Sunday, 13 May 2007

Article for Medicat, June


Recent research in the UK and US, by Landor associates, has confirmed what many commentators were saying; we have reached ‘a tipping point’ in public green concerns. One year ago the Landor survey found that green attitudes, behaviours and knowledge were limited to a hippy-style minority. This year they found “universal support for green thinking”. Literally everyone among the thousands surveyed in the UK and USA said they had green concerns and were changing their behaviour. Landor described their findings as marking one of the most “complete and speedy revolutions in consumer attitudes ever seen”.

What this has meant for brands is firstly that customers are demanding environmentally friendly products – fuel efficient cars, organic food, energy efficient products – and are prepared to pay more for these, seeing them as ‘premium quality’. Secondly people are starting to demand that the business processes behind the products are sustainable, in the way they bring goods to market. And thirdly that people are considering switching brands to ones which rate highly on these qualities – for instance Toyota, Whole Foods and Sub Zero (in the USA survey) next time they purchase.

This change is moving so fast it is hard to keep up. The major supermarkets have already been reducing their carbon emissions, offsetting emissions they cannot reduce, reducing packaging, replacing it with biodegradable corn starch based plastic, stocking organic and fair trade products, including (ahead of mainstream clothing retailers) organic cotton, making energy efficient goods such as light bulbs available. Walmart has even been trialling a green roof on its Chicago store, and a number of bank headquarters in the city of London, such as Barclays, have done the same; putting earth and plants on the flat roof which not only insulates the building and takes out some carbon dioxide, but also benefits city birds and wildlife. The latest green agenda, which large retailers are far from having any answer to is living local; buying local seasonal food, locally produced goods, reducing travel especially flying. It is also suggested we may move past having big retail stores at all; home delivery being much greener.

The only comparable shift in our lifetimes has been the internet revolution. Interestingly Al Gore was a leading figure then too; he popularised the idea of “the information superhighway” and also pushed through a bill in 1991, which funded the development of the mosaic web browser. The early successes had quite a basic character; for instance the Netscape web browser and hotmail. Hit websites were attached to existing enthusiasms, such as the Euro 1996 football site. Companies raced to get ‘an internet presence’ (just as companies are rushing now to announce their sustainability policies). But the true revolution came later; when the internet started meeting new needs and redefining markets. Being able to browse reader reviews and get recommendations has transformed book buying (more books were sold globally in 2006 than ever before). Similarly internet banking, the ability to find out anything about anything through Google, the ability to work from home by PC, to write a blog, to contribute to an encyclopaedia, and to belong to social networks. These are things we would never have been able to do, before the web came along.

I suspect the next stage of green business is in finding similar breakthrough ideas, to meet human needs differently and better. From a green point of view, society is badly organised, badly designed, wasteful. Its also not achieving overall what ‘the American dream’ of consumerism promised; it’s not making people happy. So far the green innovations have been about reducing harm, making existing ways more efficient and less wasteful, recycling, extending product lifetimes and using more considered materials. But it is far from enough. The latest reports on climate change say we need to reduce our impact by 60-90% in the West.

The way to create breakthrough green innovations is simple; focus on the ultimate need, not the current delivery of that need. People need ‘warm homes’ in winter and ‘cool homes’ in summer. With the extremes of weather brought by climate change, these needs are increasing. The answer is not more energy consumption, but better insulation and re-use of heat created by the sun and by other uses like lighting and cooking. 6000 homes and buildings have been built to these ‘Passivhaus’ principles in Germany which require no central heating system, even in quite cold regions.

The truly revolutionary green businesses will be those which redefine our needs. The basic human needs have been channelled (like irrigation channelling rivers) to serve industrial consumerism. People will still value having these needs met, but the green imperative means they must be met in imaginative and much less resource depleting ways.

For example the universal human need for recognition has been channelled by consumerism into luxury goods, which give you status; and fashion goods which show you are up to date; and youth brands which indicate you are ‘cool’. We have already seen how in internet 2.0 you can meet these same needs without buying a thing; you get recognition for a great blog, or a cool video. We have moved from buying designer goods to being designers. With sites like YouTube changing hands for billions of dollars you cant argue this is post capitalism. But it is a new stage of capitalism. Similarly consider how much of advertising and design sells us “beauty”. This is a curious need in that it is felt most strongly in front of things we cannot own, such as a great piece of art or natural view. Beauty can be experienced keenly without shopping or owning. The successful companies of the future will be those that can enrich lives, and meet these kinds of desires, without destroying the planet. It just takes imagination.

The biggest need of all, underlying the ‘tipping point’ shifts in attitudes which the Landor study confirmed, is that of having a meaningful life: a purpose, something to strive for, something which is bigger than our individual needs. In the past this need has been met by religion, politics and capitalist enterprise. Imagine a society where green has the same central standing as these; being a measure of everything, a primary cause.

In summary, this is almost certainly the biggest challenge and opportunity you will ever face in your life and career. If it hasn’t entirely transformed people’s thinking and behaviour yet in your market, it may well do so in the next year. Fortune favours the prepared.



Brandon Larson said...

I love your idea of "ultimate use"...made me think of a product so ubiquitous that we tend to forget its evolution: the mp3. Instead of trying to "shrink the CD", we've abandoned the material good entirely and instead created a vast marketplace around the ultimate desire, music itself. Great article.

John Grant said...

The digitisation as green idea is indeed something overlooked. I'd need a CSR expert to confirm that 1 iPod is better than 200 cds mind. The big breakthrough is going to be digitised and electronic reader format books. Those new generation readers are apparently getting really good on screen defeinition etc. Think of the volume of paper in this world in newsprint, books and magazines. The functionality of searching within books is really cool; I saw it demo'd at the booksellers association conference. Yes this is maybe five years from mass acceptance, but not much more than that is my guess.

John Grant said...

ps I think Amory Lovins, Victor Papenek and others take the credit for the 'ultimate need' insight.

If you search for Tamara Giltsoff's articles on treehugger she writes lots about these service systems, she blogged on it today in fact.