Sustainability is an Economic Imperative: The 2012 CK Prahalad Award Winners (Video)

See how the 2012 winners of CK Prahalad award are weaving sustainability into their business models and flourishing in the process. Companies like Unilever and Sustainable Apparel Coalition are leading the way and showing that the business case for sustainability is undeniable. As explained in this video sustainability is an imperative for all companies. The questions that must be asked is how can you have a business model that continues to take away from future generations? Any company that does not pay attention to its environmental interface is doing so at its own peril. The companies in this video prove that commitments to sustainability initiatives pay off while the failure to engage sustainability poses a very serious risk.

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The 8 C's of Sustainability Branding by Marc Stoiber

In 2010, Marc Stoiber, creative director, writer, innovator and green brand specialist wrote a piece called the 5C’s of Sustainability Branding. In 2012 he has added some new C's. Here is his original 5C’s, followed by his new C's for 2012.

The 5C’s of Sustainability

1. Consumer-Facing - Not sure what to do first? Look at what the consumer is looking at. There are plenty of ways to improve corporate sustainability, but consumer-facing changes will have the most immediate impact on your brand’s public perception. Think of Method’s Omop, with its compostable / recyclable bamboo and paper packaging – it stands out like a beacon at shelf, where consumers can really notice the difference.

2. Competitive - To compete, brands must innovate. And in the 21st Century, the best innovations will have strong sustainability credentials. Concepts like GE’s Ecomagination are just the thin edge of the wedge. With price and quality being equal, the competitive advantage will go to brands that differentiate themselves with sustainability features.

3. Core – Tying sustainability to a brand’s core business is another way to ensure it resonates with consumers. If your brand sells hamburgers, effective brand sustainability strategy would focus on hamburgers (organic beef or recycled wrappers, for example). Car brands must focus on making more fuel-efficient, cleaner cars – not saving the rainforest. If you do something that is unrelated to your core business, you risk alienating or confusing your consumers at best – and having them holler ‘greenwash’ at worst. Brands like Clorox Greenworks hit this one on the mark.

4. Conversational - Sustainability branding is more effective as a two-way conversation, rather than a one-way announcement. Honesty and transparency go a long way with consumers. Disclosing what you’re doing well, and what you could be doing better, will instil trust…and trust breeds loyalty. Inviting consumers to participate in a conversation about your process will further strengthen the brand-consumer relationship. Think of Patagonia’s Footprint Chronicles – an online tool that helps consumers understand Patagonia’s strides in making their shirts and pants more sustainably…and see the environmental shortcomings of Patagonia’s products as well.

5. Credible - Sustainability strengthens brands. But greenwashing, even if unintended, can do a brand serious harm. The good news is that this is avoidable. The key is in sequence. As long as your sustainability efforts are in place, functioning and measurable before being announced, they will be viewed as credible. And proven, objective credibility – when paired with innovation that excites and communication that clarifies and engages – is the key to sustainable brand success.

New C’s For 2012

6. Collaborative – The London Olympics were a symbol of the new coming-together of sustainable brands. Not only did it provide a fantastic showcase that took green from being fringe to matter-of-fact, but it also allowed green suppliers of all stripes to share notes and strike partnerships. More and more, brands with sustainability credentials are banding together to create standards, buying strength and consumer confidence.

7. Certified – Sure, there were certification programs in 2010. But today, more companies are going further, forming creative partnerships with NGO’s. So instead of merely getting a certification label, you’re getting a partnership that can spur innovation.

8. Quiet – OK, it isn’t a C. But it sounds like one. And it’s one of the most striking features of green brands I’m seeing today. To wit: companies are treating sustainability as the right thing to do across operations, supply chain and governance, not a remarkable (and often short-lived) product feature. So we’re seeing more sustainability built in, and less sustainability talk. This may also be symptomatic of the increased vigilance brands are experiencing from citizen journalists armed with thousands of twitter followers.

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Sustainability Offers a Competitive Advantage & Better ROI

According to the 2012 Carbon Disclosure Project (CDP) report, sustainability makes companies more competitive and offers investors better returns. This is driving an increasing number of publicly traded companies to embrace sustainability as part of their long-term strategy to combat climate change. The CDP gathers information for investors about the environmental policies of large companies and the environmental risks they face. The CDP has created an index to recognize the world's best companies called the Carbon Performance Leadership Index (CPLI). The companies that make it onto these lists tend to generate superior returns for investors.

"Our focus is less on payback periods and more on targeting environmental investments to be 'value positive," Deirdre Mahlan, Diageo's CFO, said. "It is insufficient, and even irresponsible, to consider only short term payback when making investment decisions."

"An investment in a basket of stocks of CPLI companies following the publication of CDP's global report each year since 2006 and rebalanced on any annual basis to reflect that year's CDLI would have generated total returns of 67.4 percent, more than double the 31.1 percent return of the Global 500," write the CDP report authors. "Moreover, past CPLI companies generated average total returns of 15.9 percent since 2010, more than double the 6.4 percent return of the Global 500."

The Carbon Disclosure Project’s report concludes: “Those companies that have an awareness of long-term climate-change risks and opportunities reflected in their business strategy will gain strategic advantage over their competitors.”

For more information click here.

© 2012, Richard Matthews. All rights reserved.

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Top Climate Innovators

GE, Alcoa, Johnson Controls, Ford, Intel and Hess are leaders in the innovation of clean-tech solutions and products, mitigation of climate change-related risks and management of carbon emissions, according to a rating by risk analysis company Maplecroft.

 The Maplecroft Climate Innovation Indexes (CIIs) studied 360 large, multinational U.S. companies and how they adapt to climate-change issues. Maplecroft rated each company on over 100 criteria, including: innovation in technologies and working practices to combat the onset of climate change, management of physical climate-related issues and adaption to climate-related risks.

Participating companies are provided with their scorecard to facilitate reporting and future engagement in the annual review of the indexes. Companies are also provided with their full completed questionnaire on request to cii@maplecroft.com.

Participating companies are provided with their scorecard to facilitate reporting and future engagement in the annual review of the indexes. Companies are also provided with their full completed questionnaire on request to cii@maplecroft.com.

Here are some of the leading scores and the companies to which they correspond:

71.921: General Electric Co
71.432: Alcoa Inc
70.533 Johnson Controls Inc
69.544: Ford Motor Co
66.955: Intel Corp
64.986: Hess Corp
64.427: Air Products & Chemicals Inc
61.588: Praxair Inc
61.379: United Technologies Corp
60.9310: Autodesk Inc
59.1411: Covanta Holding Corp
58.8012: PG&E Corp
58.6413: Goldman Sachs Group Inc/The
58.5414: Life Technologies Corp
57.6415: Lexmark International Inc
57.2416: Weyerhaeuser Co
56.7017: Coca-Cola Enterprises Inc

To download overall index rankings and scores click here. Scorecards providing a detailed breakdown of overall scores for every company, plus insight into strengths and challenges are available for purchase either as a sector bundle or for the entire CII Benchmark. To access the CII Report – ‘Results, trends and leaders in the evolving landscape of Climate Innovation’ – full report, results and analysis, April 2012 contact Maplecroft at info@maplecroft.com.

© 2012, Richard Matthews. All rights reserved.

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