Growing demand for environmental responsibility has made sustainability an integral component of doing business. This is especially true at one of the major sources, energy production. This has prompted many companies to implement sustainability in their building blocks and to communicate with consumers through green marketing strategies.
In order to implement a green marketing strategy, brands must pay careful consideration to many attributes. Here we will cover a few which tend to be neglected when determining if a green marketing strategy makes sense for your brand.
Know the differences: Sustainable vs Renewable vs Green vs Clean
There are different terms used for energy depending on their origination sources. There can, however, often be a thin line between the technical meanings. Before you write up a marketing strategy based around any of them it’s best to know the differences.
Sustainable energy is a set of principles in which energy production meets present consumption needs without harming future populations’ ability to fulfill their needs. This is also known under the term sustainability and it can be attained with two general methods:
- Producing energy in a clean way
- Conserving energy and focusing on energy efficiency
Renewable energy is often used interchangeably with sustainable energy and is the most common term used worldwide. Renewable energy comes from sources that renew themselves over time and have a practically endless lifespan. Renewable energy is attained from technologies such as windmills or hydropower plants. These are essential to achieving sustainability through clean energy generation.
Renewable energy can be considered as unsustainable in some cases. There is no such thing as a free lunch, and this is true for renewable energy as well. Constructing the technologies to produce renewable energy can have trade-off effects. For example, large hydropower plants can damage surrounding ecosystems. If the damage is considered more harmful than the benefit of the hydro-generated energy, the specific energy from that plant is unsustainable.
Green energy is a subset of renewable energy and is used for the renewable sources that bring on the absolute greatest environmental benefit. According to EPA, these include wind, solar, biogas, eligible biomass, geothermal and smaller hydropower plants which have a low impact.
Clean energy is most commonly used as opposed to dirty energy. Its meaning is virtually the same as of renewable energy.
Consumer perceptions of renewable
The above are definitions by official institutions and scholars. Although brands should know the differences, these are not the ones that are most important. What matters most to brands are the definitions in the consumers’ minds.
Here you must look closely at your target group. What terms does your audience prefer? Do they use renewable or clean when talking about sustainable energy generation? What does green even mean to them?
A quick Google Trends analysis reveals that renewable is popular worldwide and the same is true for green. Clean energy, whereas frequently used in the United States, Canada and Australia, is a bit less common in Europe where people prefer to use green or renewable.
A green marketing strategy must find the balance between the scholarly meaning and the consumers’ definition to be successful.
Consumers have an order of preference for green energy sources. For example, combined cycle plants are more environmentally friendly according to the textbook, but consumers perceive them as secondary to solar parks. In fact, solar power is generally considered to be the greenest even though its installation requires the use of toxic chemicals.
In the end, a consumer’s perception of what is green is the sum of all the benefits and costs related to a green energy source and it is up to the marketer to realise the thought process of the target audience and correctly identify it and utilize in his green marketing strategy.
The brand is the foundation for green marketing strategy
Being green gives brands an opportunity to increase value with green positioning and sets the foundation for an effective green marketing strategy.
A Brand is a holistic identity and image of a company in the consumer’s mind. It should inspire trust and durability and it must fulfill certain predetermined demands of the consumer. A brand is, therefore, not only the name, colour or logo. It reaches much deeper under the surface and is a symbol of quality, services and value for consumers.
Green or renewable is an attractive feature to increase brand equity and create value. It is, however, questionable how long that will continue to be the case.
In a few years time, consumers will likely not view green as an added value but a requirement which will affect their consumption pattern. This is already true in many cases, especially with millennials and consumers located in environmentally-focused regions. At that point, green will no longer be an addition to brand equity, but a loss to it if not included. In the same sense, it will make a concrete green marketing strategy move from being a point of difference to a point of parity.
Not every company is in a situation where they can position themselves as green. Far from it.
Brands need to look into their internal organization and operations. If you are an energy retailer that supplies energy solely from solar parks and wind farms, great, you can pursue green positioning and a green marketing strategy. If you supply energy produced from burning coals and your only connection to renewable is recycling waste in your office space, then a green approach likely isn’t for you.
What if a green marketing strategy isn’t right for you?
Like said before, a green marketing strategy isn’t right for everyone – and it would be unnatural if it was. As the map below demonstrates, the world is far from being 100% renewable when it comes to electricity generation. In 2017, 17.5% of energy consumption within the European Union came from renewable resources.
So if renewables only account for so much, how come it seems like everyone is green?
Companies tend to put emphasis on their green initiatives, often no matter the size or seriousness of said initiative. As mentioned before, almost all companies have some renewable in them. The issue is that it tends to be communicated incorrectly and regularly in a deceptive manner, known as greenwashing.
It’s okay to tell consumers about how you have charging points for electric vehicles in your parking lot, in fact, it’s great. But that doesn’t mean it should be the sole driver for your communications.
Branding is about creating a special placement for your company in consumers’ minds. Marketing communicates and reinforces that placement. If your consumers don’t perceive you as green and you go on about like you are without proper backing, you can damage the brand’s trustworthiness which results in a significant decrease in brand value.
Instead, what you should do is just being honest. We still need dirty companies in our daily life and consumers still establish strong connections to brands even if they are not renewable.
Consumers value trust and trust is even more important when dealing with commodities such as energy. Don’t try to hide the unsustainable aspects of your operation, focus on them and work towards making them sustainable. Then communicate that to your audience while actively involving them in the process.
Putting it all together
There are a lot of things that need consideration if you are thinking about pursuing a green marketing strategy. If you decide to do so, your brand must back it up. It isn’t enough to slap a green sticker on your promotional materials. It has to be supported by internal values and the corporate vision as well as having green offerings or initiatives. For energy companies, this means actually being green to the core. For regular consumer brands, this means massive investments in energy efficiency and buying your electricity from renewable sources.
Talk to your consumers in a language they understand and educate them when it adds value to the consumer experience. Above all, stay true to your brand and mind the perception gap carefully. This means operating in that sweet spot where consumers’ perceptions of you are perfectly aligned with the company’s core values and vision. In that spot, you will create lasting relationships with consumers built on transparency and trust and maintain and build a strong brand.
Green is one of three main themes at CHARGE this year. The discussion will cover all things green-related including how to leverage a green brand to implement a successful green marketing strategy. We will hear success stories from established energy brands and how they build their green marketing strategies. We will dig deeper into questions such as the difference between green and sustainable and how the consumer perceives the two to be different. Click the button to learn more about the programme, browse this year’s speakers and read about the CHARGE Awards Ceremony.