Business Journal

Time to Green Your Business

Consumers, investors, and prospective employees are seeking out environmentally friendly organizations

It's Earth Day, which means many companies are touting their commitment to the environment. The problem is that plenty of people still think businesses are more interested in making green than going green.

According to Gallup, 85% of respondents are somewhat or very concerned about environmental or sustainability issues. A similar percentage, 83%, say they make some or a great deal of effort to incorporate environmentally friendly behaviors into their daily living. But about 8 in 10 respondents agree that they are skeptical of corporations that promote themselves as environmentally responsible, and about 9 in 10 agree that most corporations talk a lot about environmental responsibility but don't make really significant changes.

Whether companies aren't doing enough in this area -- or aren't effectively marketing what they are doing -- they're missing opportunities: 94% of respondents somewhat or strongly agree that it is important for companies to not just be profitable, but to be mindful of their impact on the environment and society.

Green -- or Whitewash

And respondents seem willing to reward companies for focusing on the environment. About two-thirds of respondents agree that they are more likely to work for and invest in companies that take steps to minimize their impact on the environment. As for consumers, more than three-quarters of respondents at least somewhat agree that they are willing to pay more for energy-efficient products, are more likely to choose one brand over another because it is environmentally friendly, and are more likely to choose a brand from a company that is taking steps to minimize its impact on the environment.

What's more, 60% of respondents say they bought a product because it was environmentally friendly, while a similar percentage say they are likely to do this in the next 12 months. And one-third of respondents shopped at a store because it promotes environmental causes; again, a similar percentage of respondents say they are likely to do this in the next 12 months.

In all, 70% of respondents say they are very or somewhat likely to go out of their way to purchase products from an environmentally friendly company. And to be sure a company is truly environmentally friendly, one in five respondents say they have visited a company's website to learn more about its policies and practices concerning the environment. Furthermore, one-quarter say they are likely to do this in the next 12 months.

Wanted: energy-conservation and renewable-resource strategies

Some companies may not be doing much regarding the environment, but those that are should reconsider their current messaging and practices. Although the percentage of respondents answering "Don't know" is between 14% and 26% for each of the following actions, about two-thirds of respondents rate companies as fair or poor in:

  • promoting the use of sustainable resources
  • practicing energy conservation
  • minimizing their carbon footprint
  • developing sustainable manufacturing processes and resources for the future
  • developing products that are sustainable

About three-quarters of respondents also rate these businesses as fair or poor in their efforts to use packaging that is environmentally friendly.

"Going green" can mean many things. Companies can attempt any number of environmentally friendly efforts to win over green-conscious consumers, investors, and potential employees. A recent report found that three out of five employers measure their cost savings from environmental programs. Majorities of American companies surveyed reported savings in electrical costs, heating and cooling expenses, and water consumption, according to the report.

Many corporations align their impact on the environment directly with their business goals.

Similarly, Gallup asked respondents to select one or two actions from the following list of five that they think are most important for companies to take to help preserve the environment:

  • conserve energy or use renewable energy sources in their manufacturing and day-to-day operations (74% said one of most important)
  • use minimal or environmentally friendly packaging (42% said one of most important)
  • reduce the carbon footprint of the product they manufacture (36% said one of most important)
  • educate consumers about environmentally friendly products and practices (25% said one of most important)
  • provide financial support for environmental causes (16% said one of most important)

And when asked to what extent these corporate actions actually influenced their choice of specific products or brands in the last six months, respondents' answers also are mixed. A slim majority of respondents say a company's use of minimal or environmentally friendly packaging (57%), a company's efforts to conserve energy in manufacturing and day-to-day operations (52%), and information a company provides about its environmentally friendly products and practices (51%) influenced their purchase of specific products or brands somewhat or a great deal. In contrast, minimal majorities of respondents say a company's efforts to reduce the carbon footprint of its products (53%) and a company's financial support for environmental causes (57%) influenced their choice of products not too much or not at all in the past six months.

Commitment and communication are key

Some of the world's largest companies have accomplished substantial achievements in many of these areas of sustainability. Flip through the pages of these organizations' annual corporate social responsibility and sustainability reports, and you'll find a virtual blueprint outlining how these companies went "green." Some tout their efficient use of water. Others highlight their expanding use of hybrid trucking fleets. Many extol their efforts to eliminate their entire environmental footprint.

Throughout these reports, efforts to be environmentally friendly and sustainable are tied back to the bottom line. Many of these corporations align their impact on the environment directly with their business goals. Others explain in great detail the vast sums of money they've saved by enacting strategies to reduce their negative effect on the environment immediately around them -- and the world at large.

But if respondents are skeptical about companies' commitment to being environmentally friendly, what can organizations do to win them over? Not every consumer will search out corporate annual reports and thumb through dozens of pages of charts detailing reductions in greenhouse gas emissions.

Once a company has put a sustainability strategy in place and experiences positive outcomes, effective communication becomes the crucial next step to converting consumers to the brand. It is one thing to know how many cubic tons of greenhouse gases a company has mitigated from its manufacturing footprint; it is another to help the public understand what those efforts mean to them, to the environment they experience, and to the world they know.

Gallup's research suggests that if organizations can convince consumers that they are dedicated to finding environmentally friendly ways to do business, they can expect to do business with customers who are conscious of the green movement. And that, in turn, can mean more green for their efforts.

Survey Methods

Results are based on a Gallup Panel study and are based on mail and Web surveys completed by 953 national adults, aged 18 and older, conducted July 1 - August 1, 2010. The Gallup Panel is a probability-based longitudinal panel of U.S. adults that are selected using random-digit-dial (RDD) phone interviews that cover both landline and cell phone and address-based sampling methods. The Gallup Panel is not an opt-in panel. The sample for this study was weighted to be demographically representative of the U.S. adult population, using 2012 Current Population Survey figures. For results based on this sample, one can say that the maximum margin of sampling error is ±4.0 percentage points, at the 95% confidence level. Margins of sampling errors vary for individual subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error or bias into the findings of public opinion polls.

Bryant Ott is a writer and editor at Gallup.
Gallup http://www.gallup.com/businessjournal/147221/Time-Green-Business.aspx Gallup World Headquarters, 901 F Street, Washington, D.C., 20001, U.S.A +1 202.715.3030