Thumbs Down on Corporate Green Efforts

The corporate sector has gone to great lengths in recent years to persuade consumers of its commitment to environmental sustainability. But consumers aren’t buying it, to judge by the results of a study released this month by Gibbs & Soell Public Relations. Nor, for that matter, do corporate executives — queried in a parallel survey — necessarily think companies are deeply committed to going green.

In polling for the Gibbs & Soell Sense & Sustainability Study, fielded in July by Harris Interactive, just 16 percent of consumers said they believe most or all businesses “are committed to ‘going green’ — that is, improving the health of the environment by implementing more sustainable business practices and/or offering environmentally friendly products or services.” Forty-eight percent said “some” companies have such a commitment, while 24 percent said it’s true of “a few” and 1 percent that it’s true of “none.” (The rest weren’t sure one way or another.)

Is this merely a case of consumers taking a free shot at the seldom-loved corporate sector? It’s harder to dismiss the consumer findings in that fashion when you look at the responses gathered among executives at Fortune 1000 companies. Even among these respondents, just 29 percent expressed agreement that most or all businesses are committed to going green. Fifty-four percent said “some” and 15 percent said “a few” have such a commitment.

Then again, the executives pin some responsibility for this on consumers. When asked to identify “the barriers, if any, to more businesses ‘going green,'” 71 percent of the survey’s executives cited “consumers’ unwillingness to pay a premium for green products or services.” That put this factor second only to “not enough return on investment” (cited by 78 percent of the executives) and well ahead of “lack of commitment from senior leadership” (34 percent) and “internal opposition or lack of consensus” (20 percent).

Consumers often affirm their own willingness to adopt “sustainable” behavior as shoppers, but corporate executives have their doubts about what this amounts to in practice. “While surveys consistently show consumers have a preference, and even a willingness to pay a premium, for green products, the question is often asked without the full context of performance and convenience,” notes Ron Loch, senior vp for greentech & sustainability at Gibbs & Soell. “I believe executives feel that at the point of purchase, performance and convenience trump sustainability for most consumers. If there is at least parity, then ‘green’ can be an effective differentiator for which consumers may even pay a slight premium. If the product doesn’t deliver the desired results or requires additional steps or equipment, then it probably won’t succeed regardless of how green it is.” 

When companies have taken steps to make their products and services environmentally sound, they naturally want to brag about it. But this can be a trap if not done carefully. “I think the important message for marketers is that they can’t let enthusiasm for promoting green features and benefits result in not talking enough about the product’s performance,” says Loch. “Consumers care about the environment, but they are skeptical and pragmatic. They still need to understand the full value proposition before they’re going to shell out their hard-earned dollars.”

Companies aren’t eager to lay out their own hard-earned dollars if they’re not sure of a payback, and this is reflected in staffing (or lack thereof) devoted to initiatives in sustainability. More than two-thirds of the executives said their company has people who are responsible for sustainability, but “most have merely added green efforts to the primary duties of a team, or C-suite or senior-level position.” Just 25 percent of the executives said their own company has a high-level person or a team “specifically/solely dedicated to sustainability and/or ‘going green.'” Even in companies with 10,000-plus employees, the figure is a lackluster 31 percent.

When companies are taking serious steps to advance sustainability, are they adept at conveying this to consumers? “I don’t think enough companies are doing all they can to communicate their green efforts,” says Loch — despite the fact that surveys of CEOs “have shown that a majority of large companies see sustainability as a business imperative.” The lack at many companies of senior people whose turf consists of sustainability is part of the problem here. “This creates an internal disconnect that doesn’t allow their green story to be told,” says Loch. “For example, operations may be reducing the energy and water used in manufacturing, but the story isn’t shared externally because there isn’t a green steward to engage the communications team. If companies did an inventory of everything going on within their organizations, they would find a wealth of examples with which to build their sustainability credentials.”

That’s not to say consumers would be readily inclined to take such credentials at face value, particularly given the common suspicion that companies are engaging in “greenwashing.” Naturally, this makes life more difficult for companies whose green efforts are genuine and substantial.

“Given the general level of distrust of companies that exists right now among mainstream consumers, any greenwashing story that hits the general press undermines all companies who have a sustainability message,” says Loch. “Consumers see it as just another reason why they should be skeptical of marketing claims. An unfortunate aspect to this is that companies may hold back on communicating about their progress toward sustainability for fear of being accused of greenwashing. That’s what can create the level of skepticism we see among executives in this survey and will invariably slow the progress of the sustainability movement.”

Companies that are truly green need to overcome their fear of being suspected of greenwashing when they publicize their efforts: “As long as companies are transparent in their communications and don’t overstate the social and environmental impact of their efforts, they can avoid being painted with the greenwash brush,” says Loch. “It gets back to the need of really taking inventory of what is happening throughout the organization and then weaving that into a compelling, credible and defensible narrative.”

Since few consumers believe a majority of companies are serious about sustainability, it’d be nice to think they’re eager to reward those corporations they perceive as doing the right thing in this area. But it doesn’t seem to work that way.

“Given the recent banking crisis and BP oil spill, consumers are reluctant to express optimism about Corporate America’s good intentions in general,” says Loch. “It’s comparable to polls about Congress. People generally disapprove of Congress, but support their representative. I think consumers may generally distrust ‘Corporate America,’ but like the companies with which they do business. In that sense, they probably are more impressed when ‘their’ companies go green and are more skeptical of claims from companies with which they don’t have a relationship.”