Sustainable Marketing Sessions PDF

WHAT IS SUSTAINABILITY? 35 What is sustainability? “Meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations 1987) 36 The UN Sustain...

WHAT IS SUSTAINABILITY? 35 What is sustainability? “Meeting the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations 1987) 36 The UN Sustainable Development Goals (SDGs) 37 Increasing marginal returns to sustainable development in terms of well-being World Happiness Report 2020 38 Data Are UN sustainable development goals on track? https://www.weforum.org/agenda/2022/09/un-sustainable- development-goals-progress-report/ UNSTATS.UN.ORG/SDGS/REPORT/2022/ 39 Data 40 Data To limit warming to 1.5 Celsius, global greenhouse gas emissions must decline by 43% by 2030. However, under current global net-zero commitments, emissions are still projected to increase by almost 14% over the next decade. Therefore, immediate and deep reductions are needed to meet obligations agreed in the Paris Agreement 41 Data 42 Data 43  Visual Data Climate Spiral – YouTube 45 Societal pressure increases… 46 … but challenges remain 47 … but challenges remain ‘How concerned, if at all, are you about climate change, sometimes referred to as “global warming”?’ (Grant 2020) 48 What is the problem with Marketing? “Marketers should be cognizant that the consumption mindset that conventional marketing encourages is a key driver of negative environmental impacts.” (Ripple et al., 2017) 49 What is the problem with Marketing? Laws will affect marketing activities, more and more Selling to more people vs. Selling more to each individual 50 What is the problem with Marketing? Increase the quantity consumed by the current consumers Increase replacement rates 51 What is the problem with Marketing? Increase the quantity consumed by the current consumers Increase replacement rates 52 Sustainable Marketing Triple Bottom Line 53 Sustainable Marketing: Definitions Sustainable Marketing is “the study of all efforts to consume, produce, distribute, promote, package, and reclaim products in a manner to achieve ecological, economic, and social objectives” (Dahlstrom & Crosno 2021) “Greener Marketing is defined (…) as integrating sustainability and social purpose – building brands and businesses that are both Not Bad and Net Good. This is no longer a niche or an afterthought. The Green Economy may be as central to business strategy in the coming decades as the Digital Economy has been in the last decades” (Grant 2020) 54  SUSTAINABLE MARKETING SESSION 2 FALL T1 2024-25 Course Instructor: Teaching Assistant: Arnaud Monnier Natalie Reyher [email protected] [email protected] 1 PLEASE HAVE YOUR NAMETAG 2  GROUP PRESENTATIONS Group Formation Does everyone have a group? Link: Sustainable Marketing Groups T1 - Google Sheets Arnaud Monnier 3  THE PSYCHOLOGY OF THE « SUSTAINABLE » CONSUMER What are the most efficient actions consumers can take to reduce their carbon footprint? What are the most common actions consumers do to reduce their carbon footprint? 4 THE PSYCHOLOGY OF THE « SUSTAINABLE » CONSUMER https://www.theguardian.com/environment/2017/jul/12/want-to-fight-climate-change-have-fewer-children Arnaud Monnier 5 THE PSYCHOLOGY OF THE « SUSTAINABLE » CONSUMER 6 THE PSYCHOLOGY OF THE « SUSTAINABLE » CONSUMER 7  SHIFT TOWARDS SUSTAINABILITY White, K., Habib, R., & Hardisty, D. J. (2019). Journal of Marketing, 83(3), 22-49. Definition: “We define sustainable consumer behavior as actions that result in decreases in adverse environmental impacts as well as decreased utilization of natural resources across the lifecycle of the product, behavior, or service.” Classic consumer decision-making maximizes immediate benefits for the self. Sustainable decision-making involves long-term benefits to other people and the natural world.  SHIFT TOWARDS SUSTAINABILITY We act sustainable,… Social influence: …because others do it (social norms), our in-group does it (social identity) and we like to make a good impression on others (social desirability) Habit formation: …if these actions have become automatic over time and are linked to repeatedly encountered contextual cues Individual self: …because we want to maintain a positive self-view, behave consistently and/or with our personal interests and needs in mind. We want to feel that we can make a difference (self- efficacy; Bandura, 1977) Feelings and cognition: …when we feel mildly (!) negative and know HOW to act sustainably Tangibility: …if the consequences of our behavior are concrete White, K., Habib, R., & Hardisty, D. J. (2019). Journal of Marketing, 83(3), 22-49.  SHIFT TOWARDS SUSTAINABILITY Social norms: what is appropriate/approved  SHIFT TOWARDS SUSTAINABILITY Social norms  SHIFT TOWARDS SUSTAINABILITY Standard message Descriptive norm message Social norms HELP SAVE THE ENVIRONMENT. JOIN YOUR FELLOW GUESTS IN HELPING TO SAVE THE ENVIRONMENT. The environment deserves our respect. You can Almost 75% of guests who are asked to participate in show your respect for nature and help save the our new resource savings program do help by using environment by reusing your towels during your their towels more than once. You can join your fellow stay guests in this program to help save the environment by reusing your towels during your stay.” Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius (2008), “A Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels,” Journal of Consumer Research, 35 (3), 472– 82.  SHIFT TOWARDS SUSTAINABILITY Social identity: group identification HELP SAVE THE ENVIRONMENT. JOIN YOUR FELLOW GUESTS IN HELPING TO SAVE THE ENVIRONMENT. 75% of the guests participated … You can join your fellow guests… JOIN YOUR FELLOW GUESTS IN HELPING TO SAVE THE ENVIRONMENT. 75% of the guests who stayed in this room (#xxx) participated … You can join your fellow guests… JOIN YOUR FELLOW CITIZENS IN HELPING TO SAVE THE ENVIRONMENT. 75% of the guests participated… You can join your fellow citizens… JOIN THE MEN AND WOMEN WHO ARE HELPING TO SAVE THE ENVIRONMENT. 76% of the women and 74% of the men participated… You can join the other men and women… Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius (2008), “A Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels,” Journal of Consumer Research, 35 (3), 472–82.  SHIFT TOWARDS SUSTAINABILITY Social identity Goldstein, Noah J., Robert B. Cialdini, and Vladas Griskevicius (2008), “A Room with a Viewpoint: Using Social Norms to Motivate Environmental Conservation in Hotels,” Journal of Consumer Research, 35 (3), 472–82.  SHIFT TOWARDS SUSTAINABILITY Social identity Green identity: “Visualize your role as a friend to the environment” Neutral identity: “Visualize your role as a friend to your peers” Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: Consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309. 15  SHIFT TOWARDS SUSTAINABILITY Social identity Green identity: “Visualize your role as a friend to the Identity-defining message: “Charlie’s: The only good choice for green environment” consumers!” Neutral identity: “Visualize your role as a friend to your Identity-referencing message: “Charlie’s: A good choice for green peers” consumers” Control message: “Charlie’s: A good choice for consumers” Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: Consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309. 16  SHIFT TOWARDS SUSTAINABILITY Social identity Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: Consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309. 17  SHIFT TOWARDS SUSTAINABILITY Social identity Sustain. Sustain. The only name in authentic For authentic sustainable style. sustainable style. Live fresh. Live green. Live fresh. Live green. Identity-defining Identity-referencing Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: Consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309. 18  SHIFT TOWARDS SUSTAINABILITY Social identity Bhattacharjee, A., Berger, J., & Menon, G. (2014). When identity marketing backfires: Consumer agency in identity expression. Journal of Consumer Research, 41(2), 294-309. 19  SHIFT TOWARDS SUSTAINABILITY Social desirability: make a positive impression Baca-Motes, Katie, Amber Brown, Ayelet Gneezy, Elizabeth A. Keenan, and Leif D. Nelson (2012), “Commitment and Behavior Change: Evidence from the Field,” Journal of Consumer Research, 39 (5), 1070–84. 20  SHIFT TOWARDS SUSTAINABILITY Social desirability Baca-Motes, Katie, Amber Brown, Ayelet Gneezy, Elizabeth A. Keenan, and Leif D. Nelson (2012), “Commitment and Behavior Change: Evidence from the Field,” Journal of Consumer Research, 39 (5), 1070–84. 21  SHIFT TOWARDS SUSTAINABILITY Social desirability Baca-Motes, Katie, Amber Brown, Ayelet Gneezy, Elizabeth A. Keenan, and Leif D. Nelson (2012), “Commitment and Behavior Change: Evidence from the Field,” Journal of Consumer Research, 39 (5), 1070–84. 22  SHIFT TOWARDS SUSTAINABILITY Habits Choice architecture: Change the default Opt-in: staff replaces the towels every day and customers had the opportunity to opt into the towel reuse program. Opt-out: staff replaces the towels every 3 days and customers had the opportunity to opt-out from the towel reuse program. Theotokis, Aristeidis and Emmanouela Manganari (2015), “The Impact of Choice Architecture on Sustainable Consumer Behavior: The Role of Guilt,” Journal of Business Ethics, 131 (2), 423–37. 23  SHIFT TOWARDS SUSTAINABILITY Habits Choice architecture: Change the default Theotokis, Aristeidis and Emmanouela Manganari (2015), “The Impact of Choice Architecture on Sustainable Consumer Behavior: The Role of Guilt,” Journal of Business Ethics, 131 (2), 423–37. 24  SHIFT TOWARDS SUSTAINABILITY Habits Choice architecture: Change the default Default option in organ donation. Opt-in (“no” checked) Opt-out (“yes” checked) Neutral (nothing checked) Johnson & Goldstein (2003) 25  SHIFT TOWARDS SUSTAINABILITY Habits Choice architecture: Change the default Legend: GOLD = opt-in countries BLUE = opt-out countries Johnson & Goldstein (2003) 26  SHIFT TOWARDS SUSTAINABILITY Individual Self Control: “This new dishwashing soap is significantly better for the environment than competing brands.” Intended: “As we initially intended, this new dishwashing soap is significantly better for the environment than competing brands.” Unintended: “As an unintended side effect, this new dishwashing soap is significantly better for the environment than competing brands.” Newman, George E., Margarita Gorlin, and Ravi Dhar (2014), “When Going Green Backfires: How Firm Intentions Shape the Evaluation of Socially Beneficial Product Enhancements,” Journal of Consumer Research, 41 (3), 823–39. 27  SHIFT TOWARDS SUSTAINABILITY Individual Self Control: “This new all-purpose cleaner is significantly better for the environment than competing brands.” Intended: “As we initially intended, this new all- purpose cleaner is significantly better for the environment than competing brands.” Unintended: “As an unintended side effect, this new all-purpose cleaner is significantly better for the environment than competing brands.” Both: “…intended to create a product that is both good for the environment and is a good household cleaner” Newman, George E., Margarita Gorlin, and Ravi Dhar (2014), “When Going Green Backfires: How Firm Intentions Shape the Evaluation of Socially Beneficial Product Enhancements,” Journal of Consumer Research, 41 (3), 823–39. 28  SHIFT TOWARDS SUSTAINABILITY Individual Self This negative effect on perceived effectiveness occurs when the benefits is integral to the composition of the product. Benefits such as fair trade or CSR reflect actions of the firm and are separate from the product. Luchs, Michael G. and Minu Kumar (2017), “Yes, but This Other One Looks Better/Works Better:” How Do Consumers Respond to Trade-Offs Between Sustainability and Other Valued Attributes?” Journal of Business Ethics, 140 (3), 567–84. 29  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Use emotions moderately and challenge self-standards subtly Make people accountable Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 30  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Self-accountability: “Please describe a recent time in which you engaged in a behavior that was inconsistent with positive environmental values. That is, think of a time that you engaged in a behavior that was not good for the environment.” Self-benefit appeal Ethical appeal Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 31  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Self-accountability: “Please describe a recent time in which you engaged in a behavior that was inconsistent with positive environmental values. That is, think of a time that you engaged in a behavior that was not good for the environment.” Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 32  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Choose product alone or in a group Self-benefit appeal Ethical appeal Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 33  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Choosing in a group increases anticipated guilt and impression management motives Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 34  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Choice of Organic vs. Regular coffee in a retail store Self-benefit appeal Ethical appeal Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 35  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Environmental sustainability is an important self- standard to live up to Choosing in a group increases anticipated guilt and impression management motives Peloza, John, Katherine White, and Jingzhi Shang (2013), “Good and Guilt-Free: The Role of Self-Accountability in Influencing Preferences for Products with Ethical Attributes,” Journal of Marketing, 77 (1), 104–19. 36  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Point-of-decision prompt in schools Meng, Matthew D. and Remi Trudel (2017), “Using Emoticons to Encourage Students to Recycle,” The Journal of Environmental Education, 48 (3), 196–204. 37  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Carbon “offset” vs. Carbon “tax” Hardisty, D. J., Johnson, E. J., & Weber, E. U. (2010). A dirty word or a dirty world? Attribute framing, political affiliation, and query theory. Psychological science, 21(1), 86-92. 38  SHIFT TOWARDS SUSTAINABILITY Feelings and Cognition Carbon “offset” vs. Carbon “tax” Sussman & Olivola (2011). Journal of Marketing Research. 39  SHIFT TOWARDS SUSTAINABILITY Tangibility Make it more concrete Li, Johnson, & Zaval (2011). Local warming. Psychological science. 40  SHIFT TOWARDS SUSTAINABILITY Summary: Best interventions… Leverage consumer psychology to encourage them subtly (e.g., social norms) Act at the point of decisions (e.g., change habits with visual cues and reminders) Make it concrete (e.g., local, close to home) and visual Combine various strategies (e.g., emotional appeal + specific guidance on how to act) 41  EXAMPLE Combine fear with high-efficacy solutions Concrete and visual At the point of decision Ourhorizon.org 42 ADDITIONAL REFERENCES  Sun, J. J., Bellezza, S., & Paharia, N. (2021). Buy less, buy luxury: Understanding and overcoming product durability neglect for sustainable consumption. Journal of Marketing, 85(3), 28-43.  Wilson, A. V., & Bellezza, S. (2022). Consumer minimalism. Journal of Consumer Research, 48(5), 796-816.  Tarabashkina, L., Devine, A., & Quester, P. G. (2022). Encouraging product reuse and upcycling via creativity priming, imagination and inspiration. European Journal of Marketing, (ahead-of-print).  Godfrey, D. M., Price, L. L., & Lusch, R. F. (2022). Repair, consumption, and sustainability: Fixing fragile objects and maintaining consumer practices. Journal of Consumer Research, 49(2), 229-251.  Sparkman, G., & Walton, G. M. (2017). Dynamic norms promote sustainable behavior, even if it is counternormative. Psychological science, 28(11), 1663-1674. Arnaud Monnier 43 BEYOND MEAT Beyond Meat: Changing Consumers’ Meat Preference (harvard.edu) 46 BEYOND MEAT 48  BEYOND MEAT What global factors drive Beyond Meat to pursue its ambitious goal of contributing to a healthier, safer, and more sustainable food supply for the world? 49  BEYOND MEAT What global factors drive Beyond Meat to pursue its ambitious goal of contributing to a healthier, safer, and more sustainable food supply for the world?  Increasing world population, increasing middle-class, risk of food and in particular meat shortage  Food safety and ethical issues related to meat and livestock (e.g., antibiotics, ultra- processed food) – Human health and animal wellbeing  Climate change/Environmental impact 50  LIVESTOCK IS RESOURCE-INTENSIVE Pelletier (2008) 51  BEYOND MEAT How is Beyond Meat reaching its target market? (think 4Ps) 52  BEYOND MEAT How is Beyond Meat reaching its target market?  Product: First developed chicken strips/ground meat aimed at joint consumption with other ingredients (there are taste and technical challenges to create other products like plant-based steaks)  Place: Placement in the meat section (rather than vegetarians/healthy section)  Place (2): Whole Foods first/ Food service and other retailers second  Price: Pricier than average meat prices, but not disconnected (cheaper than finer meat)  Promotion: Word of Mouth. Other initiatives to be decided. 53  BEYOND MEAT What benefit(s) of plant-based meat alternatives should Beyond Meat focus their communication on? 56  BEYOND MEAT What benefit(s) of plant-based meat alternatives should Beyond Meat focus their communication on?  Environmental efficiency  Animal well-being  Human health: Absence of harmful additives  Human health: Food safety (?)  Human health: Enhanced performance (?)  Taste (?)  Price (?) 57  BEYOND MEAT What can Beyond Meat do to shift consumer behaviors towards plant- based meat alternatives? What consumer segments should they target? Where to start? 58  BEYOND MEAT What can Beyond Meat do to shift consumer behaviors towards plant- based meat alternatives?  Target early-adopters  Consumers with low price sensitivity  Influencers who have deep and wide social network  People with tendency to evangelize products and brands they love  People patient with flaws of beta-versions  Difficult to go mainstream with current, small marketing budget  Avoid consumers that are resitant to or nervous about changing their diets 59  BEYOND MEAT What happened?  Trademark tagline « the future of protein » (2015)  Beyond Burger (2016)  Beyond sausage (2018)  Opened a second production facility to serve 27,000 retailers in North America and UK (2018) 60 BEYOND MEAT (2022) https://www.youtube.com/watch?v=C4Z112ID7O8 61  BEYOND MEAT: HURDLES His comments came as Beyond Meat revealed its third-quarter revenues had plummeted by 22%, on a year-on-year basis, to US$82.5m – against analysts’ estimates of $98.1m – while net losses near-doubled from $54.8m to $101.7m. The company expects its 2022 net revenues to be in the range of approximately $400m to $425m, compared to 2021’s $464.7m total. Brown told analysts: “The business continues to navigate a challenging period where broader economic conditions, particularly inflation, category- specific headwinds and increased competition have, over the past 12 months, combined to disrupt what has been over a decade of growth. 62 BEYOND MEAT: HURDLES “ultra-processed, containing over 30 ingredients, including methylcellulose, maltodextrin and dried glucose syrup.” 63 BEYOND MEAT - OPPORTUNITIES 64 INDUSTRY DEVELOPMENT Arnaud Monnier 65  BEFORE CLASS NEXT WEEK Read the IKEA case. Submit half-page write-up on Moodle before class.  What is the major issue discussed in the case?  What are the alternative options available?  What option would you recommend? Explain your decision in one or two sentences. 66  SUSTAINABLE MARKETING SESSION 3 FALL T1 2024-25 Course Instructor: Teaching Assistant: Arnaud Monnier Natalie Reyher [email protected] [email protected] 1 REVIEW: SHIFT PAPER What are two key differences between classic consumer decision- making and sustainable decision-making? Classic consumer decision-making maximizes immediate benefits for the self. Sustainable decision-making involves long-term benefits to other people and the natural world. RECENT MEGASTUDY Arnaud Monnier 4 RECENT MEGASTUDY Arnaud Monnier 5 RECENT MEGASTUDY Arnaud Monnier 6 REDUCE PSYCHOLOGICAL DISTANCE Increases Climate Beliefs “There is no doubt that humans are the main driver of climate change. Human influence has warmed the atmosphere, ocean, and land. Climate change is already affecting every region across the world. It has resulted in more frequent and intense extreme weather events, causing widespread harm and damage to people, wildlife, and ecosystems. Human systems are being pushed beyond their ability to cope and adapt.” They were then exposed to two examples of recent natural disasters caused by climate change in participants’ region Participants were then asked to select the aspects of their lives affected by climate change from a list including: food production, farming and crop production, health and wellbeing, infectious disease, heat related harm and deaths, lack of, mental health issues, flooding and storms, changed land, freshwater and ocean environments, damaged infrastructure, and economy. After making the selections, participants were provided the correct answers based on current scientific estimates (i.e., all the possible options). Last, participants were asked to write about how climate change will affect them and their community (i.e., “Please write in a few sentences: How those climate consequences will affect you, your friends and family, and your community. Try to imagine these things happening today so you can be specific and describe what it will be like.”) Arnaud Monnier 7 OUTCOME MEASUREMENT Climate Beliefs “How accurate do you think these statements are?” from 0 = not at all accurate to 100 = extremely accurate. “Taking action to fight climate change is necessary to avoid a global catastrophe” “Human activities are causing climate change” “Climate change poses a serious threat to humanity” “Climate change is a global emergency.” Arnaud Monnier 8 LETTER TO FUTURE GENERATIONS Increases Climate Policy Support “Please think of a child that is currently less than 5 years old (..) Now imagine that child is a 30-year-old adult. It is approximately the year 2055, they have started a family of their own, and they are finding their own way in the world. Whether they recognize it or not, they live in a world that is powerfully shaped by the decisions we are all making now, in 2022. One day, (..) they find a letter written today, in 2022, which is a message from you” “In it, you tell this family about all of the things you have done and want to do in the future to ensure that they will inherit a healthy, inhabitable planet. You tell them about your own personal efforts—however small or large—to confront the complex environmental problems of your time, from habitat loss to water pollution to climate change. In this letter, you also tell this family in 2055 about how you want to be remembered by them and future generations as someone who did their best to ensure a safe, flourishing world.” Arnaud Monnier 9 OUTCOME MEASUREMENT Climate Policy Support Agreement from 0 = not at all to 100 = very much so, with the following nine statements: “I support raising carbon taxes on gas/fossil fuels/coal” “I support significantly expanding infrastructure for public transportation,” “I support increasing the number of charging stations for electric vehicles,” “I support increasing the use of sustainable energy such as wind and solar energy,” “I support increasing taxes on airline companies to offset carbon emissions,” “I support protecting forest ed and land areas,” “I support investing more in green jobs and businesses,” “I support introducing laws to keep waterways and oceans clean,” “I support increasing taxes on carbon intense foods (for example meat and dairy).” Arnaud Monnier 10 NEGATIVE EMOTIONS Increases Information Sharing Participants were first asked to report their baseline levels of emotions related to climate change, (e.g., hopeful, anxious, depressed, scared, indifferent, angry, helpless, and guilty). They were then exposed to information about the consequences of climate change alongside representative images [e.g., “Climate change is happening much more quickly and will have a much greater impact than climate scientists previously thought, according to the latest report by the Intergovernmental Panel on Climate Change (IPCC, 2022). If your anxiety about climate change is dominated by fears of starving polar bears, glaciers melting, and sea levels rising, you are barely scratching the surface of what terrors are possible, even within the lifetime of a young adult today. And yet the swelling seas—and the cities they will drown—have so dominated the picture of climate change/ global warming that they have blinded us to other threats, many much closer at hand and much more catastrophic (...)”]. Last, participants were asked to report their levels of emotions related to cli mate change again Arnaud Monnier 11 OUTCOME MEASUREMENT Information Sharing Participants were first presented with the text, “Did you know that removing meat and dairy for only two of three meals per day could decrease food- related carbon emissions by 60%? It is an easy way to fight #ClimateChange #ManyLabsClimate${e://Field/cond} source: https://econ.st/3qjvOnn” (where “{e://Field/cond}” was replaced with the condition code for each group). Participants were then asked “Are you willing to share this information on your social media?,” the answer options being “Yes, I am willing to share this information,” “I am not willing to share this information,” and “I do not use social media.” Arnaud Monnier 12 BINDING MORAL FOUNDATIONS Increases Tree Planting This intervention relies on evoking ingroup-loyalty and authority moral foundations, which has been shown to increase support for proenvironmental behavior and attitudes (59, 60). Participants were asked to read the following text “We are Americans (or participants’ nationality, adapted for each country). This means we can rise to any challenge that faces our country. From scientists to experts in the military, there is near universal agreement that climate change is real. The time to act is now. Using clean energy will help to keep our air, water, and land pure. It is the American (or participants’ nationality, adapted for each country) solution to the climate crisis,” after which they were exposed to an image of a person holding the national flag of participants’ country of residence. Arnaud Monnier 13 OUTCOME MEASUREMENT Tree Planting To measure an action with a real- world impact performed at an actual cost to participants, we used a modified version of the WEPT (37). This task is a multitrial web-based procedure that detects consequential proenvironmental behavior by allowing participants the opportunity of engaging in voluntary cognitive effort (i.e., screen numerical stimuli) in exchange for donations to an environmental organization. This measure has been validated and has been found to correlate with well-established scales for the assessing proenvironmental behavioral intentions (e.g., general ecological behavior scale) (57) and with direct donation behaviors (e.g., the donation of a part of their payment to an environmental organization) (39). Participants were first exposed to a demonstration of the WEPT, in which they were instructed to identify all target numbers for which the first digit is even and the second digit is odd (4 of 18 numbers were target numbers on the demonstration page). (…) Then, they were told that planting trees is one of the best ways to combat climate change and that they would have the opportunity to plant up to eight trees if they chose to engage in additional pages of the item identification task (one tree per page of WEPT completed). These pages contained 60 numbers per page, where participants had to screen for target numbers. Alongside these instructions, participants were shown a pictogram of eight trees, one of which was colored green to mark their progress in the task. Arnaud Monnier 14 GREENWASHING  GREENWASHING “Activity designed to mislead consumers regarding the environmental practices of a firm or the environmental benefits of a product or service.” (Dahlstrom & Crosno 2021) Situations in which there is a significant gap between the expressed and genuine commitments to sustainability (Mission of the firm) “The act or practice of making a product, policy, activity, etc. appear to be more environmentally friendly or less environmentally damaging than it really is.” (Merriam Webster)  This practice can refer to either a company or its products.  Increasing. More companies attempt to boast the ecological merits of their products. GREENWASHING 2 1 (Dahlstrom & Crosno 2021) EXAMPLE: BP 18 … IT BACKFIRED 19 CLIENT EARTH 20 BP VS. CLIENT EARTH 21 LAWSUITS TO INCREASE 22 THREAT TO LARGE FIRMS 23 EXAMPLE: COCA-COLA 24 EXAMPLE: COCA-COLA (DK) Coca-Cola’s PlantBottle, which debuted in 2009, exaggerates its environmental benefits but offers no proof, found Henrik S. Øe, the Danish consumer ombudsman. “[ Øe] criticized Coke’s use of several marketing ploys, including the use of the word ‘plant,’ excessive green colors and a circular-arrow logo inspired by the familiar symbol for recyclability.” Øe, who is responsible for making sure brands and companies doing business in Denmark are complying with its national Marketing Practices Act, found that in this case, Coca-Cola doesn’t appear to be doing so. “[T]he carbon claims marketed without an existing full life-cycle assessment of the bottle were misleading,” the official report said. […] a local environmental group called Forests of the World filed a complaint against the company, saying Coca-Cola […] “blasted PlantBottle posters and ads featuring environmentally friendly imagery (leaves, green fields, farms, wind turbines, butterflies and flowers) and said that Coca-Cola simply had no proof that its product offers any positive effect in regards to reducing CO2 emissions,” reports IB Times. […] Coca-Cola also says the percentage of plant In a statement, Kristian Jørgensen, a spokeswoman for Forests of the World, material “varies by market,” with bottles containing said Coca-Cola “sinned against almost all principles when it comes to as much as 30 percent of the plant materials, at guidelines for good and fair marketing concerning environmental most. […] claims.” Source: Organic Authority 25 EXAMPLE: COCA-COLA (NZ) Greenpeace Aotearoa is calling out the “blatant greenwashing” by Coca-Cola after the world’s biggest plastic polluter announced it will replace its green bottles with clear plastic. The company revealed its plans today, saying clear bottles are easier to recycle into new bottles. The change in New Zealand will affect all pack sizes of Sprite Classic bottles in PET plastic “[…]. This is yet another attempt to greenwash the destruction they’re causing. Real action on the plastic pollution crisis, which is in turn fueling the climate crisis, is turning the tap off on plastic production and shifting to refill and reuse.” “We know that only about 9% of all plastic ever produced has been recycled. […] downcycling into carpet and clothing only delays the inevitable. Plastic doesn’t go away, and it will eventually break down into microplastics that end up in our air, food and even in our bodies and breast milk.” […] While companies like Coca-Cola continue to accelerate the plastic pollution crisis, selling around one billion single-use plastic bottles in New Zealand every year, there is a public mandate to ban single-use plastic bottles. More than 100,000 people have signed a Greenpeace petition calling for the government to ban all single-use plastic bottles now and to implement refill and reuse systems 26 EXAMPLE: NESTLE 27  EXAMPLE: NESTLE - GREENPEACE Nestlé misses the mark with statement on tackling its single-use plastics problem by Perry Wheeler April 10, 2018 “Nestlé’s statement on plastic packaging includes more of the same greenwashing baby steps to tackle a crisis it helped to create. It will not actually move the needle toward the reduction of single-use plastics in a meaningful way, and sets an incredibly low standard as the largest food and beverage company in the world. The statement is full of ambiguous or nonexistent targets, relies on ‘ambitions’ to do better, and puts the responsibility on consumers rather than the company to clean up its own plastic pollution. “A company of Nestlé’s size should be setting a strong standard to actually move toward the reduction — and eventual phasing out — of throwaway plastics. It should know by now that recycling efforts are not going to clean up our oceans, waterways, and communities. On the contrary, the company’s business as usual will only accelerate plastic pollution.” ### Nestlé was the worst polluter identified as part of an 8-day cleanup and brand audit of plastic pollution found at Freedom Island in the Philippines in 2017. The company’s products have a consistent presence in cleanups and brand audits completed around the world. 28 EXAMPLE: NESTLE 29 RYANAIR’S FALSE CLAIM Source: The Sustainable Agency 30 KLM’S MISLEADING CLAIM 31 A NOTE ON PLANTING TREES 32 A NOTE ON PLANTING TREES Studies may have overestimated the amount of carbon that trees can sequester Tree planting can harm healthy ecosystems (savanna, grasslands) Opportunity costs: planting trees scheme may divert investment from other more efficient solutions (forest protection and regeneration) It does not address the root cause of climate change: increased emissions 33 IKEA: ILLEGAL LOGGING 34 HSBC: MISLEADING CLAIM 35 SHELL: GASLIGHTING 36  HOW TO AVOID GREENWASHING Firms can reduce the likelihood of greenwashing by considering the following filters:  Central: Is the claim central to the product usage and purchasing?  HOW TO AVOID GREENWASHING Firms can reduce the likelihood of greenwashing by considering the following filters:  Central: Is the claim central to the product usage and purchasing?  Relevant: Does the claim address criteria relevant to consumption?  External Verification: Have the claims been subjected to on-going assessment by a third party?  HOW TO AVOID GREENWASHING Firms can reduce the likelihood of greenwashing by considering the following filters:  Central: Is the claim central to the product usage and purchasing?  Relevant: Does the claim address criteria relevant to consumption?  External Verification: Have the claims been subjected to on-going assessment by a third party?  Specific: To what extent are the product claims specific and meaningful? (e.g., “organic” vs. “natural”)  Truthful: Are the product claims truthful? (Dahlstrom & Crosno 2021) HOW TO DO IT RIGHT - PRACTICALLY Standardized terminology (e.g., ethical, sustainable are not standardized) Standardized measurement Standardized labeling (certification labels) (Dahlstrom & Crosno412021) CERTIFICATION LABELING Eco-labels: reflect adherence to some standard associated with food safety and environmental performance Although traditional labels focused on a single aspect of the useable life cycle of a product, increasingly these labels incorporate multiple criteria. Organic: The USDA definition uses the term organic to refer to food that is generally free of synthetic substances; contains no hormones or antibiotics; has not been irradiated or fertilized with sewage sludge; was raised without the use of most conventional pesticides; and contains no genetically modified ingredients (Dahlstrom & Crosno422021) CERTIFICATION LABELING More here: https://agriculture.ec.europa.eu/farming/geographical-indications- and-quality-schemes/geographical-indications-and-quality-schemes- explained_en 43 AVOID VAGUE LABELING Natural: This is a confusing term with an imprecise definition. Since essentially all products derive from nature, every competitor can claim to have natural products. (Dahlstrom & Crosno 2021) GOOD EXAMPLE  GOOD EXAMPLE Chipotle is a quick casual dining chain that illustrates many of the ways that a firm can nurture consumer preferences for sustainable brands and products The Chipotle core mission is to sell “food with integrity”. This strategy centers around having respect for all participants in the supply chain, including animals, farmers and the environment. Chipotle also makes sizeable financials commitments to sustainability through the Chipotle Cultivate Foundation as a way to promote a more sustainable food future. CHIPOTLE 47 CHIPOTLE 49 DISCUSSION: IS THIS GREENWASHING? 50 DISCUSSION: IS THIS GREENWASHING? Impactful execution to raise awareness Is this central to HSBC’s activity? Communicates on a real issue Putting responsibility on the consumer 98% of ATM receipts are immediately discarded Building green image instead of real initiatives Huge impact globally Could have more efficient (and less costly) actions Waste of resources (trees, water) Change default option on ATM Raise awareness on ATM, at the point of decision 51 IKEA CASE 55 IKEA CASE What comes to your mind when you think of IKEA? In just a few words? 56 IKEA CASE What is Ikea’s business model? How is it different from that of other retailers such as Walmart or Carrefour? 57 IKEA CASE What is Ikea’s business model? How is it different from that of other retailers such as Walmart or Carrefour?  They manufacture much of their product line  Maintains its own brand on most products 58 IKEA CASE Sustainability strategy focuses on 3 areas: 59 IKEA CASE Sustainability strategy focuses on 3 areas:  More sustainable life at home for consumers  Resource and energy independence for the company  Better life for people and communities touched by IKEA 60 IKEA CASE Do you think Ikea’s sustainability strategy is transformational? How would you grade it from 1 = not impressive, to 10 = transformational/gold standard? 61 IKEA CASE 1 = not impressive 10 = transformational 62 IKEA CASE 1 = not impressive 10 = transformational Products sometimes viewed as Chief Sustainability Officer is disposable, with short lifespan, part of the executive which drives demand up management, and can make sure strategic initiatives are seen through a sustainability lens Could leverage design People & Planet plan acts on capabilities more to reduce some of the most important raw environmental impact materials: cotton and timber Could be viewed as They invest in supplier capacity to greenwashing: business is still provide sustainable goods to resource-intensive and other buyers encourages consumerism 63 IKEA CASE: ABOUT TRANSFORMATIONAL CHANGE video: https://hbsp.harvard.edu/tu/e86ec4aa 65 IKEA CASE: 4 OPTIONS 1= Owning more forests 2= Driving higher procurement targets and standards 3= Using more particleboard 4= Using more recycled wood 66 IKEA CASE: 4 OPTIONS About particleboard video: https://hbsp.harvard.edu/tu/e86ec4aa (10’40) 67 IKEA 2030 68 IKEA 2022 69 IKEA 2022 70 IKEA 2023 71 NEXT CLASS Read: Steffen, W., Richardson, K., Rockstrom, J., Cornell, S. E., Fetzer, I., et al. 2015. Planetary Boundaries: Guiding Human Development on a Changing Planet. Science, 347(6223): 736–747. [see Moodle] Submit a short summary on Moodle (calibri 12, not more than 1/2 page) indicating what are the two Planetary Boundaries that are considered core, and why. Grading: 5 points can be reached max; 1 point for submitting half a page summary, 4 points for summary mentioning the two planetary boundaries that are considered core.  The aim of this assignment is that students read the paper and come to class prepared, so no need for perfection, just stick to the grading criteria. Be as concise as you can and write no more than half a page. 73  SUSTAINABLE MARKETING SESSION 4 FALL T1 2024-25 Course Instructor: Teaching Assistant: Arnaud Monnier Natalie Reyher [email protected] [email protected] 1 STEFFEN ET AL. (2015) – REACTIONS Arnaud Monnier 2 STEFFEN ET AL. (2015) Arnaud Monnier 3 STEFFEN ET AL. (2015) Two core boundaries: Climate Change (CO2 concentration/energy imbalance) and Biosphere Integrity (extinction rate)  If consistently transgressed, each can on their own push Earth System out of the Holocene State, the only state known for sure to support human societies  The other planetary boundaries operate through those two core boundaries Arnaud Monnier 4 RICHARDSON ET AL. (2023) Arnaud Monnier 5 RICHARDSON ET AL. (2023) Arnaud Monnier 6 FOOD SYSTEMS Willett et al.(2019), EAT-Lancet Poore and Nemecek (2018), Science Arnaud Monnier 7 FOOD SYSTEMS “Because much of the world’s population is inadequately nourished and many environmental systems and processes are pushed beyond safe boundaries by food production, a global transformation of the food system is urgently needed” “Scientific targets for the safe operating space of food systems were established for six key Earth system processes. Strong evidence indicates that food production is among the largest drivers of global environmental change by contributing to climate change, biodiversity loss, freshwater use, interference with the global nitrogen and phosphorus cycles, and land-system change” 8 FOOD SYSTEMS Eat-Lancet strategies for the Great Food Transformation: 5 pillars International commitment to increase consumption of plant-based foods and decrease consumption of animal-sourced foods Public Health information Sustainability Education Biodiversity-enhancing food production systems rather than increasing quantity of a few crops Sustainable intensification of agriculture (e.g., increase efficiency of fertilizer and water use, innovations, etc.) Governance of land and oceans Half Earth strategy: zero expansion policy for agriculture Monitoring fish stocks and impact on oceans Halve food loss and waste (innovations throughout the supply chain) Willett et al.(2019), EAT-Lancet 9 CHALLENGES IN THE FOOD SYSTEM Nutrition/Obesity Food waste Sustainable Food future Arnaud Monnier 10 OBESITY Body mass index (BMI) is a simple index of weight-for-height that is commonly used to classify overweight and obesity in adults. It is defined as a person's weight in kilograms divided by the square of his height in meters (kg/m2). Obesity: BMI > 30 Overweight: BMI > 25 Arnaud Monnier OBESITY ▪ 39 % of humans are overweight or obese (WHO) ▪ 39% of men ▪ 40% of women ▪ 13 % of humans obese (WHO) ▪ 11% of men ▪ 15% of women ▪ 70 % of US adults are overweight or obese (National Health and Nutrition Examination Survey 2014) Arnaud Monnier 12 Arnaud Monnier 13 OBESITY IN US AND EUROPE Arnaud Monnier 14 Arnaud Monnier 16 Arnaud Monnier 17 Arnaud Monnier 18 Arnaud Monnier 19 OBESITY Lancet (2016) Arnaud Monnier 21 OBESITY IS COSTLY FOR SOCIETY AND INDIVIDUALS Arnaud Monnier 22 OBESITY IS COSTLY FOR SOCIETY AND INDIVIDUALS The cost of obesity (USA alone, $ billion) $160 bn $140 bn $150 bn Source: McKinsey Arnaud Monnier 23 WHAT CAUSES OBESITY The “energy-imbalance” theory of obesity ▪ An increased intake of energy-dense foods that are high in fat and sugars ▪ An increase in physical inactivity due to the increasingly sedentary nature of many forms of work, changing modes of transportation, and increasing urbanization World Health Organization (WHO) Arnaud Monnier 24 WHAT CAUSES OBESITY Energy-imbalance theory Recommended (male) Recommended (female) Arnaud Monnier 25 LONGEVITY Flanagan et al. (2020): “Calorie restriction (CR), the reduction of dietary intake below energy requirements while maintaining optimal nutrition, is the only known nutritional intervention with the potential to attenuate aging.” Arnaud Monnier 26 IS IT CALORIE RESTRICTION ALONE THAT IMPROVES HEALTH? The efficacy of calorie posting on limiting calorie intake, is modest at best (e.g., Bollinger et al. 2011; Cadario and Chandon 2020) Arnaud Monnier 27 IS IT CALORIE RESTRICTION ALONE THAT IMPROVES HEALTH? Arnaud Monnier 28  IS IT CALORIE RESTRICTION ALONE THAT IMPROVES HEALTH? Is it due to mild, sustained calorie restriction or nutritional richness of the diet? (Willcox and Willcox 2014) Importance of social network Arnaud Monnier 29 IS IT CALORIE RESTRICTION ALONE THAT IMPROVES HEALTH? Mozaffarian (2016): “Whereas short-term weight loss can be achieved by any type of calorie- reduced diet, in the long term, counting calories may not be biologically nor behaviorally relevant. Rather, the quality and types of foods consumed influence diverse pathways related to weight homeostasis.” Arnaud Monnier 30  HEALTHY DIETS Mediterranean diets are rich in nutrient-dense foods (e.g., whole grains, fruits, vegetables, seafood, beans, and nuts) and have been shown to improve health outcomes such as weight maintenance, mortality, and risk of cardiovascular disease, above and beyond any effect of calorie restriction (e.g., Estruch et al. 2018; Shai et al. 2008). Neither the Mediterranean diet nor the Okinawan diet emphasizes calorie restriction Arnaud Monnier 31  HEALTHY DIETS Mediterranean diet Arnaud Monnier 33  HEALTHY DIETS Eat-lancet Healthy diets have an appropriate caloric intake and consist of a diversity of plant- based foods, low amounts of animal source foods, unsaturated rather than saturated fats, and small amounts of refined grains, highly processed foods, and added sugars. Transformation to healthy diets by 2050 will require substantial dietary shifts, including a greater than 50% reduction in global consumption of unhealthy foods, such as red meat and sugar, and a greater than 100% increase in consumption of healthy foods, such as nuts, fruits, vegetables, and legumes. Arnaud Monnier 34 THE EAT-LANCET DIET Arnaud Monnier 35 FOOD WASTE Arnaud Monnier 36 FOOD WASTE Arnaud Monnier 37 FOOD WASTE Arnaud Monnier 38 FOOD WASTE Arnaud Monnier 39 FOOD WASTE Arnaud Monnier 41 Arnaud Monnier 42 Arnaud Monnier 45 PSYCHOLOGY OF WASTE Arnaud Monnier WASTEFUL USE VS. WASTEFUL DISPOSAL Arnaud Monnier WASTEFUL USE VS. WASTEFUL DISPOSAL Xu and Arnaud Bolton Monnier (2023) WASTEFUL USE VS. WASTEFUL DISPOSAL Muse = 3.40% Mdisposal = 6.20% Xu and Arnaud Bolton Monnier (2023) CONSUMERS ARE MORE SENSITIVE TO WASTEFUL DISPOSAL Wasteful use versus disposal: Less accessible (Menon et al. 1995) Less tangible and direct (Cushman et al. 2006; Royzman and Baron 2002) More future-oriented (Carmi and Bartal 2014; Strathman et al. 1994) Together, the environmental impact from wasteful use is more difficult to evaluate/appreciate than equivalent wasteful disposal (Hsee and Zhang 2010) Consumers will perceive wasteful use of resources as less environmentally harmful than equivalent wasteful disposal. Consumers will react less strongly to wasteful resource use versus disposal in production. Same pattern will also apply to waste mitigation contexts. Xu and Arnaud Bolton Monnier (2023) SOLUTIONS World Economic Forum https://twitter.com/wef/status/968128869889953794 Arnaud Monnier 52 CREATING A SUSTAINABLE FOOD FUTURE Willett et al.(2019), EAT-Lancet Arnaud Monnier 53 Arnaud Monnier 54 CREATING A SUSTAINABLE FOOD FUTURE World Resources Institute Arnaud Monnier 55 OVER TIME Arnaud Monnier 56 Arnaud Monnier 57 Arnaud Monnier 58 TYPE OF FOOD MATTERS MORE THAN PROVENANCE Arnaud Monnier 60 Arnaud Monnier 61 SUSTAINABLE FOOD FUTURE 3 levers (World Resources Institute) Reduce overconsumption of calories Reduce overconsumption of protein by reducing consumption of animal-based foods Reduce consumption of beef specifically Arnaud Monnier 62 TONY’S CASE Arnaud Monnier 63 TONY’S CASE Arnaud Monnier 64 TONY’S CASE How would you rate Tony’s effort to change the supply chain in the whole industry? What metrics do you use (pros/cons)? Arnaud Monnier 65 TONY’S CASE How would you rate Tony’s effort to change the supply chain in the whole industry? What metrics do you use (pros/cons)?  Cool brand, but small volumes relative to big players  Metrics: % of global chocolate production that is slave-free Number of companies that adopt similar policies Consumer awareness of the issue Farmers’ income Arnaud Monnier 66 TONY: OPEN CHAIN Arnaud Monnier 67  TONY: OPEN CHAIN Tony’s mission is built on three pillars. Tony’s creates awareness Tony's leads by example Tony's inspires to act Arnaud Monnier 68 GROUP WORK Cadbury, Nestlé, Mars, Barry Callebaut, Hershey: anything on child labor? Analyze their CSR based on the ABCD framework:  Authenticity (what CSR cause does the brand/firm choose?)  Business purpose (how does it help the firm’s business?)  Consistency (are the actions consistent with the stated goal of the company?)  Distinctiveness (are the firms’ actions differentiated from the competitors’?) Arnaud Monnier 69 TONY’S CASE Mixed motives firms (that have both financial and sustainable objectives) are difficult to manage effectively. Why? What recommendations do you offer? How to move forward? Arnaud Monnier 72 TONY’S CASE Mixed motives firms (that have both financial and sustainable objectives) are difficult to manage effectively. Why? What recommendations do you offer? How to move forward? Moving forward: More communications (they need more resources) Raise awareness Grow the business Partner with bigger firms (but guard identity) Arnaud Monnier 73 TONY’S PARTNERS: BEN & JERRY’S, ALDI Arnaud Monnier 74 NEXT CLASS Renoon case: Reinventing shopping for sustainable fashion Please read the case before class (mandatory) and submit half-page writeup on Moodle – Please summarize what the major problems are and indicate which option you would recommend for Renoon Unilever case – in-class activity (no prep required) Tutoring: time for questions regarding teamwork presentations Arnaud Monnier 76  SUSTAINABLE MARKETING SESSION 5 Fall T1 2024-25 Course Instructor: Teaching Assistant: Arnaud Monnier Natalie Reyher [email protected] [email protected] 1 SURVEY RESPONSES Arnaud Monnier 2  SURVEY RESPONSES Environmental issues according to importance [students' opinions] 100% 93% 90% 80% 70% 66% 60% 52% 50% 45% 45% 38% 40% 34% 30% 20% 17% 10% 3% 0% Climate change Air pollution Shortage of Growing amount Decline or Marine Pollution Pollution of rivers, Agricultural Frequent droughts drinking water of waste extinction of lakes and ground pollution (use of or floods species and water pesticides, habitats, and of fertilisers, etc) and natural soil degradation ecosystems (forests, fertile soils) Arnaud Monnier 3 SURVEY RESPONSES – COMPARE WITH EU Environmental issues according to importance Climate change 93% 53% Air pollution 66% 46% Shortage of drinking water 52% 24% Decline or extinction of species and habitats, and of 45% natural ecosystems (forests, fertile soils) 37% Growing amount of waste 45% 30% Marine Pollution 38% 40% Pollution of rivers, lakes and ground water 34% 38% Agricultural pollution (use of pesticides, fertilisers, etc) 17% and soil degradation 30% Frequent droughts or floods 3% 28% You % EU % Arnaud Monnier 4 SURVEY RESPONSES: Q2 Arnaud Monnier 5  SURVEY RESPONSES The most effective ways to tackle environmental problems [students' opinions] 45% 41% 40% 38% 38% 34% 35% 31% 31% 30% 28% 28% 24% 25% 20% 15% 10% 10% 7% 5% 3% 0% Arnaud Monnier 6  SURVEY RESPONSES – COMPARE WITH EU Ways to tackle environmental problems Changing the way we consume 33% 41% Introducing stricter environmental legislation 23% 38% Investing in research and development to find technological solutions 26% 38% Encouraging businesses to engage in sustainable activities 23% 34% Providing more information and education, e.g. on waste separation, 24% energy consumption 31% Changing the way we produce and trade 31% 31% Introducing or increasing taxation, or removing subsidies, or 16% environmentally harmful activities 28% Making the food system more sustainable from production to 22% consumption 28% Introducing or increasing financial incentives to business and people 20% taking measures to protect the environment (e.g. tax breaks, subsidies) 24% Introducing heavier fines for breaches of environmental legislation 23% 10% Ensuring better enforcement of legislation 19% 7% Making the banking and insurance systems more environmentally- 5% friendly 3% EUR28 % You % Arnaud Monnier 7 RENOON For you what are the most important elements of sustainability in the clothing industry? Arnaud Monnier 8 RENOON For you what are the most important elements of sustainability in the clothing industry? Are you able to find information relevant to your purchase decisions on those elements? What is lacking in the marketplace? Arnaud Monnier 9  Water pollution Textile production is estimated to be responsible for about 20% of global clean water pollution from dyeing and finishing products. The Role of Greenhouse gas emissions the Fashion The fashion industry is estimated to be responsible for Industry 10% of global carbon emissions – more than international flights and maritime shipping combined. The Role of the Fashion Industry  Reasons for hope? 64% of Gen Zs and 63% of More than 30% saying that millennials reporting that they conduct research on they are willing to pay more companies’ environmental to purchase environmentally impact and policies before sustainable products and purchasing products and services services. Source: Deloitte report. https://www.esgtoday.com/more-than-40-of-gen-z-millennials-would-change-jobs-over-climate-concerns-deloitte-survey-finds/ The Business Opportunity  But McKinsey & Co. explains in an article that as “Their trend-chasing habits are supported by McKinsey Co trend-chasing habits “the first real digital natives, Gen Zers— fast-fashion retailers supplying accessible speaking generally—are extremely online. Gen ways to switch it up,” the McKinsey article Zers are known for working, shopping, dating states. “One Gen Z staple shop, Chinese fast- and making friends online.” This always-online fashion giant Shein, adds 6,000 new products lifestyle means this generation is on top of to its website per day. This may seem at odds trends, especially when it comes to clothes. with the generation’s values of sustainability, McKinsey research shows their styles are ever but the speed at which Gen Z trends change changing and looks that are in vogue one and their desire for unique style can month might be out the next. sometimes overcome their eco-scruples.”  But 45% of Gen Z/Millennial consumers say they buy more apparel online now than in the past several years “Gen Z talks sustainability but shops fast-fashion,” “Right now, 54% of Gen Z and Millennial convenience is winning.” consumers say sustainability is nice, but not as important as price, fit, comfort, etc. (2023 Global Monitor ). Source: https://sourcingjournal.com/topics/lifestyle-monitor/surprising-gen-z-shopping-trends-lifestyle-monitor-cotton-incorporated-pmg-mckinsey-ypulse-527668/  Why this discrepancy between ‘say’ and ‘do’? DISCREPANCY BETWEEN SAY AND DO Social desirability in responses to surveys Budget constrains (e.g., economic crises) Lack of transparency and availability of information Definition of what sustainable purchases are varies between individuals Arnaud Monnier 17 RENOON’S DECISION Consumer aspects: What makes Renoon attractive to consumers? Arnaud Monnier 18 RENOON’S DECISION Consumer aspects: What makes Renoon attractive to consumers? 1. Creatives: “Style first.” Self-expressive needs. Conscious choices of small rising brands. 2. Idealists: “Sustainability first.” Need for concrete actions outside of activism. 3. Practicals: “Practicality first.” Need for easily accessible and actionable information. Key values: Trust, Sense of Belonging, Positive Impact Arnaud Monnier 19 RENOON’S DECISION Business aspects: What makes Renoon attractive to companies/partners? Arnaud Monnier 20 RENOON’S DECISION Business aspects: What makes Renoon attractive to companies/partners? 1. Third party certification 2. Tools to support marketing claims with proof points 3. Increase transparency 73% of companies applying to Renoon are willing to pay an upfront subscription for 2 years. Key value: Trust Arnaud Monnier 21 RENOON Options 1. Becoming a media company 2. Opening an e-commerce portal 3. Something else? Arnaud Monnier 22 RENOON’S DECISION What decision criteria to use? Arnaud Monnier 23 RENOON’S DECISION What decision criteria to use? 1. Monetization 2. Ethical mission 3. Leveraging current expertise 4. Positioning versus competition 5. Cost structure Arnaud Monnier 24 RENOON: COMPARING OPTIONS Decision Criteria Becoming a media company Opening an e-commerce portal Monetization Ethical Mission Leveraging current expertise Positioning Cost structure Arnaud Monnier 25 RENOON: COMPARING OPTIONS Decision Criteria Becoming a media company Opening an e-commerce portal Monetization + Monetize visibility (impressions) + Internalize knowledge and expertise in consumer purchase behavior + No lag in payments Ethical Mission + Focus on ethical mission - Limited impact on industry practices - What would consumers think of brand - Threat to mission-driven purpose placement? Leveraging current + Strong community engagement (45% + Can keep app as is with added expertise of users use the app daily) functionality - Underusing technical expertise on - Retailing is not a core competency sustainability practices - Underusing technical expertise Positioning + Good level of differentiation - Crowded Market Cost structure - Content creation - Customer Acquisition is costly - Customer Acquisition is costly - Need another round of funding - Need another round of funding Arnaud Monnier 26 RENOON: COMPARING OPTIONS Is a third path possible? Who else is interested in Renoon’s practices? Arnaud Monnier 27 RENOON TODAY Felt they had to choose between B to C and B to B B to C implications: - Almost start from scratch - Have another round of funding - Customer acquisition is expensive - Business model uncertain Arnaud Monnier 30 RENOON Felt they had to choose between B to C and B to B B to C implications: B to B implications: - Almost start from scratch - Brands lack tools to trace supply chain, gather data and communicate with - Have another round of funding truthful claims - Customer acquisition is expensive - Brands need help to comply and - Business model uncertain leverage new legislations Arnaud Monnier 31 16 SUSTAINABILITY EU LEGISLATIONS Will impact textile and clothing companies by enforcing transparency and actions Arnaud Monnier 32 16 SUSTAINABILITY EU LEGISLATIONS Will impact textile and clothing companies by enforcing transparency and actions Arnaud Monnier 33 RENOON B to B solution Primary data gathering Build transparency & manage greenwashing risks Proof points for Marketing Claims Automated Product Sheet / Digital Product Passport Product Life Cycle Assessment Identify areas for improvement Communication Create e-commerce widget for communication powered by Renoon Offline QR code Arnaud Monnier 34 RENOON B to B solution Widgets & QR code for transparency Arnaud Monnier 35 RENOON B to B solution Widgets Example taken from Artknit Arnaud Monnier 36 RENOON B to B solution Widgets Arnaud Monnier 38 RENOON B to B solution Digital Passport Arnaud Monnier 39 RENOON Already 3 Million products with embedded QR code 5 M people reached > 50 active countries Profitable in 2024 Arnaud Monnier 41 RENOON’S BUSINESS MODEL CANVAS (2022) Arnaud Monnier 42 RENOON’S BUSINESS MODEL CANVAS (2024) Arnaud Monnier 43 UNILEVER Polman’s hierarchy of responsibility:  1- To Consumers  2- Environment and society  3- Employees  4- Shareholders Unilever's New Global Strategy: Competing through Sustainability, Video | Harvard Business Publishing Education Arnaud Monnier 44 UNILEVER Polman on the role of trust “It can be destroyed in nanoseconds […] The only thing we have, really, is our reputation […] Our market cap is 120 billion euros, our asset values are 20-25 billion euros. The difference is reputation.” Unilever's New Global Strategy: Competing through Sustainability, Video | Harvard Business Publishing Education Arnaud Monnier 45 UNILEVER 2020 https://www.unilever.com/files/92ui5egz/production/16cb778e4d31b81509dc5937001559f1f5c863ab.pdf Arnaud Monnier 46  UNILEVER NOW https://www.greenbiz.com/article/unilever-ceo-signals-radical-shift-sustainability-agenda https://www.greenbiz.com/article/why-unilevers-downshift-sustainability-good-news Arnaud Monnier 47 CASE FEEDBACK PLEASE ANSWER THIS TWO-MINUTE SURVEY ON CASES https://johnson.qualtrics.com/jfe/form/SV_8qwVnlhiEmfnK50 Arnaud Monnier 48 NEXT CLASS Group presentations Arnaud Monnier 49