Green Marketing 2008

Who's in Charge of Green?

Sustainability Officers Must Work With Marketing Side to Communicate Their Companies' Commitments to the Environment

By Published on .

Illustration: Gary Neill
When Wal-Mart holds its periodic sustainability milestone meetings, CEO Lee Scott is known to joke about how big the sustainability department is getting. In reality, unlike the retail behemoth's ballooning marketing department, there really is no sustainability department to speak of, at least in the traditional sense.

Wal-Mart Stores does have the now-commonplace "sustainability officer" -- Senior VP-Sustainability Matt Kistler. But when it comes to the traditional trappings of a department head, namely budget and staff, Mr. Kistler is running lean. Fewer than 10 people report directly to him.

So goes the evolving dance between sustainability and marketing, as chief sustainability officers become as prevalent as chief marketing officers in Fortune 500 companies. Although more marketers are striving to act and look green, their sustainability officers seldom come up from the marketing side.

The gap between technical and marketing experts is nothing new, says sustainability consultant Peter Knight, but it must be bridged for companies to effectively communicate their green commitments.

More than 70% of consumers link marketers' social responsibility to their environmental behavior, according to data from consultancy Conscientious Innovation. In such a world, sustainability officers and CMOs must find ways to join forces.

Influence gap
In many cases, the sustainability department has yet to achieve the size of the typical marketing department or the old-school power that a CMO wields in terms of sheer dollars controlled. And it probably never will.

At Wal-Mart, the "thought is if you've got this big department, then others will say sustainability is [that department's] job, not mine," says spokesman Kory Lundberg. "If it's integrated into the business, everyone has a commitment to it."

Or consider P&G. Late last year, Procter & Gamble Co. formally created a sustainability department, naming Len Sauers VP-global sustainability. But while Global Marketing Officer Jim Stengel reports to Chief Operating Officer Bob McDonald, Mr. Sauers reports to Charlotte Otto, global external-relations officer, who reports to Mr. McDonald. Mr. Sauers oversees 50 people, but it's not a 50-person department in the traditional sense.

"They are working with sustainability as they develop their programs within their own business units," Mr. Sauers says.

"It's a funny new duck that's being created. Generally, [sustainability officers] exercise soft power. They have very little budget, direct reports or organizational authority," says Adam Werbach, veteran environmental activist and now CEO of Saatchi & Saatchi S, which was created in January when Publicis Groupe announced its acquisition of Act Now Productions, Mr. Werbach's green consultancy.

The emergence of a new power center -- even if just a "soft power" center -- in corporate America shouldn't be seen as a threat to CMOs, says Mark Lee, CEO of SustainAbility, a U.K.-based consultancy that works closely with sustainability officers. The company's U.S. clients include Ford Motor Co., Sara Lee Corp., MasterCard and Starbucks Corp.

U.S. consumers lag on eco-issues
While U.S. concern about climate change is significant, it's often near the bottom among nine countries surveyed by Ipsos for Havas Media. More than 11,000 respondents were interviewed in the U.S., the U.K., Brazil, China, France, Germany, India, Mexico and Spain. Among U.S. respondents:
agree that climate change will affect them and their families vs. 77% globally.

agree that we as a country will have to change the way we live our lives vs. 80% globally.

agree they can make a positive contribution to solving the problem vs. 74% globally.
In fact, Mr. Lee says, CMOs and sustainability officers can benefit by not just working together but working together closely. "There's actually such an interesting potential for symbiosis between the two," he says.

Dan Esty, author of "Green to Gold" and director of the Yale University Center for Environmental Law and Policy, sees a crucial role for the CMO in a company's green strategy.

Despite the increasing influence of sustainability officers, "chief marketing officers are very much at the heart of strategy building when it comes to the environment in many companies. In brand-centric companies, it is the CMO who is the leader of the environmental strategy effort," says Mr. Esty, who also runs his own consulting company, Esty Environmental Partners. Clients include Coca-Cola Co., Unilever, Ikea, Hanes, Nestlé Waters North America and American Eagle Outfitters.

Traditionally there's been a chasm between the technical experts in a company and the marketing division, says Mr. Knight, co-founder and CEO of Context, a sustainability consultancy whose clients include Hewlett-Packard Co., Sun Microsystems, Kimberly-Clark Corp., Motorola and United Technologies.

Working together
"That's a major problem," he says. "If you don't get partnering between the marketing and the technical people, that leads to some bad messages coming out. The clever companies are making sure there are interpreters along the way. The non-savvy are either not doing anything or relying on marketing people to understand this."

Getting sustainability officers and CMOs to work closely together could also put an end to the "greenwashing" that floods the market today.

Mr. Knight sees the sustainability officer's role as that of "missionary" and a "broker" of relationships among a company's marketers, scientists and high-level decision makers, including the board of directors.

"The guys with slide rules in their pocket are really hopeless to talk to the board," he says. "The sustainability officer is the one carrying the message backwards and forwards to everyone. We are in a period of transition. You need coaches going around and talking to everyone."

That description sounds a lot like the way Lorraine Bolsinger, VP-Ecomagination at General Electric Co., describes her job when asked whether she sees it as a marketing job.

Tightrope walking
"Marketing Ecomagination internally and externally is an important part of my role," she says. "I oversee the entire Ecomagination program across GE, which requires uniting marketing; sales; and environmental, health and safety leaders to meet the goals of our initiative and GE."

This balancing act stretches from the worlds of package goods and biogas engines to the realm of entertainment and gaming.

Gwen Migita, director of corporate social responsibility at Harrah's Entertainment, which operates 51 casinos worldwide, is a classically trained marketer who worked in consumer insights at Harrah's and as a market research consultant before being appointed to the new post last September.

Before Ms. Migita's appointment, corporate social responsibility was handled by the Harrah's Foundation. "It has been so separate from marketing traditionally," she says.

Ms. Migita is overseeing efforts to communicate what have been mainly behind-the-scenes efforts to mitigate the company's environmental impact. She's leading a marketing effort to communicate those changes to guests. As a direct-mail marketer, Harrah's has already cut its mailings to the 40 million customers in its database, saving $3.5 million, Ms. Migita says.

"It has been very back-of-the-house, and now it's time to communicate our efforts to consumers and how they will see it in hotel rooms and in companywide promotions," she says. "Translating an ethos and commitment into tangible numbers and brand value is hard. There's a huge difference if you have the marketing background to understand those metrics."

Sauers points P&G in the right direction

After earning a Ph.D. in toxicology, Len Sauers began his career at Procter & Gamble Co. 23 years ago, working in research and development before moving to external relations. Late last year he was named VP-global sustainability. Mya Frazier asked Mr. Sauers about his role and P&G's commitment to sustainability.

Advertising Age: When you started at P&G, was there a position like yours?

Len Sauers: We had a well-defined human- and environmental-safety division. It's always been paramount to us.
Len Sauers, VP-global sustainability at P&G
Len Sauers, VP-global sustainability at P&G
We pioneered the method by which environmental risk assessment is done today for consumer products. There is still a product-safety and regulator-affairs division today. The development of a defined sustainability department is at least a decade old. We were the first company to put out a corporate sustainability report 10 years ago. ... The role of this environmental-safety department is conducting those risk assessments on anything we put into the market.

Ad Age: What's a typical day like for you?

Mr. Sauers: P&G announced a new corporate strategy and new goals in October 2007, so a lot of the strategy work for the job was largely completed. Most of my work is in operationalizing those three goals: developing and marketing $20 billion in SIP, or sustainable innovation products; improving the environmental footprint in operations; and the social sustainability area of increasing the number of children in need that we reach.

Ad Age: Where does the sustainability department fit in?

Mr. Sauers: If you think of how P&G has found success in leveraging scale, there is value in leveraging scale when it comes to sustainability and having a single person overlook all the new work. ...

Actually, the corporate-sustainability department is relatively small. We predominantly work with units within each business unit. They are working with sustainability as they develop their programs within their own business units.

Ad Age: Do you see your job as a marketing job?

Mr. Sauers: Well, marketing does play a role in all of this. ... We then need to communicate how [the consumer] can be environmentally sustainable through the use of that product. Marketing is not my role, but I work with a lot of our marketing people. It's making sure I bring the good science to our marketing people and make sure they are communicating it in an accurate way.

Ad Age: How do you interact with P&G Global Marketing Officer Jim Stengel?

Mr. Sauers: Jim Stengel and I both play a role in ensuring the organization understands social and environmental sustainability is very important. I work with a lot of his people in the various global business units on specific products and how best to communicate environmental, sustainable advantages of those products. The company will not "greenwash." We have set very stringent criteria on environmentally based claims. Part of my job is to ensure there are principles across the company and that we abide by the principles we established.

Ad Age: What role should ad agencies play in helping brands with sustainability issues?

Mr. Sauers: It always comes down to the consumer and developing products for the consumer. Any help we can get on educating her on how to do that I would find of value.

Ad Age: How do you think the term "sustainability" is best defined?

Mr. Sauers: We define it very broadly and very simply: ensuring a better quality of life for everyone, now and for generations to come.

Take a tour

The green-marketing growth curve is steep. According to the law firm Dechert, 2007 saw more than 2,400 trademark applications using the word "green."

The list of websites to get you greener is equally daunting. Want to see a sim of how every country is pumping out CO2? Here are 10 others you may not have bookmarked. Have another suggestion? E-mail Mike Ryan.
PEWCLIMATE.ORG All-business approach to climate change
REALCLIMATE.ORG Great collection of links
WBCSD.ORG Corporate leaders on sustainability
SOCIALINVEST.ORG Tracks socially responsible banks and mutual funds
ACEEE.ORG Wealth of green programs and policy
COOLCITIES.US/CITYPROFILES.PHP What 1,000 cities are doing and ways to get involved
EDF.ORG Calculator for compact fluorescent light bulbs
IMC2.COM Calculator that tracks the carbon footprints of online campaigns
WILLYOUJOINUS.COM Online game from Chevron
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