Traditional brand CMOs aren’t really committed to green-consciousness, says Forrester

Despite the evidence that consumers increasingly prefer brands that act positively for the planet, too few brands are innovating with new products, new experiences, and new forms of engagement that address these values. This causes many CMOs to lean too heavily on marketing communications for their green efforts, risking further backlash from consumers who often believe that brand messages about sustainability are self-serving and intended only to sell more products.

Although there is growing evidence that new entrants manage to be successful and that green-conscious consumers expect brands to shift, many CMOs at established firms aren’t bold enough to innovate their marketing mix or to challenge their firm to update its business model. Too often, CMOs still think stakeholder capitalism is far from becoming a business reality. One CMO at a CPG company said: “I am fed up with the bullsh*t around the 3Ps (people, planet, profit) of the so-called stakeholder economy; my CEO asks me to sell at a higher margin, and to do this, I often have to steal market share and sell more.”

Moreover, greenwashing has become a legitimate fear following the emergence of scandals such as “Dieselgate” and proceedings against consumer electronics players for obsolescence programs. Marketers recognise the threat of a consumer backlash given initiatives such as planting trees, dealing in CO2 drawing rights, or giving money to green charity programs isn’t enough. Consumers no longer want brands to compensate for the harm they do to the environment; they expect them to have a truly authentic green approach.

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Additionally, many CMOs automatically default to chief sustainability officers. Environmental sustainability is a complex challenge that requires full business transformation, from sourcing and supply chains to daily client interactions.

CMOs have the shortest tenure in the C-suite; with conflicting priorities, many leave this to a chief sustainability officer just as they did in the heyday of the chief digital officer.

David McClintock, marketing director at EcoVadis said: “CMOs may initiate the conversation because they realise that marketing can be used not only to preserve brand reputation but also to highlight their company’s positive performance to make real change happen across the value chain. But the reality of the work happens behind the scenes with chief procurement and chief sustainability officers.”

While it may be easy to dismiss the green opportunity by claiming that sustainable marketing isn’t profitable, the team at Forrester identified numerous new entrants as well as some traditional brands that have revisited their marketing approach. Alarmingly, Asian firms lag compared to their Fortune 200 peers with:

Only 26% of Asian Fortune 200 firms having named a sustainability lead, versus 92% of US and 81% of European Fortune 200 firms.

Unilever’s sustainable living brands such as Dove and Ben & Jerry’s, for example, grew 69% faster than the rest of the business in 2018, compared with 47% in 2017. Unilever plans to reach €1 billion (US$1.5 billion) in revenues for vegan products by 2027 via brands such as Vegetarian Butcher, Hellmann’s, and Magnum. According to Barclays, vegetable protein products will be a €30 billion (US$36 billion) business by 2027.

Meanwhile, European firms, especially Nordic and B2B players, stand out globally. Nearly 46% of the global 100 most sustainable companies are headquartered in Europe. B2C marketers can learn from their European B2B peers such as Schneider Electric and Osram. Nordic players such as Metso Outotec, Neste, and Orsted are especially advanced. Global B2C players such as luxury conglomerate Kering or banks such as BNP Paribas and ING stand out from the crowd.

Manufacturers are also increasing their transparency efforts. Financial services firms are also reducing their organisation’s carbon footprint or e-waste, with 20% now auditing their business partners. The study added Retailers are less likely than firms in other industries to act, even though European retailers such as IKEA, Intermarché, Lidl, Système U, and Zalando have launched pioneering initiatives.

(Photo courtesy: 123RF)

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