Being green has woven its way into the very fabric of business. According to the 84-page “State of Green Business Report 2012” from GreenBiz, “Addressing sustainability issues is no longer an optional, nice-to-do activity. It is an expectation, no more PR-worthy than safety, quality, employee retention or customer satisfaction.”
Businesses increased the adoption of green practices in 2011, but there was also some backsliding due to the economy. When faced with difficult economic times, businesses could not afford to invest in sustainability efforts.
However, with the economy improving in 2012, as signs indicate it is doing, this could be a banner year for renewing green efforts. Here are four trends you need to know about, including the benefits and pitfalls surrounding your adoption of sustainability practices:
1. Encouraging customers to be participants
Customers are joining in with businesses to demonstrate their own commitments to sustainability. Your customers no longer want to be passive witnesses to your efforts. In the past, if you wanted to show your commitment to a cause and use it for marketing purposes at the same time, you made a donation to a charity or nonprofit. Now, business are engendering goodwill from customers by getting them to participate.
Your efforts need not be complex–they can be as simple as encouraging customers to participate in your recycling efforts or carry along reusable shopping bags. For example, a local dry cleaner here in Ohio has collection boxes at each location for wire clothes hangers. When you go in to drop off or pick up your dry cleaning, you bring in old wire hangers. They can still have the paper wrappings from dry-cleaning competitors. Another example: New York City's Swing Salon donated customers’ hair clippings, which were turned into mats to soak up oil spills endangering wildlife.
Some European countries, such as Germany, have long had laws in place requiring the use of biodegradable and recyclable packaging. The U.S. has lagged behind in the past, but is slowly picking up on planet-friendly packaging. This means using packaging that has a smaller footprint and using recyclable materials such as paper, cardboard and compostable plastic, versus non-biodegradable Styrofoam.
But don’t just look at whether it is recyclable. You must also dig under the surface to understand the energy used to create the packaging. Some packaging uses a lot more energy to create, even if you are using less of it. Net-net, it may not be better for the environment. Also ask yourself if it is as durable as other packaging, or will you end up with more returns due to damage in shipping? To help make good choices, check out the Sustainable Packaging Coalition.
3. Green marketing has pitfalls
In the past decade, businesses have caught on to the fact that customers are interested in sustainability as a general matter. So naturally businesses stepped up their green marketing.
However, studies show that there are limits to just how interested customers really are, especially if green products cost more. In other words, they may be interested, but not interested enough for it to turn into sales. One survey from Grail Research showed that the percentage of consumers buying green products actually declined from 84 percent to 69 percent during the recession, between 2009 and 2011. However, there was a slight uptick from 8 percent to 9 percent in those strongly committed.
With so many more green products on the market and the economic realities when times are tough, it’s hard to use “green” as a marketing differentiator alone.
So what’s the answer? Look at engaging your customers. Also, put messaging on your packaging about being green, since that's where customers will most likely see it. Give information to back up your claims, such as details on your website showing facts and figures. And make sure your products have other differentiators, like superior performance or value, because it is clear that the majority of consumers do not buy based on “green” alone.
4. Carbon zero
Once up a time, it was remarkable just for a business to be eco-conscious in small ways. But as more attention is placed on sustainability, the bar keeps getting higher.
Today, more and more businesses are committing themselves to become carbon neutral or carbon zero. Under this concept, businesses are taking steps to lower their carbon footprint in their operations, and for whatever footprint remains, they attempt to counterbalance that. One way is through buying carbon credits to offset any pollution they cause. Offset dollars can be used to plant new trees or some other activity.
The carbon zero commitment started with large corporations and the federal government. It’s now trickling down to smaller companies. However, for smaller businesses it may not be possible to jump to carbon neutral in one-fell-swoop. This is one trend to tread carefully with–it could be prohibitively expensive for a small business operating on thin margins. And buying carbon credits can be fraught with issues–in some programs, only a fraction of your offset dollars may actually go toward emission-reductions. Incremental steps may be more aligned with your business goals, and more practical.
Learn more in OPEN Forum's Going Green 2012 series.
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