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(originally published by Booz & Company)


Green Is a Strategy

5. Integrate sustainability into corporate and brand marketing and messaging. This is particularly important for attracting and informing stakeholders, including customers, employees, investors, and regulators. Walmart’s recently announced sustainability index, which will evaluate all consumer products for their environmental impact, represents a good example of how green initiatives can be structured and communicated in ways that bolster corporate credibility. The company will not own the index, but it will participate in and finance its creation. “The index will bring about a more transparent supply chain, drive product innovation and, ultimately, provide consumers the information they need to assess the sustainability of products,” explains Walmart CEO Mike Duke. “If we work together, we can create a new retail standard for the 21st century.”

When differentiated green companies promote their sustainability efforts, they must be prepared to have all their practices and products scrutinized by the public and by environmental advocates. If they fail to live up to expectations, companies can be accused of “greenwashing,” which can damage corporate and brand reputations. Some of the major oil companies have made themselves vulnerable to greenwashing charges by heavily advertising their commitment to renewable energy sources, when in reality their renewable initiatives receive little managerial attention and represent only a tiny fraction of their business.

To avoid such problems, companies should not proclaim a green identity unless they can withstand the scrutiny that will ensue. Even environmentally aware companies should recognize that public expectations about corporate sustainability efforts are continually rising. A message might be positively received today, but could easily be perceived next year as too little, too late.

Author ProfileS:

  • Rich Kauffeld is a Booz & Company partner based in New York. He focuses on corporate and business unit strategy, supply chain management, and transformational improvement programs for consumer products companies and retailers.
  • Abhishek Malhotra is a Booz & Company partner based in Mumbai. He focuses on business and operations strategy for consumer products companies.
  • Susan Higgins is a Booz & Company senior associate based in New York. She focuses on green strategy and supply chain strategy for consumer products and health-care companies.
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