By Karolos – Konstantinos Papadas
PhD Candidate in Marketing, AUEB
It has been noticed that during periods of recession or social change, megatrends such as “quality movement” (1970’s), “globalization” (1980’s) and the internet (1990’s) emerge. In recent years, governments, NGO’s and agencies have been informing the citizens about the harmful consequences of human activity on the environment. Environmentalists are highly concerned about the increase of CO2 emissions, excessive water usage, industrial pollution and depletion of natural resources. In this light, corporations, as active members of society, need to address their impact on the environment and begin using environmentally friendly means of production.
Sustainable development seems to be a key strategy for businesses as the market is becoming more and more competitive due to the global financial crisis. Managers realize that the need for a Corporate Social Responsibility (CSR) strategy is imperative and, thus, they put it forward on their daily business agenda. Research studies stress the importance of implementing a CSR strategy that could yield strong competitive advantage and profitability in the long run (Porter & Kramer, 2006).The development of peoples’ ecological consciousness as well as the emergence of other top environmental issues make businesses set new priorities.
Taking into account the emergence of the above trend in corporate environmental responsibility, many multinational corporations have adopted the concept of green entrepreneurship that offers them three important advantages: low costs, additional profits and business development. In addition, green entrepreneurship could offer an important competitive advantage through product or service differentiation. Academics argue that innovation is the key to progress during recession periods and sustainable development can constitute such innovation. In this vein, Green Marketing is becoming an increasingly interesting research field.
‘Green Marketing’ , a new philosophy in marketing, consists of numerous activities designed to satisfy human needs and wants, but with a minimal detrimental impact on the natural environment. Today, Green Marketing adapts fully to the wider marketing mix including targeting, pricing, design, positioning, promotion and green alliances (Polonsky & Rosenberg III, 2001). When a company decides to integrate Green Marketing in its wider corporate strategy, it does so for the following reasons; customers’ needs, reaction to competitor’s Green Marketing Strategy, suppliers’ requirements, cost and philosophy.
In a recent MBA student survey at Harvard Business School, sixty-four percent of students agreed with the statement “the majority of corporations will have a sustained dedication to environmental sustainability and alternative energy over the next 20 years”(“Passion & Purpose”, HBR, 2012).It seems that future executives will become even more concerned about the environmental issues and sustainable development. However, universities should respond to the current environmental challenge by building a green mindset. Special modules, seminars and conferences would be the ideal way of raising awareness and educating the green business leaders of the future.
The majority of the companies that implement a corporate environmental strategy, follow the classic tactics of reducing their footprint, recycling, investing in alternative energy etc. Although it is a good start, it is not enough. Green philosophy has to be integrated with all corporate strategies and become a real corporate value. Inspiring employees to adopt a green lifestyle and become the evangelists of a company’s green activities can prove to be a most challenging task, taking into account that word-of-mouth still remains the best promotion tool. Clearly, this is a C-level executives’ job.
There are quite many examples of best practices in Green Marketing coming from the international industry. Unilever’s CEO, Paul Polman suggests that the reduction of environmental impact has to be made through responsible and not reduced consumption. GE’s ecomagination was one of the very first innovative programs in Green Marketing that made profit out of solving social problems. Wal-Mart’s CEO, Lee Scott gave the following directive to his more than 1,000 suppliers in China: reduce waste and emissions, cut packaging costs by 5% by 2013 and increase the energy efficiency of products supplied to Wal-Mart stores by 25% in three years’ time. In this vein, Nike requires that its leather suppliers not source from clear-cut Amazon forests. Finally, Coca-Cola has worked intensively with its partners to “light weight” its packaging and cutting greenhouse gas emissions.
To conclude, sustainability is an emerging megatrend that affects competitiveness. Today, sustainable development is a strategic issue that incorporates profit, added value and social responsibility. The next generations of business leaders need to know that their companies will have to meet their social responsibilities and this can only be achieved via the combination of good business practice and sustainability.