the power of green: what bi dtk b tbusiness needs to know ... · the power of green: what bi dtk b...

The power of green: what b i d t k b tbusiness needs to know about

sustainability in 2011y

Graeme Colman, Operations Manager, New Zealand Business Council for Sustainable Development.G Li i Sh G l A kl d 29 M 2011Green Living Show, Greenlane, Auckland, 29 May 2011

DEDICATED TO MAKING A DIFFERENCE

10 answers on sustainable practice:1. What do your customers expect?2. Will they pay more if you do the right things?3 How many are willing shift to or from you?3. How many are willing shift to or from you?4. What do they want to know from you?5. How are your major buyers selling it?6. How does your thinking compare with other

business leaders’?7. Is it your best opportunity this year to lift profits?y pp y y p8. Are you engaging staff?9. How to turn your staff into company advocates10 Why is it the “right thing to do”?10.Why is it the right thing to do ?


The Kiwi values set you sell into

5 think its only about the economy

5 it l b t th

What matters to Kiwis

Economy5%Enviro

5 say its only about the environment

20 say that life is too hard for t thi k b t thi

Surviving20%

5%5%

me to think about anything other than today

70 say I want a better standard of living and to maintain my

Quality oflife

70%of living and to maintain my quality of life: we should make decisions on what’s best long term

- UMR research for the Business Council


What factors do you consider when purchasing products? Organic?Fair Trade?L l?Local?Low carbon intensity?Eco-friendly?Cost or price only?Socially responsible?Don’t care?Don t care?Other?


The top rating factors New Zealanders consider before buying a

What your NZ customers expectp g y g

product include it being:

local (59%);

eco-friendly (57%);

fair trade (55%);

ShapeNZ July 2010 survey 1812 consumers Weighted Maximum margin

environmentally sensitive (55%);

lowest cost or price (54%);

i ll ibl (37%) d consumers. Weighted Maximum margin of error +/- 2.1%. socially responsible (37%); and

organic (29%)

don’t care 1 8%don t care 1.8%

We have now reached the tipping point where non-price characteristics are almost as important as price… BUT…


Will they pay more?Mainly no, but non-price attributes are increasingly important

When asked to select just one factor, the most important is:

Mainly no, but non price attributes are increasingly important

price (46%); followed by –

local and eco-friendly (both 11%);

ll bl ( )environmentally responsible (10%);

fair trade (7%);

socially responsible (7%); andsocially responsible (7%); and

organic (2%).

Get other factors as well as the price right attract significant market share

ShapeNZ July 2010 survey 1812 consumers. Weighted Maximum margin of error +/- 2.1%.

Get other factors as well as the price right - attract significant market share


Times have changed, mostly..

the Erin Brockovich – Noel Leeming -Bond and Bond backfire October 2007


And by way of contrast…

A total commitment = No 1


When considering brands with sustainable attributes, which of the following has the greatest influence on which of the following has the greatest influence on you?


So what do Kiwis want to know from you?

Three major factors affecting your customers:

So what do Kiwis want to know from you?

• The experience you gave them (65%)

• Knowledge about the company promoting the product (45%)

• Brand trust (42%)

You have significant opportunities to lift market share by communicating credible information from your brand about your authentic actionsy y


Experience + Knowledge + Brand Trust + ?

The results indicate if sellers use eco-labels backed with authentic information this could make as many as 85%authentic information this could make as many as 85% more likely to buy.


How many consumers are willing to shift?

Eco-labels certifying environmental friendliness can make New Zealanders 29%friendliness can make New Zealanders 29% more likely to buy a product.

Other research indicates here and in key k t th t 32% f th k tmarkets overseas that 32% of the market

will shift TO or FROM you when people find out about you.

ShapeNZ July 2010 survey 1811 consumersShapeNZ July 2010 survey 1811 consumers. Weighted Maximum margin of error +/- 2.1%.


Are you engaging staff?

• 25% of staff less likely to stay in an organisation not paying enough attention to the environment and sustainable development (42% of managers)

• 50% (55% managers) more likely to stay if the organisation is paying enough50% (55% managers) more likely to stay if the organisation is paying enough attention to environment and sustainable development

ShapeNZ July 2010 survey 450 business decision makers , 1810 employees. Maximum margin of error +/- 4.2%.


Are you turning staff into advocates?

• 59% (67% managers) would consider leaving any organisation whose corporate g y gresponsibility behaviour no longer meets their expectations

• 46% of employees (53% of managers)• 46% of employees (53% of managers) would not recommend their organisation to others if it were environmentally irresponsible

ShapeNZ July 2010 survey 450 business decision makers , 1810 employees. Maximum margin of error +/- 4.2%.


How are some majors selling it?M&S W l M t T ll t t i bilit i f ti l b l d t f

Marks and Spencer’s A Plan: by 2015

M&S, Wal-Mart, Tesco all want sustainability information on labels and reports from all suppliers: to join major supply chains you need to get on the sustainability road

Converting 2.7 billion food, clothing and home items to meet sustainability standards;

Encouraging 21 million customers to live more sustainable lifestyles;Encouraging 21 million customers to live more sustainable lifestyles;

Liveable wages, training, education, basic healthcare and workers’ rights for 500,000 workers in suppliers’ factories;

Encouraging 10,000 food supplying farmers to adopt a sustainable foods programme;

Sourcing all packaging from a single model forest programme;

Increasing the number of clothing garments customers recycle every year from 2 million to 20 million.


How does your thinking compare with CEOs worldwide?CEOs worldwide?

Global Compact’s 2010 survey of 1000 of CEOs worldwide: by the numbers:worldwide: by the numbers:

• 93% of CEOs believe that sustainability issues will be critical to the future success of their business

• 72% cite “brand, trust and reputation” as one of the top three factors driving them to take action on sustainability issues. Revenue growth and cost y greduction is second with 44%.

• 72% see education as the global development issue most critical to address for the future success of theirmost critical to address for the future success of their business. Climate change is second with 66%.


How does your thinking compare with other CEOs?other CEOs?

Global Compact’s 2010 survey of 1000 of CEOs worldwide: by the numbers:worldwide: by the numbers:

• 58% identify consumers as the most important stakeholder group that will impact the way they

i t l t ti E lmanage societal expectations. Employees were second with 45%.

• 91% report that their company will employ new p p y p ytechnologies (e.g., renewable energy, energy efficiency, information and communication technologies) to address sustainability issues over the next five yearsnext five years.


How do you compare with NZ peers?• 75 out of every hundred senior executives and New Zealanders overall believe businesses should make a profit and contribute to the social good. Have SD strategy

• 44% of NZ decision makers say their organisation has a sustainable development strategystrategy

• Nearly 1 in 5 firms have sacked a supplier in the past year over environmental, social or ethical

Deselected suppliers

concerns

• 25% are actively buying goods and services for their organisations from suppliers who act

ShapeNZ July 2010 survey 450 business decision makers consumers. Maximum margin of their organisations from suppliers who act

sustainably. g f

error +/- 4.2%.


Is it your best opportunity to lift profits?

Revenue lines are not growing as fast as hoped for most businesses

Sustainability may be the best cost cutting opportunity to lift profits in a recession:

• Helping the planet and people by using energy and water more effectively reduces waste and costeffectively reduces waste and cost

• Staff are more likely to engage in helping cut costs, helping themselves and planet as well as shareholders

• Accor Hotels found energy efficient light bulbs cut power bills, but dramatically cut the cost of paying people to change bulbs which lasted 10 times longer. Fonterra has saved the equivalent of the entire electricity10 times longer. Fonterra has saved the equivalent of the entire electricity use of Hamilton


Is it your best opportunity to lift profits?Most businesses can reduce energy and emissions by

• measuring and monitoring emissions (see www.nzbcsd.org.nz for our leading emissions calculator)

• buying or using more energy efficient vehicles (using GPS alone in the entire central and local government fleet would deliver a $50 million a year saving!)

• replacing air travel to meetings with video conferencing – roll on faster broadband

• moving to better insulated premises, also improving staff healthmoving to better insulated premises, also improving staff health

• moving to LED lighting in retail areas will cut frozen food display, heating and air conditioning costs

During economic growth this may not have been the best profitability opportunity available . Now it may be the only one


Outcomes for Members from their business’ sustainable development

Is it your best opportunity to lift profits?

practices or initiatives in the past 12 months

• Brand: Enhanced brand value 81% (73% in 2008)• Opportunity: Identified new business opportunities 69% (82%)• Opportunity: Identified new business opportunities 69% (82%) • Savings: Cutting costs 62% (47%)• Staff: Attracting and keeping staff 44% (64%)

Changes in the past three years reflect increased value of cost savings in tougher economic times, and rising brand values

- Business Council Member survey


Why it’s the right thing to do• You and your staff will feel good about it• You and your staff will feel good about it

• It engages staff and maximises their commitment to the business

• It provides a good opportunity to lift profits

• Helps position you and NZ for the future

• Helps recruit the smartest young talent who believe this is the way the world has to be

H l li i h 100% P b di hi h 80% f h i• Helps us align with our 100% Pure branding, to which 80% of the economy is now linked

• It will help you survive the most difficult business environment in 20 yearsIt will help you survive the most difficult business environment in 20 years

• It’s what your customers expect of you

h k


Thank youGraeme Colman

[email protected]

the power of green: what bi dtk b tbusiness needs to know ... · the power of green: what bi dtk b...

Documents