia. He has also served as a consultantto Australian Businesses and governmentalbodies.


Charter M., and Clark T. (2002), SustainableValue, Greenleaf Publishing, Sheffield: UK.

Charter M., and Tischner U. (2001), Ed,Sustainable Solutions: Sustainable and Eco-Products and Services, GreenleafPublishing, Sheffield: UK.

Charter M., and Polonsky M. (1999), Ed,Greener Marketing, Greenleaf Publishing,Sheffield: UK.

Charter M. (1994), Greener Marketing inPractice – a European Perspective, Journal of Corporate Environmental Strategy, 1 (4),April 1994.

Charter M. (1992), Ed, Greener Marketing,Greenleaf Publishing, Sheffield: UK .

Peattie, K. (1999), Trappings VersusSubstance in the Greening of MarketingPlanning, Journal of Strategic Marketing, 7, pp. 1–18.

Peattie, K. (1999), ‘Rethinking Marketing:Shifting to a Greener Paradigm’, in GreenerMarketing, Charter, M. and Polonsky, M.J.(eds), Greenleaf Publishing, pp. 57–71.

Peattie, K. and Charter, M. (1999), GreenMarketing, chapter in The Marketing Book (4 th ed), Michael J. Baker (ed), Butterworth-Heinemann, pp. 593 – 620 .

Peattie, K. (2001), Golden Goose or WildGoose? The Hunt for the Green Consumer,Business Strategy and the Environment, 10 (4), pp. 187– 200.

Peattie, K. (1995), Environmental MarketingManagement: Meeting the Green Challenge,Pitman Publishing, London.

Key publications from the authors


Ottman, J.A (2002), The Tough Part is Over:How to Make Energy Efficiency as Sexy asCoke and Pepsi. Presented to the EnergyEfficient Market Transformation Conference ofthe American Council for an Energy EfficientEconomy, March 25, 2002.

Ottman, J.A (1999), Will the consumer Pay a Premium for Green? InBusiness, JGPress,Emmaus, PA July/August.

Ottman, J.A (1998), Green Marketing:Opportunity for Innovation, NTC BusinessBooks/McGraw-Hill.

Ottman, J.A (1998), Five Strategies ForBusiness Reinvention: The Development of Sustainable Products, CorporateEnvironmental Strategy, Autumn 1998, pp. 81–89.

Ottman, J.A (1996), Growing GreenerProducts: What We Can Learn from Pea Podsand Apple Peels in Stimulating Creativity inEnvironment-related Innovation. World FutureSociety Futurism Conference, July 15, 1996.

Polonsky, M.J. and P.J. Rosenberger III ,(2001) Re-evaluating to Green Marketing – An Integrated Approach, Business Horizons,44(5): 21–30.

Polonsky, M.J. (2001) Green Marketing inSustainable Solutions: Sustainable and Eco-Products and Services, Charter, M. and U.Tischner (Eds): Greenleaf Publishing, Sheffield:UK, 282 – 303.

Polonsky, M.J and J. Ottman , (1998)Stakeholders Contribution to the Green NewProduct Development Process, Journal ofMarketing Management,14 (6): 533 –558.

Polonsky, M.J., J. Bailey, H. Baker, C. Basche,C. Jepson, and L. Neath (1998)Communicating Environmental Information:Are Marketing Claims on PackagingMisleading?, Journal of Business Ethics, 17 (3) 281–294.

Polonsky, M.J. and A. Mintu-Wimsatt (1995)Eds. Environmental Marketing: Strategies,Practice, Theory and Research. HaworthPress, Binghamton NY: USA.


Professor Martin Charter

CoordinatorThe Centre for Sustainable Design The Surrey Institute of Art & Design,University College Falkner RoadFarnhamSurrey GU9 7DSUK

t 00 44 1252 892772 f 00 44 1252 892747e [email protected] www.cfsd.org.uk

Professor Ken Peattie

DirectorCentre for Business Relationships, Accountability,Sustainability and Society (BRASS)54 Park PlaceCardiff CF10 3ATUK

t 00 44 29 2087 6562f 00 44 29 2087 4419e [email protected] www.brass.cf.ac.uk

Jacqueline Ottman

CEOJ Ottman Consulting Inc.1133 BroadwaySuite 1211New YorkNY 10010USA

t 00 1 212 255 3800f 00 1 212 255 5480e [email protected] www.GreenMarketing.com

Professor Michael Jay Polonsky

Melbourne Airport Chair in Marketing School of Hospitality, Tourism and MarketingVictoria UniversityPO Box 14428Melbourne City MC 8001Australia

t 00 61 3 9688 4625f 00 61 3 9688 4931e [email protected] www.business.vu.edu.au

Copies of ‘Marketing and sustainability’ can be ordered from BRASS for £7.50 For further information on the Sustainable Marketing Knowledge Network see: www.cfsd.org.uk/smart-know-net

Sustainable Marketing Knowledge Network

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Marketing and sustainability - Sustainable Innovation, Sustainable