What buyers expect and what brands are ready for
ECO-MARKETING
Would you buy sneakers made from recycled cotton, fish scales, or plastic bottles? Many brands are now trying to become more sustainable, but the question remains how to involve the customer in their eco-initiatives. Despite all the positive aspects for the preservation of the environment, it is not enough to simply modernize production facilities for a successful eco-marketing campaign. We'll have to figure out the intricacies of marketing - Alexander Lazarenko, Founder and CEO of Offsetted, and a student of the MOOVE Program from Moscow School of Management SKOLKOVO and MTS wrote about this in a column for Sostav.
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The first eco-players
Companies from the fashion and FMCG segments were the first to introduce eco-friendly solutions. They are still industry leaders in environmental sustainability. The Body Shop in the late 70s offered customers to purchase cosmetics in reusable packaging, and also refused to test cosmetics on animals. Patagonia, one of the largest manufacturers of clothing and equipment for climbers and backpackers, began donating 10% of its profits to eco-projects that preserve the planet in the 1980s, and later made clothing from recycled plastic bottles.

The initiatives of individual companies were taken up by market leaders, including Nike. In the 90s, the brand launched a program to build new playgrounds from recycled sneakers. The practice of reporting on corporate social responsibility, which is now issued by the largest companies, from Russian Railways to Microsoft, was introduced by ice cream maker Ben & Jerry's (Unilever) - the company supplemented its financial report with an overview of the company's impact on the environment. FMCG companies continue to lead the industry in environmental sustainability.

The most popular eco-marketing solutions in Russia are the use of eco-labels, rejection of plastic or claims for its recycling, and, accordingly, integration of green branding elements and eco-prefixes for goods and products. Following a global study by PWC, 32% of Russians try not to use plastic when there is an alternative, and 29% choose sustainable packaging or try to buy less packaged products.

Packaging modernization is one of the most understandable eco-marketing tools for buyers. But this decision also has pitfalls for companies.

For example, Yandex.Lavka and Local Kitchen were faced with a choice: which packaging leaves a smaller ecological footprint - a plastic bag or a paper bag? At first glance, paper bags degrade faster, which means, as the consumer thinks, make them more environmentally friendly. In reality, at the stage of raw materials extraction, production and delivery, they produce much more carbon dioxide emissions, namely, their accumulation in the atmosphere intensifies climate change. And it turns out that taking into account the life cycle, the plastic bag is preferable and more environmentally friendly.
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Life Cycle Assessment
In order to convince customers of the effectiveness of their eco-initiatives, it is useful for brands in communication to use a life cycle assessment to compare eco-initiatives and their impact on nature at each stage.

In this context, the ecologically correct marketing decision prevails in Europe and the USA today - working with carbon neutrality, the company's carbon neutrality through the calculation and subsequent reduction or compensation of its ecological footprint. For example, Netflix is cutting down on electricity consumption and investing in restoring ecosystems that naturally accumulate carbon dioxide. McDonald's lowers the carbon footprint of meat and packaging, and Farfetch offsets emissions from every shipment by investing in projects that restore forests and develop renewable electricity.

However, there are cases of dishonest marketing - the so-called greenwashing. Common greenwashing marketing gimmicks include the use of non-existent eco-labels and false claims by fashion retailers about recycling clothing. Sometimes the implementation of an initiative without assessing its effect on the environment raises questions. For example, P&G recently replaced conventional plastic packaging with soft plastic doypack packaging. Indeed, it contains less plastic, but there are practically no enterprises in Russia where this material can be recycled. There were no such problems with the previous packaging material.
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Eco-friendly initiatives without harm to business
While communicating with market experts, we realized that technologies in eco-marketing should meet two main parameters - bring a real environmental effect and not upset the economic balance of the business.

For example, Offsetted helps manage the eco-footprint of business and at the same time involve customers in this process. In this way, the brand can cope with the costs of eco-initiatives and maintain an economic balance, which provides it with the opportunity to implement its environmental initiatives in the future.

Another example of achieving real environmental benefits is investing in renewable energy projects to reduce our eco-footprint in the future. However, this path is more suitable for big players. For example, the Russian Unilever is investing in the Finnish Fortum, which created the first industrial wind farm in Russia, and the Hevel Solar, which develops solar energy systems for businesses and residential buildings.
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Customer engagement
It is important to involve customers in eco-initiatives to effectively implement eco-marketing. Therefore, they must be approachable and emotionally responsive.

You shouldn't expect the customer to personally hand over the bank's plastic card to the only office in Moscow for further recycling. It is also important to convey to them the value of their action and clearly communicate what will happen if they support the company's environmental initiative.

We use a similar approach in the case of the sustainable fashion brand PLAIN. The company invites customers to pay for compensation for the ecological footprint of goods directly in the cart of the online store. All funds are redirected to the processing of the purchased volume of clothing by the Vtoroye Dyhanye Foundation, as well as to preserve forests and absorb carbon dioxide emissions from the delivery of goods together with the Altai Forestry Project. The cycle of communication necessarily ends with a result to satisfy emotional and social needs - the client receives personal statistics on the compensation effect - in grams of recycled clothes and kilograms of absorbed emissions, and can also share his achievements on social networks.
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Sustainable marketing opens up new opportunities for companies
Eco-marketing helps increase business metrics and become a brand gateway to key marketplaces and new markets. Here are some examples.

Splat has launched a separate sub-brand Bio Mio, which is positioned as "ecological household non-chemicals". A year after the launch, the project increased the company's revenue by 100 million rubles. Bio Mio recently installed refilling machines, which can be used to pack goods into packages previously purchased from Perekrestok supermarkets. The solution provided good media coverage for the brand.

Natura Siberica experienced explosive growth in the value of its assets in 2016, when it was positioned as a manufacturer of natural and organic cosmetics.

There are examples of the eco-marketing effectiveness in foreign markets, for example, in clothing brands - compensation for the ecological footprint of goods allowed them to multiply increase the LTV of users. For example, Ungalli Clothing doubled the conversion to the repeated purchase in the cart from 0.8% to 1.7%, and TAMGA Designs - by 251%.

Farfetch promises to partner only with conscious brands by 2030, and Asos has created a separate category on the site to promote sustainable products.

More and more people are embracing sustainable living principles in their personal actions and value the care of the planet from commerce. According to Nielsen, the social and environmental responsibility of the brand is important for 62% of consumers in Russia. Therefore, it is worth not discussing, but asserting that eco-marketing today is one of the real tools for retaining customers.

It is also worth considering the fact that the implementation of ESG - Environmental, Social, and Corporate Governance - becomes a prerequisite for attracting investment. Since 2014, there has been a positive relationship between investing in ESG-reporting companies and the return on their securities.

Full article: https://www.sostav.ru/publication/eko-marketing-chego-zhdut-pokupateli-i-na-chto-gotovy-brendy-48276.html
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