Environmental and Social Responsibility

There was a great article in the Wall Street Journal called, “Luxury-Good Makers, Brandish Green Credentials.” In this article it talks about how consumers are insistent that companies become more environmentally responsible.

According to the Cone Consumer Environmental Report conducted early in 2009, 34% of adults are more interested in buying environmentally responsible products during this recession than when it started. There is a growing concern that business in general has been irresponsible not just our bankers but the people who make and sell us the things we wear, eat, watch, listen to, or otherwise consume. This is most prominent in young consumers.  Milton Pedraza, who is the CEO of the Luxury Institute says,

“Young consumers believe that caring about the environment is how you create a meaningful life.”

In fact luxury brands are really jumping on the environment bandwagon. Brands like Louis Vuitton have been conducting a carbon inventory since 2004, trying to reduce the negative environmental impact on their green house emissions. Their parent company has even created a film which was released in over 100 companies highlighting man’s abuse of the environment. It seems that even in luxury goods, being green is essential to help consumers feel good about spending money. Environmental and social responsibility is now a positive driver of brand value; in fact, it’s a turbo charger. Many companies are being accused of green washing and this is well deserved. For example, building sneakers out of recycled water bottles and calling them vegan is cute, but most of the other processes used in their production are hardly what would be considered green. Applying the word organic to clothing is a stretch; nevertheless people are trying hard. Wal Mart has spent considerable money and time with the founder of Patagonia trying to come up with supplies of truly organic cotton and recyclable materials, because the growing demand for responsibly-made clothing and organic food is growing through the roof. Yes, at Wal Mart.

The global recession has hit the luxury goods and all consumer goods really hard.  Consumers have very high expectations to become even more choosy with their dollars. Going green is just not the right thing to do it’s the strategic thing to do. We’ve crossed a tipping point with environmentally responsible consumer goods. This is a tidal wave that is not going to recede but flood the Earth, and soon its going to be required just to be a player in a consumer game and it must be. Everything else is not sustainable. The people/companies who don’t get this are dinosaurs, who don’t know they’re nearly dead.