Symposium Examines Marketer’s Role
in Sustainability and Green Initiatives

By Rob Meyer

How can green initiatives and environmentally sustainable business practices win out in the marketplace?

That question served as the springboard for a lively two-day discussion on the state of corporate social responsibility held at the McCombs School of Business Sept. 27-28. Taking part in the conversation were academics, students, corporate representatives and at least one Austin politician.

All of the participants agreed that initiatives in sustainability must be accountable for helping the bottom line. "Green has to be green and green means dollars," said Victor Welch, director of the Corporate Marketing Initiatives Group at GE.

However, Welch said that a sustainability initiative, like any other investment, must be judged over the long term. As an example, he said GE made a commitment to the wind energy market when it was a money loser. Now it is profitable business for the company. "The challenge is to stay the course," Welch said.

Also stressed by many at the symposium was the importance of taking a broad definition of sustainability that goes beyond environmental issues. In the future, sustainability in business should be a part of an overall value system that includes the human element and principles such as fair labor practices and the health and wellness of employees.

The symposium was sponsored by the Center for Customer Insight and Marketing Solutions (CCIMS) at McCombs. Some highlights are below.

• Matt Smith, BBA '03 and assistant brand manager for health, social and environmental sustainability at Frito-Lay, said companies and marketer's must continue to "push the envelope" to stay ahead of the competition. For instance, he said Frito-Lay's decision to remove trans fats from its products in 2003 was considered "proactive" back then. Today, he said, a similar move would be considered merely "compliant." Smith also acknowledged the difficulty marketers face with credibility and differentiation amid what he called the growing "tower of ecobabble" — the seemingly endless mix of confusing terminology and trendy buzz words. Corporations have to come up with a common vernacular "so we can sing off the same song sheet," he said.

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• Austin City Council Member Brewster McCracken disputed the idea that sustainable business practices are at odds with capitalism. We are living in the greatest era for economic growth, he said, and it has occurred concurrent with the birth of the environmental movement. On sustainable business trends, McCracken said, "If you aren't saving money or making money, be suspicious. It isn't sustainable and it is a fad."

• Greg Chandler, director of Wal-Mart's reputation marketing, commented on the power of Wal-Mart's customer base. "One small action times 200 million consumers makes a big difference," he said. As an example of that power, Chandler cited Wal-Mart's decision to begin selling only concentrated laundry detergent, which the company projects will save more than 400 million gallons of water and more than 95 million pounds of plastic each year.

• In introducing Mark Newton, environmental policy manager for Dell's corporate sustainability, Lamar Johnson, director of CCIMS, lauded Dell's leadership in sustainability and suggested Dell is ahead of Apple in this area, despite assumptions people might make based on reputation. "Apple is a hip brand and Dell is corporate," Johnson said. "Hip brands don't pollute, corporate brands do." Newton discussed Dell's commitment to mitigating the environmental impact of computer manufacturing. Dell takes into account the entire lifecycle of their products when considering issues of sustainability, from product concept and design to manufacturing to purchase and use to recovery and recycling. For Dell, Newton said, "transparency is key" as well as being humble about the process with your consumers.

• Michael Luchs, a Ph.D. candidate at McCombs, presented research on consumer attitudes toward ethically superior products.  Luchs and his colleagues found that many consumers explicitly believe "ethically superior means functionally inferior." In one test, subjects were shown laundry that was washed with the same detergent but were told half was done with an industrial brand and the other an eco-friendly brand. Overall, people judged the clothes they thought were washed with the industrial brand to be cleaner. What causes this? Luchs said, among other reasons, it is possible the eco-brand's mild packaging design indicates less strength, and therefore, less effectiveness.  

• Ty Henderson, assistant professor of marketing at McCombs, presented research on embedded premiums (EP). An EP is a sales promotion strategy that involves an enhancement related to a social cause added on to a product or service. He said some consumers get a "warm glow" from buying products that might, for instance, give 10 percent to a social cause. His research suggests the strategy is best used by little-known companies looking for a point of differentiation or by a company that is in tight competition with another brand. EPs are less effective, he said, when employed by a big, well-known dominant brand.

• Ian Yolles, vice president for brand communications for Nau, a new clothing company based in Portland, Ore., said the entire company was designed with a social and environmental purpose. He said businesses have a much broader responsibility to the community and the environment than a simple drive for profits.  "As a species, the stakes are extremely high," Yolles said