The game-changer arrived earlier this year from the annual Legal & General Investment Management report. As fund managers for £1 trillion worth of UK pension fund investments, they have a unique and valuable perspective. Their report stated, in no uncertain terms, how they consider the biggest threat for shareholders today to be the effects and wider commercial implications of climate change. This was no lip-service or a brand positioning exercise. This was a wake-up call to businesses they are invested in, and those they might.
From a brand perspective, I see this as a sea-change moment. The message is stark, adapt quick to sustainability or get left behind.
Seismic Changes Ahead
Change is happening the world over, and for marketers tasked with keeping brands and businesses relevant and compelling, we need to be ahead of the game and ahead of the brands we represent. Maybe the techniques won’t change, but the purpose will.
From a personal perspective, and as a consumer, climate change has joined the only other concern in my life that keeps me awake at night – a teething baby. Often I find myself lying there and thinking about her future, and being mindful of how she, and the millions and millions of her generation, have been born into a significant time of uncertainty and disruption. It seems painfully clear to me that in her early lifetime she will play witness to some seismic changes, shocks even, to almost every natural environment, to all economies, to politics, to global migration and to new corporate technological races.
You have to be the village idiot, or worse, Donald Trump, not to heed what scientists have been screaming at us since I did my GCSE’s in the mid 1990’s (remember the greenhouse effect and CFCs?!). They are telling us, in no uncertain terms, that we are all sleepwalking into the biggest global-affecting change, probably since woolly mammoths roved the Northern Hemisphere.
All of those repercussive changes are going to have significant impact on the types of products we need and want, and they will undoubtedly reshape consumer demand and the way we want to buy or find them. With consumers worldwide seeing first-hand or being made more aware through the media of the effects of climate change, there is a clear growth in demand for environmentally safe products, a greater scrutiny of brand over their conscientious product development and production methods.
The speed of sector innovation, development and adoption is also going to vary enormously, but one thing is for sure, it’s accelerating as those impacts of climate change become realities in each of our lives.
There Will Be Big Winners and Big Losers
When I approached this topic with the Managing Director of a sizeable client recently, they were dismissive, suggesting it was just another fad and there would be a ‘next trend’ to talk about soon. As then, I could not disagree more – just look at sudden dramatic growth in popularity of the Green party in our current politik. Sure, there are protest vote shifts you have to factor in in, but in previous elections they would not even have been viably considered for that; and yet they are now moving confidently into the mainstream, and so will likely their policies into the larger parties. It is going sink or swim to get those middle-ground votes.
Questions for your brand now: how, where and when should you be establishing, embodying and sharing your existing credentials and values? Should there be more internal pressure on operations to start to deliver better sustainable outcomes and improve your environmental credentials?
The greatest complexity in any decision making of this kind will rest with poorly performing companies in this area, especially those which have a significantly negative environmental impact, such as; those where there is high energy usage, packaging requirements or toxic waste products. Even for those with moderate record, should they be being overt about their values and credentials, should they be open and promoting their transitioning improvements (therefore highlighting their negative record)?. Will that impact, or conversely, improve sales and customer retention as being a brand who is tackling this head on? This is where marketers are going to earning their stripes in advising each business, and on merit.
Despite having had a poor economic decade to date, the automotive industry is a great example of marketing preparedness. It tends to be a bellwether for global industry as it has to invest decades ahead out of necessity surrounding R&D and plant development. For those in the sector who survived the impacts of the financial crisis, they have largely been resilient enough to effectively invest into electrification. The forerunners and winners so far have without doubt been the Far East giants, Toyota and Honda, yet this disruptive change has opened the door to new market entrants to challenge the old ways, including from innovators like Tesla and Dyson.
The lesson we can surely learn here is those who lag behind in their preparedness to change, still doubting the virtue of environment-first strategies, can be left behind no matter how big they are. Jaguar Land Rover is the perfect example of how to get it wrong. These oil tanker-like corporations have taken the different strategy and are getting their ducks lined up across their entire ranges and their plants rather than in just one or two vanguard models like their Far East competitors. Whilst there is investor/shareholder concern for the western giants – Ford, VW (Group) and Mercedes – who have been investing on bigger scales in range-wide wholesale changes. VW, for instance, plans to be producing an incredible 50 fully-electric models by 2025.
It’s Time For Change In Our Local Marketing Climates
Growing protester rallies, increased prevalence and shifting narratives in the media are telling signs that consumer values have already changed with early-adopters. Sustainability for global titans is one thing, but for most businesses adapting to climate change is going to be challenging and complex. Apart from the financial investment, the most significant change businesses of all sizes must address are their cultural values – aligning intent with real action.
If the Legal and General statement tells us anything, sustainability is going to be a battleground and a key marketing factor for large and small businesses alike. I would advise any business that any change needs to be driven by best and credible intentions as an integral part of their business culture and long-term business plans, not as cynical sales tool!
Change Your Board-Room Perspective Fast
For big business, the time is now and the strategy you adopt will be critical to your success, even survival. If you are still sceptical or uncertain, remember that one of the most powerful marketing motivators is the threat of loss. Consumers, seeing ice shelves melting 10-times faster than predicted, natural habitats under-threat worldwide and animals literally chocking on plastics in our oceans, will make more positive choices around your brand if your green credentials are elevated, if not transformed (see my recent LinkedIn article Has The Way We Think About Great Brands Changed).
My advice is being open. Confront it. We are where we are. Lessons have been hard learned and consumers will value you higher for how you address and rectify your marketing proposition. Good examples would be going more digital, introducing 100% recyclable packaging, using only renewable energy sources or carbon off-setting.
If you are a smaller business or brand, consider how you are more agile and won’t need decades to adapt. Your challenge is going to be better understanding your specific client’s perspectives and forming a winning vision centred around what those and future consumers are going to demand to inform. Then validate and drive those strategies.
The big multiplier though is government. In the UK we are in huge danger of being left behind as our politicians become pre-occupied by Brexit. We all know post-Brexit Britain is going to look very different politically – new optics, new agendas. Continued Brexit frustration may push people enough to make more extreme choices, and the Green Party could well be a big winner. Not enough, maybe, to become a major force, but enough to force larger parties to begin to adopt popular policies in an attempt to steal back voters.
Certainly within the next few years that nudge will bring the environment to the centre ground of our national politician narrative and this will be a Rubicon line for marketing.
Are You Changing Fast Enough?
If you have not already begun to adapt, innovate and motivate your team around sustainability in your operation and marketing it’s not too late.
For help and support in how to evolve your business and marketing plans please get in touch.