By Steve Rowen, Partner
5/20/2008
I’ll admit that I don’t watch a lot of television. And when I do, apart from sports, it’s never live. I’m a full season behind in Lost (on DVD) because I’d rather not have to wait a full week in between commercial-laden episodes (advertisers will simply have to find another way to reach me). And I simply can’t stay up to watch Bill Maher on HBO Sunday nights. But through the beauty of on-demand, I catch each episode of his “Real Time” series a few weeks after it’s already run.
So last night I finally caught the “Earth Day” episode from a few weeks’ back. Much of the talk surrounded the dire conditions of our fragile planet: Coal plants going up in China at an alarming rate. India’s booming economy being built entirely on a foundation of fossil fuels. The fact that Costco and Sam’s club are setting rations on large food purchases because we’re in a global food crisis due, in part, to alternative fuels like Ethanol using massive amounts of corn (and the fact that that it takes 8 pounds of feed grain to produce one pound of beef for us meat eaters).
During all of this, Maher asked one of his guests, economist Jeffrey Sachs of the Earth Institute at Columbia University, if there was any good news – any hope at all – in regards to our environment. Sachs’ response was fraught with the type of political barbs that make Maher’s show famous – even though he was slated to be the apolitical guest.
Politics aside, we at RSR just concluded our first every foray into the world of ecological sustainability: a benchmark study aimed to find out what retailers are really doing in the face of dark environmental times. What’s more, is that we may have found some small bits of good news to report:
- Green is definitely still a PR issue for most retailers. Traditionally, vigilant environmentalists translate this as corporations touting their “best efforts” while continuing to do unimaginable harm to our ecosystem in pursuit of a buck. However, as it relates to retail, those retailers who are already outperforming their peers (Winners) are doing MORE good, and not because of cost-savings, but because they believe that the customer will soon demand green products and services. When asked how important cost savings are in the discussions surrounding green implementations, 48% of Winners identified it as unimportant (versus NO financially-underperforming retailers, or “laggards”). Further, as most Winners place a low priority on cost reduction as a driver for green initiatives, 76% of laggards view cost reduction as a high priority.
- When asked about social responsibility, the same pattern as seen with cost reduction reemerges. Fully 77% of Winners view ethical obligation as a “medium or higher” motivator to bring about more environmentally responsible products and practices, while only 28% of laggards identify ethical obligation as any type of importance at all. Conversely, 71% of laggards pointed to ethical obligation as “less than important,” with 57% identifying it as of “little to no” value at all. This is a staggering contrast in overall viewpoint.
- Seventy-one percent of our overall respondents believe that marketing the brand as an ecologically-conscious company has (or will have) a profound effect on sales. This shows that even laggards, who are purely cost-driven when it comes to green, are starting to believe that there is going to be some value on the customer/brand side eventually.
- To Maher’s point, 39% of Winners (compared to 13% of laggards) view the media as a sensationalized force that has swayed consumers. This represents something of a “bet-hedging” policy. These retailers don’t believe the customer is fully demanding greener products yet, but are working to ensure that their brand is seen as green-friendly when she ultimately does.
This data is encouraging for several reasons. Granted, retailers are still in the early stages of rethinking their practices with an eye towards sustainability, but for a first year report, it is incredibly heartening to see that Winners are setting the pace. The retailers doing the most damage to the environment are already in the most financial danger, and those who are quick-studies will take a page from Winners’ books and get their products and practices “greener” - faster. There is also quite a bit of good news in the report surrounding the real opportunities retailers currently see, specifically in packaging and energy-saving solutions both in the store and the supply chain. Interested readers can download the full report here.
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