As we have only begun to understand the dramatic impact that the human species is having on the environment, the concept of sustainability has emerged, an idea championed by many consumers and a business model that has crept into the practices of an increasing number of organizations. If you have not yet heard of this term, you have certainly heard of its closely related cousins: “green”, “natural”, “organic”, “socially responsible” and other terminology that represent a way of doing business that considers the natural environment, and all of us in it, as a fundamental part of the strategic planning process.
Economists, business professionals and academics have all defined sustainability in a variety of ways. Yet, there is general agreement that it involves not only producing and promoting environmentally sensitive and healthful products, but also in the management of pricing and distribution functions. Think of it in terms of a continuum where there are “degrees of sustainability”. No organization has ever attained 100% sustainable status, but there are several endeavoring to do so, and it may soon be technologically possible.
Sustainability reshapes the manner in which we create products, manage our distribution/supply channels, price products, and position products for promotional communications. Indeed, in order to be sustainable, organizations must meet customer needs and marketing objectives as well as ensure that the entire process is compatible with eco-systems (including human health and wellness) and does not have an adverse effect on them challenging? Yes. Impossible? No.
The concept of sustainability as many view it, revolves around two primary concepts: Pollution Prevention (P2) and Resource Recovery (R2). If processes are to meet sustainability objectives, measures must be taken regarding:
1. P2--Reducing, managing and eventually eliminating pollution throughout the product development process.
2. R2--Re-designing systems so that resources are recovered to be re-used, reconditioned, and/or recycled so that terminal disposal into a landfill or other creative methods.
This transformation, already undertaken by a variety of companies, large and small, involves what is known as Design for Environment (DE). This concept embraces an A-Z environmentally and socially friendly approach that follows the product from its inception all the way to the end-user. Think of anything that does not add value to the process as waste. Waste is bad. It costs money. It hurts the environment. Excess packaging is waste. Excess energy is waste. Producing toxic products is waste. And as for government fines and legal outlays? You guessed it…waste. Also, remember that the consumer seeks a bundle of features and benefits, what we call a “product”, and not the side effects that go with it. Environmental pollution, toxic materials, etc. are not at all what they ask for.
Duber-Smith’s “Green Imperative”
For the purpose of publication, I have identified 10 compelling reasons to be green and adopt a business model with sustainability as an objective. The Green Imperative TM provides business executives who endeavor to be more in tune with the eco-system with plenty of ammunition supporting a decision in that direction.
1. Target Marketing: A sustainable marketing strategy, with products that are properly positioned, will address the growing target market for goods that are green, natural, etc.
2. Sustainability of Resources: Insuring the availability of resources to continue to make and sell goods is another imperative that suppliers and manufacturers must embrace.
3. Lowered Costs/Increased Efficiency: There are countless ways to save money and increase efficiency so that marketers can enhance the bottom line and stave off the narrowing of margins that occurs in every industry as it reaches the maturity stage of the life cycle.
4. Product Differentiation and Competitive Advantage: Every marketer knows that in the hyper-competitive world of ingredients and products, notably in personal care/cosmetics, it is crucial to maintain advantages over competitive and substitute offerings.
5. Competitive and Supply Chain Pressures: When competitive organizations and their products adopt sustainable business models and green positioning, it often pressures other companies to follow suit, especially in the case of market leaders.
6. Adapting to Regulation and Reducing Risk: Regulations at all levels of government are on the rapid rise so organizations need to comply.
7. Brand Reputation: Any marketer worth their salt knows that a brand’s reputation is of paramount importance, and being sustainable enhances that reputation..
8. Return on Investment: Due to the savings in cost, gains in efficiency and productivity, ability to address multiple target markets in multiple channels thereby increasing market share, and historically favorable profit margins, becoming more sustainable can, and often does, increase the return on investment required by your shareholders.
9. Employee Morale: A wide body of research points to the fact that becoming more sustainable actually enhances employee morale.
10. The Ethical Imperative: This concept is simple. It is not ethical to degrade the environment and abuse your power over people.
Indeed, there are a variety of very good reasons to engage in sustainable behavior. The above ten represent a framework for understanding as well as for a book, which I am currently in the process of authoring. Next month’s installment will explore putting this concept into action, specifically with regard to personal care.
Note: Some content of this article recently appeared in Soap, Perfumery and Cosmetics Magazine, based in the U.K. The Green Imperative is copyright protected by the U.S. government and may not be used or reprinted without the express written consent of the author.
Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., a Colorado-based strategic planning firm offering marketing planning, marketing plan implementation, and other consulting services to natural products companies in all stages of growth. He has 15 years of specialized expertise in the natural and sustainable products industry and is also Visiting Assistant Professor of Marketing at the Metropolitan State College School of Business in Denver, CO, as well as co-executive director of the International Association of Natural Product Producers. He can be reached at [email protected].