Green Consumer Adoptions Driving Corporate Change...

Several recent studies confirm a dramatic acceleration of the green consumer trend. For example, BBMG, a marketing agency, conducted a November 2007 study concluding that US consumers increasingly aspire to do business with companies that are “environmentally friendly” and “socially responsible”. Moreover, a recent Edelman study concluded that consumers are not just talking, but taking action: 40% of US consumers are more involved in social causes than they were two years ago and expect their brands to do the same, and protecting the environment was the top issue that consumers cared about globally (92%).

Not surprisingly, leading companies are responding to this green consumer sentiment by aligning their brands to become more socially responsible and eco-friendly. And the greening of companies is not relegated to niche markets or brands,but rather is being adopted by the largest (and traditionallyconventional) of consumer brands and companies. For example, eco-labelsare actively being used or under consideration by manufacturers majortechnology manufacturers such as HP and Dell, as well as the country’s largest retailers such as Wal-Mart and Home Depot.

There are several drivers of this change, including:

• Companies wish to align more closely with the evolving demands by consumers.
• Companies hope to secure a competitive advantage in the market as “early movers” on green.
• Companies recognize it may be easier and far less costly to reposition traditional brands as green now than it will be after government passes regulatory mandates to do so.
• Some companies are responding to green pressure from partners across their supply chain.
• Other companies are recognizing that green is a powerful talent recruitment and retention tool.

The effects of this sustainability movement are reverberating far beyond the consumer market, up and down the supply chain. Wal-Mart, for example, has required its suppliers to reduce the environmental impact of the products that it sells (e.g., more concentrated laundry detergent formulas reduce the use of energy for transportation) while expanding the market for others (e.g., selling fluorescent bulbs at lower cost under its own private label).

Wal-Mart has also identified $10 billion in potential savings simply by decreasing product packaging. (Wal-Mart also announced a major push into organic food as part of a broader green company policy.) Procter & Gamble made a recent commitment to sell $20 billion worth of greener products over the next five years. P&G has also joined the Supply Chain Leadership Coalition, an industry organization that pressures suppliers to publish information on carbon emissions, to help it reduce the impact of its suppliers as well.