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By Kathleen Morson and Bart Mongoven
In the lead-up to Earth Day on April 22, the news pouring out of corporate America would have it seem that "going green" is all the rage in industry. The Financial Times on April 18 printed a 1,000-word essay by Michael Dell on steps the information technology industry can take to make itself greener. Home Depot announced new environmental initiatives April 17, while ConocoPhillips announced two days earlier that it supports a cap-and-trade system for reducing greenhouse gas emissions, and that it wants the environmental concerns associated with tar sands in Alberta, Canada, monitored carefully. Meanwhile, suppliers are bracing for another meeting next week with Wal-Mart, whose trend is to squeeze producers to make greener products, but not at the cost of higher prices.
This flurry of news and announcements is in large part the culmination of the yearlong preparation for Earth Day by the corporate "green PR" industry. However, because of the growing volume of claims to greenness over the past few years, consumers are having a hard time differentiating between empty public relations campaigns and corporate decisions that represent meaningful change -- if, in fact, they are paying attention at all. Research shows that most consumers do not care about the environment enough to let it influence their buying decisions. Furthermore, those who do care do not believe that companies are doing much to change their environmental performance.
From Wall Street to consumers, the dominant perception remains that corporate attention to "sustainability" and the "triple bottom line" (economic, social and environmental goals) are meaningless gestures designed to appease small special interest groups. Although this view is largely true right now, there is much more to the story. First, it ignores the fact that many companies' marketing arms are convinced that a dramatic shift is coming within a decade -- that consumers will begin to select products based on how well they think products reflect their values -- and are driving industry proactivity. Second, it assumes that all pro-environment corporate initiatives are petals from the same flower.
The Differences
Corporate attention to social issues, however, falls into three categories: empty public relations, reactions to a real or perceived change in the market and intentional transformation of the market for a company's own gain. Until analysts, executives and consumers begin to differentiate clearly among these drivers, they will remain confused about how the world is changing.
Once the drivers have been distinguished, however, it will be easier to see what the marketing professionals are beginning to notice: In the West, the relationship between consumers and corporations is entering a new era. The result will be a battle over whether the market or a government is the primary regulator of corporate activities. As companies are faced with more and more demands from society, then, they will seek to even the playing field by aiming for a consensus on the "best practices."
Differentiating among Corporate Actions
In order to determine which of the three drivers is behind a company's green initiatives, we must first determine whether the firm is making real changes and, if so, what it has to gain from them:
1. Public Relations
Social initiatives that are merely public relations campaigns are fairly easy to recognize. Importantly, a PR campaign that coincides with a real initiative does not fall in this category. The key question is whether the company is changing its products, its management structure or its core management processes. If it is doing none of these, the initiative can be easily categorized as a public relations effort. In many cases, however, the conclusion that a company is making a public relations push nonetheless is an important event in the lifecycle of an issue.
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