Tropical storms are no longer the phenomena we watched from afar on the Weather Channel. Hurricanes are increasing in frequency and intensity. Tornadoes have created billions in damages over the past year alone, and the destruction they cause leaves a devastating footprint. Wildfires are torching entire towns and bringing forests to the ground. Sea animals are dying and nearing extinction at alarming rates.
Increasingly, corporate environmental and sustainability practices are a significant factor in attracting talent, customers and investors.
With so much to grasp on the climate front, this issue of Marketing Coach shines a light on the importance that climate plays on brand reputations. We will explore that connection and discuss the types of corporate missions and practices that can be specifically designed to present market leadership, as well as mitigate concerns.
Climate Change and Reputation Management
Where Reputation and Operations Fuse
As companies around the world face the realization of shrinking natural resources and the increasingly frequent occurrence of climate disruptions, many have found climate change to be an important part of their brand story. From American Express to Procter & Gamble to IKEA, brands see their response to climate change as a critical component of their business proposition and key to connecting with employee talent, consumers and investors.
We have been discussing for a while now how millennials and other generational cohorts are increasingly prioritizing their environmental values while seeking to do business with and invest in companies with strong sustainability platforms. Over the past several years this trend has taken a firm hold as the variety of ways that companies label their brands as "green" has expanded and the activity in the market has accelerated.
The brand portfolio for fighting climate change tends to be a mix of sustainability practices, renewable energy investments and carbon footprint reduction. The public relations component of this shines a light on stories that illustrate these commitments and build the brand's reputation with audiences who find that these messages and experiences relate to their own values.
Many top brands are already anticipating the impact of a carbon tax and are taking advantage of the decreasing prices of renewable energy, as wind and solar have become more efficient. Many large multinational corporations are addressing regulatory uncertainty and avoiding calling attention to themselves as possible targets for fines or new restrictions by proactively and voluntarily restricting carbon emissions. Technology companies and other giantsare joining forces to use emerging technologies to reduce greenhouse gas emissions or pursuing carbon neutrality (i.e. Uber, Salesforce, Autodesk, Bloomberg, WeWork, HP, Lyft).
Some of the largest packaged food companies like PepsiCo, Coca-Cola, Kellogg and General Mills, have anticipated climate impacts on their supply chains and changed manufacturing locations in ways that reduce distribution costs for raw materials, manufacturing or transportation to retail. An increasing number of companies are looking to remove or recycle plastics and other packaging components to increase efficiencies, reduce waste and meet the expectations of their customers.
The Paris Agreement has generated much attention for corporate leaders who are partnering with key governments around the world to accelerate progress in fighting climate change. The World Economic Forum, United Nations, World Wildlife Fund and others are setting standards and facilitating collaborations with the private sector.
Stakeholders Care about Climate Practice, Policy and Message
Shareholders are asking for their corporation's point of view on climate change. The public wants to know how they intend to contribute to reducing their environmental footprint and impact. More and more investors are requiring financial managers to seek out environmentally sound investments and redirect portfolios from values-neutral investing. Likewise, consumers, especially younger audiences, are deliberately seeking and choosing brands that demonstrate a commitment to sustainability and to minimizing environmental impact. They are looking for changes in energy use, raw materials, endangered species, waste management and plastics.
Early evidence indicates that proactive climate change policy, practice and communications are generating results. According to Clean Technia, the latest State by State analysis finds that US-based corporations view climate change as an increasing risk to their bottom line and their reputation among consumers and investors.
For example, the 88% of the real estate sector that disclosed their data to the Carbon Disclosure Project (CDP) cited operational risks related to hurricanes, flooding, storm surges, and sea level rise as potential strains on their business that could lead to higher costs.
In 2017, over half of Californian companies pointed to corporate reputation and changing consumer behaviors as drivers of business opportunities, with 69% reporting either or both drivers in their responses to CDP. Alphabet, Google's parent company, recognized reputational benefits in the form of potential brand equity gains amounting to at least $133 million from addressing climate change risks.
Who's Building a Reputation on Fighting Climate Change?
Here's a list of 12 companies fighting climate change today (source: Acadia Power): Amazon, Tesla, Google, Walmart, Apple, Facebook, GM, Microsoft, Patagonia, IKEA, Kaiser Permanente, Fetzer Wines
1. Amazon - Their goal is to achieve 100% renewable energy usage as soon as possible. In September 2016, Amazon announced they will build their largest wind project to date which will provide about 90,000 homes with power through 1,000,000 MWh capacity and 100 wind turbines.
2. Tesla - Tesla's mission and innovation has always been centered on efficiency, both in function and in energy usage. Throughout the years, their goal has been to prove that electric vehicles are better than gasoline-powered cars.
3.Google - with a goal of "100% renewable energy for [their] global operations - including both [their] data centers and offices." Today, Google is the world's largest corporate buyer of renewable power.
4. Walmart - Because of the scale of their impact, they are moving toward zero waste - starting with their stores in America. More than 81% of the materials that flow through their U.S. stores are being diverted from landfills, with a 90% diversion rate leading the cause in Japan and the U.K.
5. Apple - 93% of their facilities worldwide run on renewable energy. Apple is one of the larger companies helping lead the way to a cleaner future.
6. Facebook - Facebook is a founding partner of the Open Compute Platform, an industry organization that works to improve data center designs to make them more energy efficient. Their Menlo Park campus has a waste diversion program, and their Facebook West campus, which uses healthy building materials, has etched glass to prevent birds from crashing into the buildings.
7. General Motors - GM is the number one automaker for voluntary carbon reductions, and the solar footprint of their facilities is equivalent to the size of 104 football fields.
8. Microsoft - has been 100% carbon neutral since July 2012 and continues to maintain this standard today.
9. Patagonia - Patagonia is leading the clothing industry in a completely new direction. They have a program called "Worn Wear" that helps keep the brand's clothing and gear in use longer by designing them to withstand more, offering a repair system, and eventually a recycling system for when clothing is beyond repair.
10. Ikea - Since 2005, Ikea has been working with WWF to make cotton farming more sustainable, and the results have been so significant that they inspired farmers in India and Pakistan to change their cultivation techniques.
11.Kaiser Permanente - All hospital food is locally sourced and they are reducing their water usage by 25% per square foot in its buildings. Kaiser is also expecting to be 100% carbon net positive by 2025.
12. Fetzer Wines - The first zero waste winery in 2014 and the 1st U.S. wine company to run on 100% renewable energy in 1999, Fetzer has reduced their water usage by 200,000 gallons annually and the vineyard is even recognized for creating a blue heron sanctuary on their property.
Resources on Climate Change and Corporate Reputations
Ivy Cohen Corporate Communications helps companies build reputations and differentiate in a competitive market through thought leadership, public education, issues management, content strategy, and strategic communications. To find out how ICCC can help you and your company build your reputation contact firstname.lastname@example.org, call 212-399-0026 or visit www.ivycohen.com.