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Thomas Hinton

Standards

Riding the Wave to Green Certification

Gen Y customers expect you to be Green. How to get there.

Published: Monday, July 13, 2009 - 14:57

There’s a new wave of environmental consciousness rolling across the landscape of U.S. business. In certification circles, we refer to it as the Green Wave. But companies are discovering that going green isn’t easy, and getting green certified is even tougher. Research data from the American Consumer Council (ACC) suggests that fewer than 22 percent of companies that apply for green certification would pass the bar in terms of earning ACC’s Green C certification, a tough standard that gauges a company’s environmental compliance and corporate social responsibility.

Transforming a business from the status quo into a green company reminds me of the quality movement’s early days as companies scrambled to implement Deming’s 14 points and play catch-up with the Japanese and Germans. Books by Philip Crosby, Joseph Juran, Tom Peters, and Masaaki Imai were required reading for anyone who was serious about launching a quality initiative.

Some 25 years later, U.S. businesses are behind once again. This time, however, we’re trying to catch the Green Wave and compete with companies in Europe, Asia, and South America that have already gained a foothold with consumers who are demanding green products and services. This includes everything from energy to carpet, and clothing to automobiles.

So what’s the big deal? Why are so many U.S. companies scrambling to get their products and facilities green certified? The answer is simple: Credibility with Generation Y and competition for their business.

Credibility means everything to Gen Y, those 82 million under-30 consumers, who will likely spend more than a trillion dollars in the next five years but will refrain from buying anything that harms the environment. Furthermore, Gen Ys are consumers with a conscious. They don’t want to do business with a company that is not considered socially responsible. This is one reason why the emerging green economy has already spurred the development of a host of eco-friendly products such as electric cars, alternative energy sources, cell phones, computers, recyclable glass (not plastic) products, carpets, furniture, buildings, and even clothing. It’s what Gen Y demands.

An example of a company that is riding the Green Wave all the way to the bank is Patagonia. By developing an environmentally-conscious corporate culture and supporting environmental causes its customers care about, Patagonia struck a winning business formula that set it apart from other outerwear marketers. Today, Patagonia stands as a positive example for any business trying to decide whether or not to catch the Green Wave. Patagonia is a clothing store catering to environmentally-conscious outdoorsmen and sports enthusiasts. It donates its time and a percentage of its profits to grassroots environmental groups all over the world.

But, going green and earning a green certification from a reputable third-party organization are two entirely different strategies. The first is a marketing tactic companies are using to position themselves as eco-friendly. While this strategy might sell more widgets in the short-term, it is a precarious path to follow if the company cannot prove its products or services are, in fact, truly green. Consumers are more sophisticated, and they know the difference between an eco-friendly brand versus one that simply claims to be green. Consider the top fifteen eco-friendly brands of Generation Y. According to Outlaw Consulting, a qualitative research firm that monitors popular trends, the following companies enjoy “most favored status” with the under-30 crowd: Apple, Whole Foods, Trader Joe's, Toyota, Honda, Google, Aveda, Zipcar, American Apparel, Ikea, 7th Generation, the Body Shop, Starbucks, Netflix, and Method.

As leaders search for a comprehensive strategy that goes beyond marketing tactics and positions their company as a real player in the green economy, they will have to include such key factors as conserving energy, saving water, reducing greenhouse gas emissions, shrinking carbon footprints, reducing waste, being more socially responsible, improving employee morale, and participating in causes that a new generation of consumers support. Environmental managers and corporate social responsibility managers will play a significant role over the next ten years in helping companies set eco-policies and design eco-friendly programs. They will also be a valued member of the corporate team that melds environmental programs and green practices into the marketing message and product launches.

This brings us to getting your product or company green certified. It’s the prudent path because it offers your company a significant return-on-investment (ROI), as demonstrated by companies in Europe and Asia that have already made the investment and now are reaping the benefits. Consider companies like Honda, Toyota, Apple, the Body Shop, and Starbucks which are well-positioned to capture greater market share as middle-class America shifts its buying habits to more green products and eco-friendly companies based on the influence and pressure of their children, Generation Y. It’s no surprise that Wal-Mart saw the light a few years ago and adopted a green initiative. The world’s largest retailer understandably wants its fair share of Gen Y customers.

Of course, earning a reputable green certification is hard work. To certify a specific product requires that it pass a series of tests and meets certain environmental and industry standards. But earning a green certification for your company, facility, or agency requires a top-down commitment from leadership as well as a companywide initiative that addresses such key factors as environmental leadership, environmental awareness, environmental compliance, environmental improvements, corporate social responsibility, and financial results. Frankly, obtaining green certification is not for the faint-hearted. But earning green certification will set your company apart from competitors and endear you to a new generation of wealthy consumers.

So, what does it take for a company to get green certified? Based on my experience with the ACC, a non-profit consumer education organization (www.americanconsumercouncil.org/green), three things are required.

First, senior leadership must make a commitment to go green. This requires not only changing the way you do business, but also a philosophical shift—respecting and accepting your company’s role as a steward in protecting and preserving our environment and natural resources. Several companies, including Gap, Green Mountain Energy, Patagonia, and Whole Foods, have successfully demonstrated how to complete this transformation while generating a healthy ROI. Ultimately, you’ll race ahead of your competitors and be well-positioned to capture a new generation of consumers who want to do business with you.

Second, study and compare the criteria of several green certification programs before you make a decision to apply. I lean toward non-profit, independent third-party certification programs because they have a social benefit purpose and are not profit-driven. Make sure the certification program you select challenges your employees to raise the bar and that the criteria effectively measures how well you’ve deployed your environmental programs and policies. Also, make sure you will receive a site visit from a team of trained auditors—assuming your preliminary score merits a site visit.

Be sure the contents of your application will be held in complete confidence. A respected certification program will sign a confidentiality agreement to this effect. Finally, insist on a comprehensive feedback report from the certifying body. The feedback report should be prepared by the auditors and should address your strengths as well as opportunities for improvement based on your application content and site visit. My experience has been that a well-written feedback report often can serve both as your environmental roadmap for continuous improvement and as a viable marketing tool to help your company boost sales and position itself with new customers.

Third, be sure you can leverage your green certification with customers and the media. A well-developed green certification program will offer some type of media recognition event, a conference or forum where you can share your best practices and successes. A formal certification presentation ceremony that recognizes your employees and garners favorable media coverage.

Catching the Green Wave isn’t easy. But, my experience has been that for those companies that make the commitment and become certified, it can pay a handsome ROI in terms of recognition, product innovations, profitability, boosting employee morale, and repositioning your products and services for the next generation of customers.

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Thomas Hinton