Going green offers growth

24 March 2011

LONDON: Companies making substantive progress in reducing carbon emissions could enhance brand equity and sales levels, a study from the UK has argued.

Industry body the Carbon Trust and research firm Vanson Bourne surveyed 1,000 adults regarding current views covering this matter.

Overall, 90% of the panel concurred that organisations should commit to a 3% cut in emissions per year, as is necessary if the UK is to reach its 2050 climate change targets.

Another 70% supported the idea that businesses be required to disclose data detailing their performance, and 56% are more concerned about an enterprise's credentials in this area than five years ago.

Exactly 66% of the sample stated respected third-party evidence assessing brand owners' responses to this issue was an essential component in believing corporate claims on climate change.

Online search engines are the primary means via which consumers track down related information at present.

However, only 7% of those polled reported that the word of companies alone was entirely sufficient and 66% questioned whether organisations were genuinely shrinking ecological footprints.

Indeed, a 53% majority asserted the claims made by private sector players constituted a "one-off improvement to win publicity" before a return to prior practices.

Elsewhere, 56% of participants were more loyal to goods and services clearly demonstrating positive credentials "at a glance", and 53% perceived working for firms excelling in the field as appealing.

Further analysis based on Millward Brown's annual BrandZ study found 80% of product sales are generated by brands, and 20% by corporate reputation.

In the latter category, 2% of demand is directly attributable to environmental standing, Millward Brown's figures revealed.

"Our own research shows that taking action on climate change represents a 2% sales increase or decrease for businesses to play for," said Peter Walshe, global director of BrandZ.

"Right now, this is an opportunity. But as awareness rises of the considerable role of business emissions in climate change, I expect an imminent backlash against companies that do not perform or cannot prove their actions are measurable and authentic."

Retail group the John Lewis Partnership is attempting to achieve a 15% cut in carbon emissions by the 2020/21 financial year, having previously been awarded the Carbon Trust Standard for a range of initiatives.

Charlie Mayfield, chairman of the John Lewis Partnership, said: "Integral to our approach to reducing our carbon emissions is the trust we have built with our customers based on our commitment to deliver what we promise and the real sense of ownership that our Partners have in our business success."

Data sourced from Carbon Trust; additional content by Warc staff