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People Get Sustainability, Business (and Marketers) Don’t: 20 Minutes with the CEO of Unilever

11 Friday Jul 2014

Posted by Aman Singh in Capitalism 2.0, CSR, CSRwire

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Accountability, aman singh, Brand Management, Business, Capitalism 2.0, cause marketing, CEO Network, climate change, consumer behavior, Consumerism, CSR, CSRwire, Edelman, Innovation, integrated reporting, keith weed, Leadership, leadership, marketing, Marketing, millennials, milton friedman, palm oil, paul polman, politics, rainforest alliance, Social Enterprise, Stakeholder Engagement, supply chain, Supply chain management, Sustainability, sustainability, tensie whelan, the rainforest alliance, unilever, unilever ceo, Work culture


Last month, Unilever CEO Paul Polman was in town – New York – to receive the Lifetime Achievement award from the Rainforest Alliance. As Rainforest Alliance President Tensie Whelan put it, “Paul has made several lifetimes of difference by leading Unilever to become a game changer.”

The company’s work with the Rainforest Alliance is well-known – by setting targets like sourcing 100 percent of its palm oil sustainably, Unilever has made it easier for other companies to follow suit and helped complex supply chains become comfortable with change and collaboration.

And, the company hasn’t stopped at palm oil.

Today, roughly 50 percent of the company’s tea originates on Rainforest Alliance Certified farms as it works toward sourcing 100 percent of its raw agricultural materials from sustainable origins (that figure currently stands at 48 percent).

Having recently interviewed Unilever’s Marketing Chief Keith Weed on the company’s refreshed goals and commitments, the opportunity to discuss sustainable development from the vantage point of the outspoken CEO was tempting. We caught up over a quick phone call:

The Unilever Sustainable Living Plan:

“When we launched it we said we don’t have all the answers. One of the reasons why we are working so wellUnilever CEO Paul Polman with Rainforest Alliance is because we share common goals. Take tea for example: Standards are driving up fast in an industry that’s not easy to standardize. [This is where the] scale of Rainforest Alliance is significant – and essential for the USLP to come alive.

“[Its] only been a year since the Rana Plaza fire happened. Those 1,050 women worked in conditions that were little more than modern-day slavery. We’re determined not to let that happen in our supply chain. So we’ve put some goals to match our resolve. We’re going to help more women gain access to training and land rights. The transformation can be substantial.”

Pushing forward in the absence of political will/action:

“In the absence of politicians, we need to move faster. Climate change is a great opportunity for business. Report from the White House is an encouraging sign. Needle is starting to move in the U.S. The tornadoes and hurricanes are starting to drive the message home for people.

“Besides, this is probably the only opportunity we’ll have. The Millennium Development Goals, for instance, are due to be completed next year – the urgency cannot be watered down.”

The most critical challenge for business:

“The biggest challenge is [that] we cannot scale our ambitious goals alone. It’s a major challenge to create the right partnerships and increasingly difficult to get the political sector to participate. How do you create size and scale in a vacuum?”

The changing role of marketers:

“I always say, don’t blame the consumers. There are many examples where consumers are leading business, especially the young ones. They’re changing our lives and systems.

“Consumers are speaking out everyday but we don’t want to see it. Then we say the consumer doesn’t want to change. If we can tap into the enormous movements, we can create change much faster. That’s the job of the modern-day marketers. Their job has changed. It doesn’t work any more to push consumption. We need a new model and get companies to adjust their marketing strategies as well as their job roles.”

People get it, business doesn’t:

“I spend a lot of time on how to develop leaders who can lead us through partnerships, with purpose, can think long-term and beyond 2020. On my way back from Abu Dhabi last month, I was reading an article that reported university students rebelling against the way economics [is being taught]. If teachers are teaching Milton Freidman’s theories, who is going to change the economy? For my kids, sustainability is the new normal. They don’t want to watch TV or buy the newest gas-guzzling car. Their generation is already thinking differently. Yet, marketers keep saying consumers don’t want it.

“Our understanding of consumers [and consumption] is too narrow. We need to get much closer to consumers. If we go to any of the emerging markets – 81 percent of the world’s population lives outside the U.S. and Europe – most of the growth is occurring in climate stretched areas today. They might not understand Rio+20 or climate change language but they know that weather patterns are changing, water is decreasing, etc.”

From mindless to mindful consumption:

“Marketers should switch from asking whether consumers are willing to pay for something to which consumer doesn’t want less poverty, more education, a healthier world with cleaner air and better nutrition.

“We just need to be astute about solutions. Look at the Edelman survey – consumers expect more and more from business, and if business understands this, it is a wonderful time. Children die from diseases which we can solve with hand washing – new market – marketers should be very excited by this. But that connection is not there.”

Three actions to change the world:

“We must get out of short termism because lots of solutions are long-term [climate change, access to education, water shortage, etc.] – and we can only solve them if we invest over longer periods and evaluate the social and economic capital. Then business people can optimize these. For example, 40 of the top 100 companies are already pricing carbon internally. They’ve committed to stay within these limits. Business is leading because they see the cost of action vs. inaction. We have now 40 countries that are pricing carbon including China. We have 20 other countries that are putting a tax on carbon. The system is starting to move.

“We need to give politicians Unilever Sustainable Livingconfidence that this [focus on sustainable development and long termism] will not kill jobs or stifle growth. The exact opposite is in fact true but we need to provide the proof points.

“We need to get companies to adopt integrated reporting quickly as well as become comfortable with transparency. It’s going to take much more than a nine-to-five job to bring all of this together. We need leaders and we’re short on them.”

If this was his last interview as the CEO of Unilever:

“We can use our scale to transform systems and change. We need to create a better place than the one we were born in. Ninety-nine percent of people are not in a position to make a difference. We can. We need to force change – it’s our duty to leave the place in a better place. I hope this drives Unilever and everyone else.”

Originally written for and published on CSRwire’s Commentary section Talkback on June 2, 2014.

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Fighting for the Sustainable Consumer: A Conversation on Branding, Economic Growth, Risk & Value Propositions

11 Friday Jul 2014

Posted by Aman Singh in CSRwire

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advertising, Apple, books, brand management, Brand Management, brands with purpose, Business, consumer behavior, CSR, CSRwire, doshorts, Edelman, gap, henk campher, Innovation, Leadership, levis, marketing, Marketing, PR, seventh generation, social media, Sustainability, sustainability, sustainable consumption, tesla, toms shoes, transparency


Do consumers care about sustainability or the sustainable attributes of products and services? Would you book a “greener” hotel if the prices were comparative? Did you start paying more attention to labels after the Rana Plaza fire?

When the discussion turns to issues like purpose, risk and connecting consumers with sustainability, Henk Campher becomes fidgety. The Senior Vice President for Business + Social Purpose with Edelman has been at this for a while. Between working with brands like Starbucks, Levi’s, Best Buy, Abbott Labs and REI and leading the Oxfam International Coffee Campaign, Campher has built a reputation for challenging the status quo while operating within the trenches of corporate corridors.

Recently, he wrote a DoShorts book titled Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line [get 15% off by using Campher15 in the voucher section] to put some of his strategies and ideas on paper. We sat down for a conversation on the ideas he presents in the book, why he believes that consumers have bought into sustainability, where he sees the PR industry headed as well as his thoughts on separating the chaff from the substance of sustainability claims [Full disclosure: I was one of the reviewers of the book].

Henk_Campher Excerpts:

You write that the problem is not that consumers don’t want to purchase sustainable products, it’s that brands are unable to bring sustainability to life for consumers. Tips?

The most common mistake companies make is to lean too far to either the sustainability of the product or focus too much on how it comes to life for the consumer. The sustainability of a product is only one part of the story – the what part of a sustainable brand. To bring it to life for the consumer, you have to balance this with how this relates to them.

It is a delicate balance but extremely important. Think of the what part as showing the consumer the arms, legs, etc. of the product. It only tells them what it is but it doesn’t create a connection. To bring it to life we should show the personality and all the quirkiness of the brand – the how – to help them connect and care about the product.

Sustainable branding is very much like dating – you don’t go on a date because the other person breathes and resembles a human being. No, you go beyond that to try to make a connection with how that person relates to you and how you can build a relationship. It will be nothing more than a brief fling if you don’t have that connection.

The same for a product – you need to become a sustainable brand or else you will remain a cheap date and/or brief fling. The model described in the book is meant to be a guide on how to build this long-term relationship AND an insider’s guide on how to keep the relationship fresh.


 

Materiality matrices don’t matter to consumers but they’re proving important in helping companies focus. How can they use these to also engage their consumers?

Start balancing your materiality assessments a bit more. Too often the voices of stakeholders heard in materiality assessments are the loudest and not necessarily the most important voices. Activists, NGOs and sustainability influencers are the ones measured and engaged to inform the materiality assessment. But consumer and customer voices are almost completely absent.

Yet, they remain the most important stakeholder – they bring in the money and add to your business top line! Bringing in their voices will help you determine what areas are truly most material to your company and your most important stakeholders. It will tell you where your major threats and opportunities are as it relates to consumers.

Of course materiality assessments suffer from only focusing on the impact of the product on the supply chain. However, that is only part of the story.

As I argue in the book, you can create the most sustainable cigarette but it is still a cigarette. You have to give equal weight to the impact of the product itself. This will help you determine the weaknesses in how something is made as well as the actual impact of the product itself and help you dodge the dreaded claim of greenwashing.

But how sustainable the product itself is only tells you one side of the story.

It tells us what we should focus on when we engage the consumer but not how we should engage them. The next step will vary from brand to brand – determining how sustainability comes to life in the brand. What is the unique value proposition of sustainability in the brand? How deeply is sustainability embedded in the brand identity? How does it show itself to the consumer? Is it disruptive in engaging the consumer or more reserved?

That’s the model I develop in the book – merging the what and how to create a sustainable brand that resonates with the consumer.

Campher_tips

Getting used to failure is tough – you offer a healthy dose of how the best of brands have gone through it. Some tips for our risk-averse private sector?

Failure isn’t tough – it is part of being in business.

Companies who say they are risk averse are doomed to fail. They will still be making the same boring product that increasingly fewer people buy in the future. It was a risk to create the first iPod. It was a risk to create Tesla. It was a risk to create TOMS. It was a risk to take Dove to where it is today. Sustainability folks are risk averse because they are selling sustainability instead of selling a business opportunity.

And I don’t mean improving the bottom line. That has been done and there is no risk left there. Sustainability folks need to step out of their box and become part of business from a product and brand perspective and deliver against the consumer opportunity.

But it’s not just the sustainability people. It is also the communications and marketing people. They think throwing more money at advertising, PR, social media, etc. will create the breakthrough they need to survive. That isn’t risk. That is table stakes and nothing different from what your competitors are doing. At best you can hope for a better campaign.

We need these groups to understand how sustainability can add to the simple question people ask when they buy a product or service – why should I give a damn?

The answer is more complex than a pure sustainability story but sustainability is absolutely part of the answer. Communication and marketing people speak a different language than sustainability people and in the book I try to bridge that gap to get them to both speak “business.” And business is all about calculated risk taking.


 

“We’ve embedded sustainability into the very core of our business.” We’ve heard this classic line or a similar version of it a million times by now. It’s classic PR speak – but is there any organization out there that could truly say that and demonstrate it?

Lies, damn lies and sustainability PR.

My other favorite line is “sustainability is in our DNA.” No it is not. Making money is in your DNA.

Jokes aside, the simple answer is yes there are companies with sustainability at the core of their business. Method, Seventh Generation, Tesla, etc. were created with a specific sustainability goal in mind. They aren’t perfect but it is absolutely at the core of who they are. But a true answer is a bit more complex than that.

In the book I create a framework to show how sustainability can come to life in a brand. Sometimes it is truly at the core but in most cases it comes to life in very different ways. I identify eight ways in the framework– from ignored to designed. Method is an example of a brand that was designed with a sustainability goal in mind – absolutely at the core of their business. A brand like TOMS was inspired by a sustainability challenge while a brand like Dove aligned itself with a sustainability challenge.

In short, sustainability isn’t a simple black and white world and it constantly changes. And sustainability isn’t perfect.

The only cliché that might be right is the “journey” bit. But it is crucial that we acknowledge and show the different ways that sustainability is part of a brand, as it will direct the kind of engagement we should have with the consumer. You can’t just go out and hit the consumer (or anyone) over the head with a “sustainability is core to our business” baloney. No one will believe it. Know how it is part of you and then find a way to express it in a way that is relevant to both the consumer as well as the brand itself.

A few weeks ago, you participated in a Twitter chat we hosted on the confluence of business sustainability and economic growth. How would a “sustainable brand” approach the conundrum?

I think the “conundrum” is a bit of a red herring.

We can absolutely not consume the way we consume at the moment and we have to understand how to create sustainable economic growth. However, economic growth isn’t a problem when it comes to sustainability. The problem is that the way the economy is growing currently is unsustainable. For instance, in the U.S. you have an ever-growing gap between the rich and the poor. A more equal distribution of the wealth created by economic growth needs to happen.

It can be done – look at Germany, gap between CEO pay and average worker pay is much lower, they have a much higher minimum wage, outgrow the U.S. economy with higher taxes, more social benefits for the poor, a balance of trade in favor of them, etc. Everything that pundits say will undermine economic growth is flipped on its head in Germany – and it’s working.

It is only a “conundrum” because of a lack of political and economic will to address the unsustainable elements of the economy.

On the consumption side, the world will be fine if people consume more of the sustainable stuff. TOMS and Timberland instead of cheap knock-offs on the streets. Levi’s and GAP instead of fast fashion. Fresh fruit and vegetables locally grown instead of fast food. A Tesla or Leaf instead of a gas guzzler. Renewable energy instead of coal. Method or Seventh Generation instead of high pollutant chemicals.

There’s no problem if growth is based on more sustainable choices. How do we get consumers to do this? Well, like I say in the book… more sustainable brands that look at product and brand!

You’ve worked with numerous companies on brand development over the last two decades. What has shifted?

Firstly, social media and the connected world have redefined how brands interact with consumers. Twenty years ago, companies owned brands and sold that to the consumer. Today, they are merely custodians of the brand and consumers own it. The more agile businesses realize that the easier it will be for them to be trusted as the custodians of the brand – the more consumers will give them their loyalty.

Secondly, price Campher_LRand quality have become increasingly meaningless parts of a brand. Companies know that it is almost impossible to compete on price and have brand value. They would love to think that there is a huge quality difference between them and their major competitors but there isn’t. For instance, the difference between most cars in the same category is almost meaningless. So how do consumers make their choices? According to the value proposition offered by the brand.

Finally, the ways in which brand value proposition comes to life for the consumer has shifted. The days of the big advertising campaign is gone. Today they want you to not only be part of their lives but also do things that are unexpected and disruptive. Consumers are flooded with information and visual stimuli each day. How you break through all of that clutter is key. And that goes beyond simple shiny objects. You have to build it into your brand identity and value proposition – so it is as much strategic as tactical.


 

What remains as challenging?

The single biggest remaining challenge is how most companies remain paralyzed by fear without them even knowing it. Companies’ inability to think outside of their walls and being frozen inside those walls are their biggest failures. They are still navel gazing and seeing the world from only their perspective instead of truly understanding the world.

It comes back to the risk question you asked before – you won’t win if you don’t take risks. But so often companies will say they want to win but don’t really have the guts to do it. This is the difference between good brands and winning brands. Like an athlete – Dick Fosbury (go look it up!) changed the world of high jumping because he was willing to by-pass conventional thinking. Apple and TOMS did the same.

Yes you can point out all their faults but they kicked your backside because they weren’t afraid. Why? Because they didn’t look at what you were doing but rather looked at the problem and the consumer and created something to fill that void.

The other major challenge is how shareholders continue to drive company leaders instead of customers. This problem is too obvious to even state but they are so focused on the next quarter and shareholders that they forgot why they even exist. Imagine if they put as much attention to what their consumers truly want.

You work at the unique cusp between classic public relations and responsible brand development. Where do you see the PR sector headed in the next 20 years?

Sustainability will be like digital skills. It will be part of every single part of the PR sector. It won’t be a separate practice anymore but we are still a very long way from achieving that. Too many PR hacks think they can just make it up as they go. Create a cause here and a consumer campaign there. They will get burnt so many times until they move on and the industry really starts to up-skill all of their people.

Remember, agencies are as vulnerable as any of their clients. The hyper transparent world means that any consumer and activist can look at what agency is behind the greenwashing. No one expects perfection but they better start waking up before they are hit by their own BP-style disaster.

My biggest fear is that PR agencies don’t realize that their people are highly under skilled to handle the shifting world and impact of creating a sustainable brand. The industry will be caught out if they don’t start relooking at what they do and whether their people are geared towards the changing world.

And, of course, for them to be a sustainable PR brand, they will need to start asking what the impact of their service is. The model created in this book goes beyond products – it covers services, software, social media and everything else in between.

A main question remains – do you have a sustainable brand?

The answer for the PR sector is the same as with most other sectors – simply, no. But follow the model and you can start creating your sustainable brand. [Grab a copy of Creating a Sustainable Brand: A Guide to Growing the Sustainability Top Line – get 15% off by using Campher15 in the voucher section.]

Originally written for and published on CSRwire’s Commentary section Talkback on May 8, 2014.

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#SharedValue & Sustainability: In Conversation with Nestlé Waters North America

09 Wednesday Jul 2014

Posted by Aman Singh in CSR, CSR reporting

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Brand Management, consumer behavior, CSR, CSR reporting, Disclosure & Transparency, Environment, ethics, Leadership, nestle waters, packaging, recycling, shared value, social media, Stakeholder Engagement, stakeholder engagement, supply chain, Sustainability, sustainability, Twitter, water


 

A conversation with North America's largest seller of bottled water on how they define Shared Value, their take on what's often critiqued as an "unsustainable business model," their drive for modernizing recycling infrastructure and much more more!

[View the story “#SharedValue: A Chat with Nestle Waters North America” on Storify]

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