There’s a common myth in sustainability circles that customers are simple — that
they see sustainability as black or white and don’t understand the complexity of
transition.
This isn’t generally true. In our research, we see that the ‘black or white’
crowd is a small but vocal minority. For example, on nuclear
energy,
only
30 percent are strongly for or against — the remainder are undecided. On banks’
lending to fossil fuel
companies,
the numbers are similar. Most people, when you ask them, understand that
transition isn’t a ‘flick the switch’ problem and that every decision is more
complex than it appears.
The problem isn’t that customers are simple, it’s that our decision-making is
simple. Most purchase decisions are what is referred to as system-1
dominant — driven by intuition,
not rational deliberation. In this intuitive world, sustainability typically has
zero impact — it simply doesn’t factor in the way customers frame decisions. In
a few scenarios, companies have forced sustainability into the frame; but in
doing so, they have had to radically simplify things to work with intuitive
decision making.
A great example of this is ‘green’ energy tariffs. The shades of grey that hide
beneath this are wide and important (e.g. generating renewable
energy versus
buying
certificates
to offset non-renewable generation); but visit your favorite price-comparison
website and this difference is all but invisible. Why? Because the simple ‘green
versus not-green’ framing works by making you feel guilty for choosing
‘not-green.’ This simple mechanism gets diluted as soon as you muddy the waters
between ‘really green’ and ‘sort of green,’ especially if ‘really green’ is much
more expensive.
So, how do you engage customers in complex transitions?
Circularity by Design: How to Influence Sustainable Consumer Behaviors
Join us Thursday, December 5, at 1pm ET for a free webinar on making circular behaviors the easy choice! Nudge & behavioral design expert Sille Krukow will explore the power of Consumer Behavior Design to drive circular decision-making and encourage behaviors including recycling and using take-back services. She will share key insights on consumer psychology, behavior design related to in-store and on-pack experiences, and how small changes in the environment can help make it easy for consumers to choose circularity.
Customers aren’t simple, but they often act simple in the moments that matter.
This makes it very difficult for companies to engage customers in transition.
Either you oversimplify and risk the ‘grey’ being exposed as evidence of
greenwashing;
or you acknowledge the complexity and accept that, for most customers, this will
have limited impact in the moment of decision.
We have recently explored two strategies that help resolve this dilemma.
Strategy 1: Carve out the ‘deep green’
One option is to sidestep the dilemma by creating a carve-out company that is
leading your sustainability efforts and is undeniably ‘green.’ Volvo’s
formation of
Polestar
— an all-electric leader that could go toe-to-toe with Tesla while feeding
technology and best practice back to Volvo — is a good example of this.
Another example is from Drax Group, one of the
UK’s largest power generators, which wanted to accelerate its carbon-removal
ambitions. Drax is in the middle of transition, having converted all of its
energy generation from coal to biomass and renewables, and wanted to move
further and become a world-leader in
BECCS
– the only current technology that simultaneously delivers 24/7 renewable energy
and carbon removals.
Drax’s ambition, however, was challenged by the reality that the company is
mid-transition and dealing with all the complexities that involves. So, it
created Elimini — a pure-play carbon-removal company,
focused on scaling BECCS to mega-ton scale — launched at Climate Week this
year. The new brand allows Drax Group to accelerate its sustainability ambitions
without being held back by the baggage of its past.
Strategy 2: Create a ‘deep green hero’
The challenge with creating a carve-out is that you’re building equity into a
new brand and potentially foregoing the strengths of your current brand. There
is a strategy to build this equity into your current brand, but it’s challenging
and requires a strong starting position.
Nucor, one of the US’s largest steel producers, has
ambitions to become known for its expertise and leadership in sustainability.
The company had a strong starting point as a leader in recycled
steel — with ~70% lower emissions than
traditional blast-furnace steel — but this leadership position went largely
unrecognized.
So, Nucor did two key things to make its leadership meaningful to customers:
First, it created a new framework to guide intuitive decision-making towards
itself — drawing a line between ‘circular’ and ‘extractive’ steel, using
terminology that was already familiar in other industries to create a clear
‘good’ and ‘bad’ in the steel industry. Then, it launched
Econiq — the world’s first net-zero steel — to
signal Nucor’s leadership and position it firmly on the right side of the new
frame.
Creating a true ‘hero’ proposition is hard, but some good examples exist across
industries. IKEA’s buyback
program,
Airbus’ blended-wing
concept,
Lego’s foray into recycled
bricks
… Each has achieved varying levels of commercial and environmental success, but
all have succeeded in showcasing the company’s commitment to doing something
difficult and meaningful on sustainability.
So, what?
With
greenhushing
becoming more prevalent, we’re at risk of entering a ‘green recession’ — where
companies stop talking up sustainability and customers stop rewarding their
efforts. The vicious cycle is obvious and drives down investment, corporate
focus and, ultimately, the pace of transition.
Corporate fears around promoting transition are valid in an era that demonizes
over-claims and disregards under-claims — but this isn’t an irresolvable
dilemma. These two strategies can help companies share how they’re accelerating
their sustainability ambitions and be rewarded for it, and are just the
beginning of what’s possible.
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Partner - Brand, Innovation and Sustainability at Lippincott
As Strategy Partner at global creative consultancy Lippincott, Alex help companies understand humans; and build brands, develop products and tell stories which matter to them.
Published Nov 6, 2024 8am EST / 5am PST / 1pm GMT / 2pm CET