Marketing & Communications

Why Shades of Grey Matter in Sustainability, and How to Get Customers to Care

Corporate fears around promoting transition are valid in an era that demonizes over-claims and disregards under-claims. Here are two strategies that can help companies share how they’re accelerating their sustainability ambitions and be rewarded for it.

Brand Provided | By Alex Paine | Published 1 month ago | About a 5 minute read

Image: Polestar

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?

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.

Alex Paine

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.

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