Ethical and environment reputations are on the slide

By Elizabeth Rigby, Consumer Industries Editor
Published: March 16 2009 02:00

There was no doubt that, in the consumer frenzy that characterised the mid noughties, "green" became the "new black" for retailers when it came to pedalling anything from T-shirts to packs of teabags.
Tapping into a growing environmental awareness among consumers, shopkeepers sought to display their own green credentials in an effort to promote their brands and appeal to a generation of more socially conscious shoppers.
At Marks and Spencer, the UK retailer, these efforts were crystallised in its Plan A ( "because there is no plan B"), which targeted 100 environmental goals for the company, from reducing its carbon footprint to doing away with free plastic bags.
Tesco, Britain's biggest retailer, meanwhile inserted environmental targets into its corporate business plan and staff bonus targets.
But with consumers' minds now squarely focused on more pressing issues of saving money on their weekly shopping bills and making ends meet as the recession begins to bite, are green issues slipping down their agendas? Can retailers afford to allow the environment to slip off their corporate radar as they struggle to survive the downturn?
Sir Stuart Rose, executive chairman of M&S and architect of its Plan A, insists that green remains on-trend despite the downturn.
"We are absolutely as committed as we were and we are not backing off [from Plan A]. For some consumers who are more financially stretched, it has slipped back a bit on their radar screens but research tells us the bulk of consumers still like it.
"It is the right thing to do and it is also giving us the opportunity to find new innovations and cost savings so it is a false economy not to do this."
But despite such reassurances, consumers are sceptical. A recent poll by Populus found that the ethical and environmental reputations of leading DIY, furniture and garden retailers have fallen across the board, with every home or gardens retailer in the poll suffering a fall in how ethically-aware customers rated their behaviour.
Equally, consumers' commitment to green is on the wane.
According to Populus's research, the number of people who would be more likely to buy a product based on value for money, regardless of the company's ethical or environmental credentials has risen from 31 per cent a year ago to 41 per cent now.
Meanwhile, the number of respondents saying they would opt for more ethical and environmental products, even if they do cost a little more, has fallen from 69 per cent a year ago to 59 per cent now.
But while the issues are replaced by fears over unemployment and the economy, those in the green lobby believe that the environmental imperative is here to stay on corporates' "to do" list.
Tessa Laws, partner at Rosenblatt solicitors, which recently carried out research on companies' commitment to the environment, says most companies are holding fast to their pledges regardless of the recession.
Rosenblatt found that one in five companies with corporate environmental policies are planning to ramp them up in early part of 2009.
"Corporates...acknowledge that it should be on their agenda. But the larger corporates have shareholders to answer to and they may be saying 'stop thinking about the environment and start paying us some money' and others will be saying 'you are doing all right and we should be thinking about our future generations'," says Ms Laws. "So it is divided, to be honest, but we found on balance people know that green policies are something that they have to follow."
While consumers might be focusing on more pressing issues in the short term, recent research carried out by Havas, the advertising group, suggests that companies that stay committed to green issues will reap their rewards in the longer term.
Guy Champniss, director of business insights at Havas Media Intelligence, says the research - taking in 25,000 consumers in nine countries - showed that sustainability remains a driver for consumers.
In his research, just over a third of consumers still ranked it as a very important issue behind unemployment and economic uncertainty.
Meanwhile, 80 per cent of respondents said corporates should be involved in solving social and environmental problems, while only 30 per cent thought it was the responsibility of government, not business, to solve these problems, which suggests that a solid corporate social responsibility record is an increasingly important part of branding - recession or not.
"There has to be an interdependence if we are going to tackle climate change," says Lucy Neville-Rolfe, corporate and legal affairs director at Tesco.
"It has to be government, business and consumers working together. Our contribution is trying to generate a green revolution in consumption and actually people will still make green choices if you help them."
Copyright The Financial Times Limited 2009