British Marketers Grapple With Green

In Sync With the Kyoto Accord and the Carbon Trust, Advertisers and Government Try to Make Sense of the New Order

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Last year Nicholas Stern, U.K. adviser to the government on the economics of climate change and development, reported the world economy is doomed unless we spend 1% of it now to address climate change. So finance minister Gordon Brown slapped a $10 climate-change levy on airline tickets.
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Not since Nero has a politician faced catastrophe with such sangfroid.

But as the North Pole melts, doing nothing is not an option in Europe. With climate change a sacred cow, European politicians are decorating it with red tape. Each country has its own plan to meet EU targets, but joining the European Union Emissions Trading Scheme is mandatory. The ETS is Europe's most important effort to force companies to cap their greenhouse-gas emissions in line with their nations' Kyoto commitments.

Britain has gone further. In 2001 the government set up the Carbon Trust as an independent advice and investment company to help the country move to a low-carbon economy. And last month more than 1,000 U.K. business leaders pledged to take action at the Prince of Wales' May Day Business Summit on Climate Change. There, marketers made more than 5,500 pledges to take action within their companies and with their employees, suppliers and customers. In addition, nearly 600 marketers signed up to become May Day Companies, committing to work with Business in the Community, the Carbon Trust and its partners, and to report progress against their pledges.

Accuracy enforced
Given the complexity of the science that surrounds climate change, inevitably firms are going to make claims that are hard to back up or disprove. Britain's advertising industry self-regulates through the Advertising Standards Authority and its subsidiary body, the Committee of Advertising Practice, which writes the rules. ASA and CAP spokesman Matt Wilson says advertisers must comply with the rules that environmental claims be substantiated and, in particular, must not mislead consumers.

Most complaints to the ASA deal with food, alcohol and gambling. Mr. Wilson says the number of challenges to green claims is rising. "It's a growth area of interest for the ASA," he says. "For the moment we have an open mind, but we are monitoring the situation. It may be that we will have to address green marketing claims directly."

Meanwhile, on the shop floor, Britain's main retailers are competing on greenness as well as price, convenience, quality and choice. Their emerging purchasing and labeling policies are likely to force consumer-package-goods manufacturers to go greener. Waste, carbon footprint, organic, fair trade and recycling are just some of the targets.
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Loyalty points
For example, Tesco CEO Terry Leahy, head of Britain's most successful retailer, plans to spend $1 billion on renewable technologies such as wind turbines, solar panels and biomass generators to cut its energy bill in five years. Tesco also recently announced a plan to award loyalty points to shoppers who recycle their bags or pack their own.

Clothing retailers are turning up the heat as well. Last November, Marks & Spencer CEO Stuart Rose made 150 of his top executives watch Al Gore's "An Inconvenient Truth" to kick-start ideas for the retailer's response to climate change. Later it announced would become the U.K.'s leading retailer of Fairtrade cotton, to go along with M&S programs in sustainable fishing and reduced salt and fat in food items. As the first step in its five-year eco-plan, M&S said it plans to offer 70 different items. Over the next five years, it will convert entire lines, such as men's and women's T-shirts, to Fairtrade cotton. A rash of other retailers are also rushing in with organic-cotton lines.

Britvic Soft Drinks' health issues are also taking on a green tinge. Britvic, which bottles Pepsi and 7UP in addition to its home brands such as Robinsons, J2O, Tango and Froot-Shoots, has just announced it is taking out all artificial flavors and sweeteners from its brands.

Britvic spokesman Julian Mears says, "We are also working to reduce our carbon footprint, waste and oil-based packaging. We are currently experimenting with a starch-based material that we hope will biodegrade within three weeks."

Local bottles
Mr. Mears says it's also saving energy by blowing bottles in the factory rather than outsourcing them and have them shipped to the bottler. "We're doing this for business reasons and because customers expect us to."

The financial sector isn't missing out either, with Barclays announcing that by April, 50% of its U.K. electricity consumption would be generated from renewable sources, up from 3%. It hopes to reduce carbon emissions by 125,000 tons per year.

Britain has always had an environmental lobby. But it may be surprising to find Queen Elizabeth, Prince Charles and the landed gentry leading the way. The prince, one of Britain's biggest landowners, has practiced eco-friendliness on his farms for years, and his Duchy Originals is a top-selling organic brand. According to the Palace, the royal household has been going green since the 1980s, and the queen is even exploring how to generate hydroelectricity from the Thames to power Windsor Castle.

But the British public (thanks to the tabloids) thinks Charles is an over-privileged, tree-hugging nutcase, a view that often spills over into other media, so Britain's editors often distort the ecology debate because of class antipathies.
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Some anarchy in the U.K.
No wonder Mintel, a market researcher, found last March one in four Britons "confused but willing" when it comes to green issues. It also found one in five is "too busy to care," and 17% suffer from "green overload." "Most consumers clearly need simpler messages," says Mintel Consumer Research Manager Angela Hughes.

One agency trying to make sense of the green movement for consumers is London brand consultancy Dragon Brands, which recently finished a detailed study of consumers' attitudes toward green issues such as organic produce, fair trade, recovery, reuse and recycling, waste, and on-pack carbon labeling.

Claire Nuttall, head of consumer brands at Dragon, says it aims to lead its clients, which include Avon, Unilever and Carlsberg beer, into a greener world. It recently did a global-brand marketing project for Carlsberg and wrapped an environmental report for Unilever.

"Consumers rate the environment as a serious issue -- not as important as job security or health but up there," Ms. Nuttall says. "They are prepared to do more, but they want the suppliers to do the work and make greener choices available to them and to explain the differences."

Consumers "are not prepared to pay more," she says. "And they will police and punish token gestures."

You have been warned.

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