Recent research led by Timothy Devinney, professor of strategy at the University of Technology, Sydney has found that most people will not sacrifice product function for ethics. The research team concluded that proponents of ethical consumerism want to believe that people make socially oriented choices that override a general appraisal of product features and functionality but that this is a delusion. This looks to me like common sense, but it is useful to have hard research to back up my gut feeling.
The ethical consumer is an elusive person. I pay a premium in my local shop for eco cleaning products as I want the shop to stay in business; it is a short walk from my front door and over the long-term I will save by spending less on transportation, but the product has to work well and the premium has to be small. Even though I am a passionate advocate for sustainability I will not be persuaded to buy a sub standard product just because it claims to be green.
Green and ethical factors will become increasingly important to close sale transactions ranging from major corporate contracts to the sale of individual items. Such factors will be the deal clincher but green will not override the prime metrics of value-for-money and fit-for-purpose. First-class green products will dominate the market place in the future; second-class products that are green will sink without trace.
Companies should not plan to rely on ethical consumerism to underpin the business. Customers want quality and value; sustainable business is about delivering the required quality at a competitive price using sustainable processes. The payback comes from being ahead of the next ratchet up of government regulation and gaining some protection from the next hike in the price of energy and other resource inputs. There are numerous reasons to put sustainability at the core of business strategy but being able to sell to ethical consumers is very low down on the list of priorities.
Monday, 23 May 2011
Monday, 16 May 2011
The Government Litmus Test
At today’s cabinet meeting, the UK government has an important decision to make over the carbon budget for the period 2013-2023. Which way this decision goes has significance beyond the particular issue; it will set the tone for the remaining term of the coalition government and either reinforce David Cameron’s intention expressed a year ago ‘to be the greenest government ever’ or show that the vision has been killed by realpolitik.
The Committee on Climate Change (CCC), the independent body of experts to advise the UK Government on setting carbon budgets, has put forward its recommendations. Chris Huhne, the Energy and Climate Change Secretary want the recommendations adopted. Vince Cable, the Business Secretary is opposed; worried at the impact on competiveness for UK industry if the UK adopted more ambitious targets than the rest of Europe.
The discussion today in 10 Downing Street is between the policy required to make progress towards a low-carbon Britain and protecting the current economy. This dilemma is right at the heart of sustainability. In a complex modern economy everything connects, every action has a consequence. Looking too closely at consequences leads to stalemate and inaction. There is always a good reason why something cannot be done.
The differences between the society we live in today and a sustainable society are huge. It is not just the need to change energy systems, to replace conventional power stations with renewable sources; it is also about demand reduction leading to different ways to design our cities and different ways to live. This is not a reversion to the past but a leap forward to a new age of prosperity measured by quality of life in place of crude economic measures.
The changes are revolutionary, and to get there requires a revolution, the Sustainable Revolution. Governments need to adhere to principle and face down the doubters and representatives of special interest groups. To agree a tight carbon budget at the meeting today, in line with the proposals from the CCC, mean that the revolution has a chance to proceed. Significant watering down or back-peddling will put progress on hold and mean that the difficulty and disruption in the long-term will be greater than necessary. The sooner we embrace the revolution the less disrupting it will be; delay because of the perceived difficulties makes acceptable solutions much harder to find.
This is the Litmus test for this government’s green credentials.
The Committee on Climate Change (CCC), the independent body of experts to advise the UK Government on setting carbon budgets, has put forward its recommendations. Chris Huhne, the Energy and Climate Change Secretary want the recommendations adopted. Vince Cable, the Business Secretary is opposed; worried at the impact on competiveness for UK industry if the UK adopted more ambitious targets than the rest of Europe.
The discussion today in 10 Downing Street is between the policy required to make progress towards a low-carbon Britain and protecting the current economy. This dilemma is right at the heart of sustainability. In a complex modern economy everything connects, every action has a consequence. Looking too closely at consequences leads to stalemate and inaction. There is always a good reason why something cannot be done.
The differences between the society we live in today and a sustainable society are huge. It is not just the need to change energy systems, to replace conventional power stations with renewable sources; it is also about demand reduction leading to different ways to design our cities and different ways to live. This is not a reversion to the past but a leap forward to a new age of prosperity measured by quality of life in place of crude economic measures.
The changes are revolutionary, and to get there requires a revolution, the Sustainable Revolution. Governments need to adhere to principle and face down the doubters and representatives of special interest groups. To agree a tight carbon budget at the meeting today, in line with the proposals from the CCC, mean that the revolution has a chance to proceed. Significant watering down or back-peddling will put progress on hold and mean that the difficulty and disruption in the long-term will be greater than necessary. The sooner we embrace the revolution the less disrupting it will be; delay because of the perceived difficulties makes acceptable solutions much harder to find.
This is the Litmus test for this government’s green credentials.
Monday, 9 May 2011
Where is the ethical consumer?
A lot of hype surrounds the opportunities to supply ethical consumers, but who are they, and how big is this new customer segment? Ethical or green consumers are people who search out green, low-carbon, fair-trade and sustainable products. Such customers read the labels carefully to understand the product, and how it has been produced, and select the product with the greenest and most ethical credentials. There is a confusing array of logos to help them make their choice, spanning the range from the Forest Stewardship Council (FSC) and Marine Stewardship Council (MSC) to the Fair Trade mark and a variety of recycling symbols. Some of these are backed up by robust certification; others can be displayed with little independent evaluation. The assumption is that a growing number of people use such labelling to change their buying behaviour.
I take a close interest in the labelling of products because it is a fascinating and evolving area and I have a very critical eye. When I spot a product with a lot of unnecessary packaging and a prominent recycling symbol, I am not impressed. When the symbol has written beside it the words, ‘packaging not currently recyclable,’ I am even less enamoured. Do the manufacturers think that my subconscious will spot the recycling symbol without reading the words; or that I will warm to the knowledge that the company is aware that it needs to improve but so far has done little to correct its operations?
I am the green marketeer’s least favourite customer. When I spot a green-spin marketing campaign my antennae are searching for substance. Where the company has made real progress and implemented sustainable change, I am suitably impressed and likely to pay a small premium. Where I sniff the aroma of ‘greenwash’, I take delight in digging deeper if there is hypocrisy to expose.
As the cohort of people who understand the sustainability agenda grows, companies that don’t get it will inflict deep self-inflicted wounds. The slick glossy advert using pictures of beautiful nature in a superficial context will come back to haunt old-school marketing executives. Some of the advertising campaigns that have used a green theme in recent years will have ridicule heaped upon them as real sustainability moves into the mainstream.
I take a close interest in the labelling of products because it is a fascinating and evolving area and I have a very critical eye. When I spot a product with a lot of unnecessary packaging and a prominent recycling symbol, I am not impressed. When the symbol has written beside it the words, ‘packaging not currently recyclable,’ I am even less enamoured. Do the manufacturers think that my subconscious will spot the recycling symbol without reading the words; or that I will warm to the knowledge that the company is aware that it needs to improve but so far has done little to correct its operations?
I am the green marketeer’s least favourite customer. When I spot a green-spin marketing campaign my antennae are searching for substance. Where the company has made real progress and implemented sustainable change, I am suitably impressed and likely to pay a small premium. Where I sniff the aroma of ‘greenwash’, I take delight in digging deeper if there is hypocrisy to expose.
As the cohort of people who understand the sustainability agenda grows, companies that don’t get it will inflict deep self-inflicted wounds. The slick glossy advert using pictures of beautiful nature in a superficial context will come back to haunt old-school marketing executives. Some of the advertising campaigns that have used a green theme in recent years will have ridicule heaped upon them as real sustainability moves into the mainstream.
Monday, 2 May 2011
Water - Clear Gold
Water when you have copious quantities is worthless; if you don’t have any it is more valuable than gold.
Water is available in abundance on our planet and we assume that it will always be available when and where we need it. People who live in desert regions know this not to be so. On a journey from one oasis to another you have to carry enough to make the journey, trusting and hoping that the water at the next oasis is clean and potable. Living in the wet and winding isles of Britain, water has never been much of a concern. When the reservoirs run low in a long hot summer hosepipe bans are introduced to conserve supplies, but we can be confident that the water will continue to flow when we turn on the tap.
After the hottest and driest April since records began we have been basking in delightful warm weather. The farmers are not pleased at this critical stage in the development of their crops. We hope and assume that the weather will break and the dry soil brought back to life but what if our weather patterns are changing? It is highly unlikely that Britain, an island surrounded by water would become a desert but we should be aware that in places where rainfall is less certain, there is a real danger that small changes in climate lead to drought and the formation of deserts. If is possible that the UK crops could fail we would be worried; if the crops failed two years in a row we would be very worried; in the third year of no rain we would be feeling very vulnerable indeed. These are the thought we must entertain if we are to have empathy for people living in vulnerable regions.
Our local water company, Thames Water is making preparations. Last year the Beckton desalination plant was commission to make water from the Thames estuary and process it into potable water. This is the technology more normally associated with desert regions and uses energy to desalinate the water. Climate change lead to less rainfall, leads to more desalination plants using more energy leading to more carbon dioxide emissions, leading to further pressure on the climate. Am I the only person to query whether we should break this self reinforcing cycle?
There is one way to break this particular cycle; nearby there is the Beckton sewage works. It would use much less energy to take the water coming out of the sewage works and process that back into the system as potable water. Clear gold from sewage – why not?
Water is available in abundance on our planet and we assume that it will always be available when and where we need it. People who live in desert regions know this not to be so. On a journey from one oasis to another you have to carry enough to make the journey, trusting and hoping that the water at the next oasis is clean and potable. Living in the wet and winding isles of Britain, water has never been much of a concern. When the reservoirs run low in a long hot summer hosepipe bans are introduced to conserve supplies, but we can be confident that the water will continue to flow when we turn on the tap.
After the hottest and driest April since records began we have been basking in delightful warm weather. The farmers are not pleased at this critical stage in the development of their crops. We hope and assume that the weather will break and the dry soil brought back to life but what if our weather patterns are changing? It is highly unlikely that Britain, an island surrounded by water would become a desert but we should be aware that in places where rainfall is less certain, there is a real danger that small changes in climate lead to drought and the formation of deserts. If is possible that the UK crops could fail we would be worried; if the crops failed two years in a row we would be very worried; in the third year of no rain we would be feeling very vulnerable indeed. These are the thought we must entertain if we are to have empathy for people living in vulnerable regions.
Our local water company, Thames Water is making preparations. Last year the Beckton desalination plant was commission to make water from the Thames estuary and process it into potable water. This is the technology more normally associated with desert regions and uses energy to desalinate the water. Climate change lead to less rainfall, leads to more desalination plants using more energy leading to more carbon dioxide emissions, leading to further pressure on the climate. Am I the only person to query whether we should break this self reinforcing cycle?
There is one way to break this particular cycle; nearby there is the Beckton sewage works. It would use much less energy to take the water coming out of the sewage works and process that back into the system as potable water. Clear gold from sewage – why not?
Friday, 22 April 2011
‘Black Gold’ to ‘Dirty Oil’
Whilst the world economy is critically dependent on oil, the sticky black liquid is referred to as ‘Black Gold’ and a passport to wealth and security for any country fortunate enough to be blessed with large easy-to-extract reserves. For Norway this has certainly been the case; the country has been prudent with its oil revenue and built up huge reserves which should underpin the country’s finances well beyond the end of oil. For the Middle East, oil is beginning to look like a curse, allowing autocratic (and sometimes despotic) rulers to remain in control. Oil revenue allows them to buy off opposition and purchase weapons to enforce their rule. In addition, the economic imbalances of oil leave many exporting countries ill-prepared to pay their way in the world beyond the era of oil.
When the world makes the transition away from oil (inevitable, only the timing is uncertain) the image of oil will shift from ‘Black Gold’ to ‘Dirty Oil’ – the term already in use by environmentalists for the oil extracted from the tar sands of Canada. This image makeover is small but important, as it will signal real commitment to reducing oil dependency. Instead of countries outbidding each other to purchase black gold they will compete to lead in the technologies that make dirty oil unnecessary.
It is unlikely that the world will learn quickly to live without conventional oil whilst there are supplies that are easy to extract. As the oil price rises, making unconventional oil commercially viable, the energy intensive extraction techniques and environmental damage will be highlighted. A well head in the desert is not a particularly negative image; it is associated with power and wealth. The large expanse of wasteland from oil sand extraction, where once there was virgin forest, is a powerful negative image of dirty oil.
The shift in perception from ‘black gold’ to ‘dirty oil’ is just terminology but in a world dominated by ubiquitous media, images are a very powerful force (as advertisers know well). There is no alternative in the short-term to reliance on oil but the path to a sustainable future becomes much clearer and more politically acceptable when the image in people’s minds of ‘black gold’ is replaced by ‘dirty oil’.
When the world makes the transition away from oil (inevitable, only the timing is uncertain) the image of oil will shift from ‘Black Gold’ to ‘Dirty Oil’ – the term already in use by environmentalists for the oil extracted from the tar sands of Canada. This image makeover is small but important, as it will signal real commitment to reducing oil dependency. Instead of countries outbidding each other to purchase black gold they will compete to lead in the technologies that make dirty oil unnecessary.
It is unlikely that the world will learn quickly to live without conventional oil whilst there are supplies that are easy to extract. As the oil price rises, making unconventional oil commercially viable, the energy intensive extraction techniques and environmental damage will be highlighted. A well head in the desert is not a particularly negative image; it is associated with power and wealth. The large expanse of wasteland from oil sand extraction, where once there was virgin forest, is a powerful negative image of dirty oil.
The shift in perception from ‘black gold’ to ‘dirty oil’ is just terminology but in a world dominated by ubiquitous media, images are a very powerful force (as advertisers know well). There is no alternative in the short-term to reliance on oil but the path to a sustainable future becomes much clearer and more politically acceptable when the image in people’s minds of ‘black gold’ is replaced by ‘dirty oil’.
Monday, 11 April 2011
Prosperity without Growth
I have been off my blog for a couple of weeks whilst I hit a deadline to finish the manuscript of my next book. That is now with the publisher so I have time to withdraw from my shell and engage with the outside world again, spend time with the family and read what others are writing.
The paperback version of Tim Jackson’s book, Prosperity without Growth: Economics for a Finite Planet landed on my doorstep last week for me to review. This is well timed and I am looking forward to reading again Tim’s ideas. His original report for the SDC (under a similar title) raised a number of important questions about the way we run the economy and the priorities that are set. These are very important questions that need to be debated to discuss how the management of society could be different.
The first stage is to question what we have. Anyone who believes that the economic system is perfect has been living on another planet for the last few years. For those who believe that it is the best system available in an imperfect world, this is a valid viewpoint but at best lacks ambition and at worst is plain wrong.
The rescue of the economy following the financial crisis has been a process of papering over the cracks and restoring confidence. If an estate agent was selling the world economy, the financial edifice would look impressive, large and gleaming with a new coat of paint but buyers should take care to examine the foundations and check what lies behind the new wallpaper. A qualified surveyor would need to be employed to do a full structural survey, who may report that the house appears to be in good order but without access to the basement or the authority to peel back the wallpaper there is no way of being sure. When I talk with economists I get a range of views. I met one in Helsinki who believed that the crisis was now behind and the world economy safe. If you have a role in selling the house, then nothing is wrong, but if you an expert impartial observer you would be very wary of claiming that the crisis is past.
Prosperity without Growth raises important questions; we need to peel back the confidence building statements of central bankers and mainstream economists to look for the answers to how the economy can support a sustainable society.
The paperback version of Tim Jackson’s book, Prosperity without Growth: Economics for a Finite Planet landed on my doorstep last week for me to review. This is well timed and I am looking forward to reading again Tim’s ideas. His original report for the SDC (under a similar title) raised a number of important questions about the way we run the economy and the priorities that are set. These are very important questions that need to be debated to discuss how the management of society could be different.
The first stage is to question what we have. Anyone who believes that the economic system is perfect has been living on another planet for the last few years. For those who believe that it is the best system available in an imperfect world, this is a valid viewpoint but at best lacks ambition and at worst is plain wrong.
The rescue of the economy following the financial crisis has been a process of papering over the cracks and restoring confidence. If an estate agent was selling the world economy, the financial edifice would look impressive, large and gleaming with a new coat of paint but buyers should take care to examine the foundations and check what lies behind the new wallpaper. A qualified surveyor would need to be employed to do a full structural survey, who may report that the house appears to be in good order but without access to the basement or the authority to peel back the wallpaper there is no way of being sure. When I talk with economists I get a range of views. I met one in Helsinki who believed that the crisis was now behind and the world economy safe. If you have a role in selling the house, then nothing is wrong, but if you an expert impartial observer you would be very wary of claiming that the crisis is past.
Prosperity without Growth raises important questions; we need to peel back the confidence building statements of central bankers and mainstream economists to look for the answers to how the economy can support a sustainable society.
Monday, 28 March 2011
Electric Cars –To Buy or not to Buy
To buy, or not to buy: that is the question:
Whether 'tis nobler in the mind to suffer
The fumes and noise of conventional cars,
Or to take arms against our carbon troubles,
And buy an electric car.
Buying an electric car is a very small step to a greener lifestyle. The contribution to carbon reduction is minimal (until the electricity supply is decarbonised) but change has to start somewhere. The future will include electric cars and someone has to act as trailblazers to work out how an electric-car lifestyle works. There has to be a coming together of people’s expectations with the cars for sale. The car makers have to refine the technology using feedback from the early adopters to get the product optimised.
Current electric cars are being designed to deal with the expectations of conventional car drivers. Looking inside the bonnet of the Nissan Leaf, there is an aluminium cover that gives the appearance of a conventional engine; there is no need of course; the electric motor is a small item hiding away underneath.
Over time the designers will not need to masquerade their design to look like a conventional car but be able to take pride in being electric. The challenge requires innovative and cool design that appeals to the car-buying public.
I like the Nippy BMW E-mini but it is not a production car and is not on sale. I would like to buy a Tesla but that would be an expensive indulgence and not much use as a family car. I have decided to buy the slower, rather dull but practical Nissan leaf. I look forward to learning more about living with a production electric car.
Of course in all this discussion of electric cars, the much bigger step towards greener behaviour is not to use the car, by shopping locally, living close to our place of work and using the bicycle for short local journeys. The bigger challenge is not designing better electric cars but designing society better to be less reliant on the car.
Whether 'tis nobler in the mind to suffer
The fumes and noise of conventional cars,
Or to take arms against our carbon troubles,
And buy an electric car.
Buying an electric car is a very small step to a greener lifestyle. The contribution to carbon reduction is minimal (until the electricity supply is decarbonised) but change has to start somewhere. The future will include electric cars and someone has to act as trailblazers to work out how an electric-car lifestyle works. There has to be a coming together of people’s expectations with the cars for sale. The car makers have to refine the technology using feedback from the early adopters to get the product optimised.
Current electric cars are being designed to deal with the expectations of conventional car drivers. Looking inside the bonnet of the Nissan Leaf, there is an aluminium cover that gives the appearance of a conventional engine; there is no need of course; the electric motor is a small item hiding away underneath.
Over time the designers will not need to masquerade their design to look like a conventional car but be able to take pride in being electric. The challenge requires innovative and cool design that appeals to the car-buying public.
I like the Nippy BMW E-mini but it is not a production car and is not on sale. I would like to buy a Tesla but that would be an expensive indulgence and not much use as a family car. I have decided to buy the slower, rather dull but practical Nissan leaf. I look forward to learning more about living with a production electric car.
Of course in all this discussion of electric cars, the much bigger step towards greener behaviour is not to use the car, by shopping locally, living close to our place of work and using the bicycle for short local journeys. The bigger challenge is not designing better electric cars but designing society better to be less reliant on the car.
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