Green Marketing in B to B: Hitting it Out of the Park Ellen Lutz ISBM Sustainability Jam Session Aurora, Ohio February 17, 2016

Background: Clean Markets Established in 2008 Certified woman-owned marketing and sales firm Certified B Corporation Support B to B clean energy incentive programs sponsored by seven utilities Award-winning sales software MISSION: To support the energy industry’s transition to environmentally sustainable energy products.

Marketing Evolution Focus on organizational and production goals Emphasis moved beyond selling towards meeting customers’ needs and wants Integration of societal goals, based upon relationships beyond paying customers 1950’s 1960’s & 1970’s 1980’s thru 2000’s

Foundations of Sustainability Socially Ethical Does not promote social injustice Economic Satisfies market demand and can make money Environmental Life-cycle based products intended to endure Ecologically oriented: Products that do not negatively impact the health of the planet Relationship-based Management of relationships between businesses and their customers and key stakeholders

B to B Sustainability Drivers Global competition Brand reputation Financial performance Operational efficiency Cost reduction Stakeholder pressure Government regulations

Challenges Values/Action Gap Self-interest versus societal Credibility must be established Synergy between marketing and company’s operational practices Supply chain partner practices Many target audiences beyond buyers

When to Communicate Understand how you are perceived. Establish corporate sustainability goals/commitment. Communicate goals with authenticity – be comfortable with being a work in progress. Make operational improvements –reduce energy, water, waste, carbon footprint, chemical discharges. Communicate improvement results, sustainable products, etc.

Branding Decisions New brand or integrate? Acquire existing brand? Branding company practices or products? Sustainable Brands -

Positioning Sustainable Firms Position to the most important buying criteria with socio-ecological attributes secondary Articulate philosophy and establish credibility before green marketing Sweet spot: Marketing sustainable operations and green products Green Marketing Firms Missed Opportunity Firms Doing Both Firms Doing Both Greenwashers

Target Audiences COMPANY Customers/ Consumers Pressure Groups MediaGovernmentEmployeesShareholdersSuppliersCompetitors

Messaging Make the issue personally relevant Avoid guilt-based messages Focus on benefits of “getting something” Associate with positive self image and the here and now, not global or future-oriented Be interactive, playful, entertaining & informative

Labeling Third party endorsement - credibility Certify through existing label? Create new label? Ecolabel Index –  463 ecolabels in 199 countries, 25 sectors

Greenwashing 2010 TerraChoice Study: : The number of “green” products offered grew by 73% Out of 5000 products, 12,061 environmental claims were made Only 4.5% avoided all forms of false or misleading claims 95% of “green” products are being greenwashed.

Seven Sins of Greenwashing 1.Hidden trade-offs 2.No proof 3.Vagueness 4.Irrelevance 5.Fibbing 6.Lesser of two evils 7.False Labels

Lesser of Two Evils Hidden Trade-offs Fibbing Travelling on Easy Jet creates less carbon emissions per person than travelling in a Toyota Prius

Peabody’s Stock Price

Invented CFLs in 1980 – market leader since 1990’s: North America penetration of 0.1/household 1998: Conducted market research to determine buyer preferences and criteria #1- “Long life” #4 - Environment Reintroduced CFL –“Super long life” with guaranteed energy savings –Traditional shape with Energy Star label 2001: Sales increased 12% in a flat market

Employee Communication UK Management Consultant Training for employees to give them confidence to integrate sustainability with client solutions 40 minute e-learning module Training not mandatory 15,000/17,000 employees completed training in 3 months 74% felt confident enough after completion to discuss sustainability solutions to clients

Summary Sustainability initiatives can energize workforce, engage customers and grow bottom line Must be approached methodically and communicated with authenticity Involve stakeholders Market after you have articulated the firms’ sustainability philosophy and made operational improvements Labels provide valuable third party endorsements Avoid seven greenwashing traps

THANK YOU! Ellen Lutz

QUESTIONS??