Jumping on the green train
Stumped? Don%26#39;t worry, you%26#39;re not alone.
A recent survey of New Zealand consumers found 82 per cent couldn%26#39;t name a single brand or product known for its environmental, social or ethical record.
For a country that bills itself as one of the cleanest and greenest in the world, that could be construed as a bad sign.
But Peter Neilson, chief executive of the New Zealand Business Council for Sustainable Development doesn%26#39;t see it that way.Instead, he views Kiwis%26#39; ignorance about green products as an opportunity %26ndash; an opportunity for businesses who are committed to upholding higher environmental standards to get a foothold in a fast- growing market.
That%26#39;s because the same survey found that 11 per cent of Kiwi consumers spent according to environmental, social or ethical values.
Mr Neilson says an 11 per cent market share is nothing to sneeze at for an enterprising company %26ndash; with or without a social conscience. %26quot;It%26#39;s significant enough to pay attention to it.%26quot; He says it is a largely untapped market in New Zealand. But businesses who want to capitalise on this keenly green base of buyers need to prove their worth. In other words, people want to know what they are paying for and they want to be sure it is a genuinely green article.
%26quot;Consumers want information. If you can differentiate and people genuinely believe you actually perform better it looks at though the potential is quite large.%26quot;
Mr Neilson says the council%26#39;s latest survey, made public on April 1, reinforced earlier work which found that %26ndash; prices being more or less equal %26ndash; 32 per cent of consumers are prepared to buy the more environmentally friendly or ethical choice.
%26quot;If they can find a credible alternative for about the same price, they are prepared to move %26ndash; that is the potential message for business. The taste is there but it isn%26#39;t being satisfied,%26quot; he says.
Internationally, marketing and sales folk cottoned on to the same discovery a long time ago. They even came up with a label for the socially conscious consumer movement: %26quot;lohas%26quot;, for lifestyles of health and sustainability.
Mr Neilson says businesses moving most quickly to capture the lohas segment of the marketplace are those selling products with the most direct effect on consumers. Food and personal products figure most prominently.
New Zealand tissue giant SCA Australasia is one of them. The company launched a campaign last week to bolster and broadcast its green reputation. Owned by Swedish parent company SCA, the tissue manufacturer (whose brands include Purex, Sorbent, Treasures Nappies, Tork and Handee) bills itself as the second greenest in the world. At least it was ranked as such by a group called the Ethical Investment Research Service which rated 3000 global companies on their environmental, social and ethical records.
The top green firm is wind turbine maker Vestas.
In New Zealand, SCA is the only local manufacturer of tissue paper with production based in the Bay of Plenty. The tissue is made in New Zealand, by New Zealanders, with off-cuts or unusable timber mostly grown here.
National sales manager Mark Stevens says despite the company%26#39;s good standing in the eyes of the ethical investment community internationally, New Zealanders are mostly in the dark about SCA%26#39;s green footprint. He says the company wants to broadcast its commitment to lightening its environmental footprint as well as educate New Zealanders about green practices in business.
Mr Stevens says confusion is rampant among consumers looking for greener choices. To prove his point, he refers to a North Island city council that told SCA they were dumping it for a competitor which claimed to offered a greener product. SCA, determined not to lose a long-time customer, went snooping. The way it saw it, the competitor%26#39;s claims to offer a superior recycled product were as thin as the tissue it was flogging.
%26quot;Only 25 per cent of the product was made of recycled materials and the pulp was sourced from hardwoods which were in all likelihood illegally harvested,%26quot; he said. %26quot;So we went back to the council and said %26#39;Are you making a green decision or not?%26#39; They had no idea.%26quot;
Mr Stevens says the case was a wake-up for the council and SCA in terms of product credibility. To prove to customers the company pays more than lipservice to environmental considerations, SCA came up with 10 criteria on which it bases its green claims. It includes disclosures on where the product is sourced (whether the timber has been legally harvested), what chemicals go into the product, how much waste is created in production, and the certification process.
Among its targets, the company has committed to reduce the amount of landfill waste it creates by 75 per cent by 2012. It claims to have reduced waste placed into landfills by 50 per cent since 2004. %26quot;Our industry has a large environmental footprint, let%26#39;s face it,%26quot; Mr Stevens says. %26quot;There%26#39;s no way around that. There are two options: you can either get rid of our industry and not use toilet paper or you can use toilet paper and make it in the most responsible and sustainable method possible. Those are the choices everyone has to make.%26quot;
Mr Stevens says SCA%26#39;s suppliers are held to the same standards as its own, a practice he suggests has contributed to its favourable reputation with ethical investors.
%26quot;It%26#39;s about measuring what you%26#39;re doing and constantly improving, and I think in everything we%26#39;re doing, we%26#39;re trying just to get a little bit better. People do see it as a commercial advantage but ultimately it%26#39;s driven by what the customer wants.%26quot;
Mr Neilson reckons businesses that can prove the authenticity of their green claims (domestically or abroad) will become market leaders. %26quot;If you end up doing too much greenwash, it%26#39;ll boomerang very quickly. The thing to do is to make sure you can back your claims.%26quot;
To that end, the Council for Sustainable Development supports and encourages businesses to verify the greenness of their produce through certification.
Mr Stevens says SCA advocates the same, and cites independent accreditation as one of its 10 considerations for the mark of a sustainable company.
So how does one determine the trustworthiness of one green claim from the next?
In New Zealand, the government-approved stamp of approval comes under the Environmental Choice symbol. It%26#39;s considered in line with Germany%26#39;s well established Blue Angel Mark, the Green Seal in the United States and Good Environmental Choice Australia.
But getting the green tick of government approval can come at a cost to business, particularly for small enterprises.
Mr Neilson says the Business Council is encouraging government to come up with a labelling and certification system more affordable for small and medium enterprises given they make up more than 90 per cent of New Zealand%26#39;s economy.
Mr Stevens admits the scope of SCA%26#39;s environmental overhead has been high and arguably easier to swallow for a multinational than a start-up. Still, he doesn%26#39;t think it should be a deterrent for going green and hopes other Kiwi firms will be inspired by SCA%26#39;s example.
%26quot;We%26#39;re not a couple of hippies up the back of Nelson hand- blocking toilet paper, we%26#39;re a major global corporation and we%26#39;re showing we can behave ethically and responsibly. It%26#39;s a good example for a whole bunch of industries that behave this way.%26quot;
Mr Neilson is not surprised by a corporate giant showing its softer green side. Greens in business are finally %26quot;coming out of the closet%26quot;, he says.
%26quot;Most New Zealanders are %26#39;small g%26#39; green but now it%26#39;s become okay to talk about. In the last two years we%26#39;ve seen more action than we have seen in the previous 10. It%26#39;s really accelerating.%26quot;
