Category Archives: sustainability

What opportunities for green marketing as retailers expand in Indonesia?

Carrefour logoThe Jakarta Post had this interesting tidbit of news a few days ago: “This year, minimarket chain Indomart is targeting to open 750 new outlets while its main competitor Alfamart plans to open 600 new outlets. ” This is happening while hypermarkets continue an aggressive expansion across the archipelago, with Carrefour Indonesia (40% market share in the hypermarket segment) planning to give the country 20 new outlets each year.

So if you’re working for an environmental NGO, why exactly is this worth stopping to think about?

Convenience shopping carries a rather mammoth footprint with it. Every additional retail outlet that opens represents new transport journeys for distributors, which creates additional traffic and polluting emissions. Add to this energy use to air-condition and light large spaces. Then you have the products themselves, packaged in styrofoam and other plastic material—and we all know where this packaging will end up (hint: not in a sanitary landfill).

If we look beyond the employment opportunities and added convenience that more retailers will offer to Indonesia, one thing is clear: unchecked and unmanaged, their impact will be felt in the air that we breathe and the water we use to wash ourselves.

And here is the opportunity for environmentalists and retailers: crafting alliances to collaborate on energy use optimization, waste reduction and consumer awareness. This will ensure that as we see more supermarkets around us, our living environment does not suffer from it.

For progressive companies, this means working with NGOs to source food products locally as much as possible, reduce superfluous and polluting packaging, and most essentially, educate customers through green marketing and work with them to reduce their environmental impact.

Because of their centralized structure, companies such as Carrefour and Hypermart lend themselves well to implementing environmental measures that will be replicated at a national scale. Some NGOs may balk at the prospect of working with big corporations—but it may offer the best chance of delivering large-scale actions that will limit the environmental impact of modern shopping.

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Forget about saving Earth; will tree planting help your company’s image?

Picture this. A CEO with muddied boots kneels down and gently inserts a small green seedling into the ground. Photographers snap away, onlookers clap politely, and journalists start scribbling furiously a few ideas for a smart headline.

The corporate frenzy for tree planting (tanam pohon in Indonesia) is still in full swing, but the question is: how can this kind of activity really make a difference for the environment and for your company’s green image?

(I had promised to write about tree planting in a previous post, and with a recent heated discussion on the subject flaring on the green living mailing list I help co-moderate, and actress/celebrity/jack-of-all-trades Luna Maya now planting trees for a cigarette company, now seems  a good time to talk about this.)

On the surface, tree planting seems like the easiest fruit to pluck from the CSR tree. You can associate it with the issue of climate change, it’s a relatively cheap activity, it shows visible results (at least in the short term, and especially if planting happens in a bare area), and it allows VIPs to get their hands dirty and be pictured doing the right thing.

And as the Luna Maya story has illustrated in the past week, it can also generate considerable media coverage, strengthening your brand.

But as this blog keeps ranting on (and on) about, too many companies are not aware of the risks they face when sticking to safe, predictable and short-term environmental CSR activities that promote image over substance.

The truth is, many of these tree planting activities are one-off events, with seedlings promptly forgotten once the show is over.

According to a source, in West Java, an IDR 25 billion tree planting programme failed spectacularly, with only 10% of seedlings remaining one year later. Not the kind of news you want to see in the public media, especially when associated with your brand (by that time Luna Maya’s publicist won’t be returning your calls).

Now how about this?

  • Consider whether tree planting has anything to do with your business activities. I mean, if you’re selling stethoscopes, does it make any sense to sink part of your CSR or marketing budget into planting trees?
  • Now assuming you see a logical connection between your business and tree planting—let’s say you’re in the pulp and paper sector—what are you going to do to ensure that tree planting is actually delivering added value to the local ecosystem and to the people who live there? Think local income opportunities, educational benefits etc.
  • Collaborate with people who know about tree planting. Don’t buy the cheapest seedlings and plant them on the next available slope. Talk to specialists and partner with them. Engage with the local community and listen to their aspirations.
  • (“It sounds like a lot of work”. Yes, sustainability usually is, but you reap benefits further down the track. Honest.)

So let’s look at this again.

Your company has now developed a solid strategy for greening an area whose ecosystem will be greatly enhanced with new trees, and you have identified collaboration opportunities with local folks so that they can draw revenue from these trees.

Sounds like you’re good to go?

Not yet. If  you don’t have a budget set aside to regularly monitor and take care of the trees for the next few years, you’re just seeding failure, wasting resources and exposing yourself to some potentially nasty backlash once the seedlings wither and die, and people start taking notice. You may also hear the word greenwash. Hence the critical importance (notice the underlining?) of budgeting for this activity into the long-term.

Set? Now you can call Luna.

The great green marketing add-on!

Flip flops by CinOk, so let’s talk about flip flops. With companies falling over each other in their efforts to position their products to consumers as green (any product it feels), it is worth considering exactly what kind of green marketing we can expect to hit the tube, billboards and magazines in the years ahead across Southeast Asia. Let me illustrate.

Say that you are Irfan Damial, head of Marketing at Crazy Shoes, and that your CEO asks you to pitch your latest flip-flops as eco-friendly (“Yo Irfan, slap some green on that will you? That colour just sells!”). Yes, the same flip-flops you have been churning out at a rate of 1,700 sets per day for the past 16 years.

Well, Irfan, you don’t have that many options–either you come up with ludicrous claims (rubber is a natural element, hence our shoes are environment-friendly!) or you suggest to your boss that Crazy Shoes invests in serious R&D to reduce raw material use, packaging etc. Neither is going to take you very far (although an illuminated CEO should give you a raise for suggesting the second one.)

(Incidentally, this story may be partly true. I recently saw a pair of $1.5 ‘ecological friendly footwear’  at Carrefour on Sunset Road in Bali. If that’s not a sign that green marketing is entering mainstream I don’t know what is.)

Stories like this are likely to become increasingly more frequent. A survey released earlier this year of more than 370 marketing and advertising executives provides evidence that green marketing is increasingly popular–82% of survey respondents said they planned to use more green messaging in their marketing.

The big question here is, of that 82% how many will resort to giving their products the ‘green marketing add-on’ treatment (sic the flip-flop anecdote)? According to Terrachoice, more than 90% of products with green claims are greenwashing in the U.S. market. In less developed markets, there are reasons to think that this may be worse.

But the simple fact here is that if you don’t get the product right—in the way that only a good quality product with a small environmental footprint can—then no amount of green marketing is going to make your product ‘eco’. As green marketing guru Jacquelyn Ottman says, green marketers must take an extra step of managing the product’s life cycle impacts.

If you thought that marketing was tough, then selling environment-friendly goods just made the game a whole lot more complicated—but definitely more worthwhile.

3 is a winner: Indonesian waste law, product responsibility & green marketing

Every day, with a ching and a smile, tens of thousands of laptops, light bulbs, juicers and electric fans change hands from retailers to consumers across Indonesia. Now fast forward to a few years later, when these electric appliances burn out, and end up decorating landfills, polluting rivers or torn apart by street kids to recycle components and sell them back. So if you’re the manufacturer, what do you do?

Option 1: You look the other way. I mean come on–things are hard enough trying to stay profitable in these tough times, making sure your products adhere to safety standards, and trying to reduce waste at your production site. How on earth are you going to keep track of your products after they have been sold and used? (That’s when you start grumbling about environmentalists and how they’re never satisfied with efforts made by businesses to reduce their environmental impact.)

Option 2: You come to terms with the fact that you have a liability on your hands. If you’re producing batteries, how badly do you want to see them scooped up by school kids during a clean up operation in a natural reserve (say Muara Angke in Jakarta for example)? Or photographed in the hands of a woman in rags trying to pry them open to salvage their components?

(If you are manufacturing and selling products in Indonesia, just consider the legal implications of having your products littering the country. Law 18/2008 on waste management could not be clearer; producers are required to manage their packaging and/or products that do not degrade naturally (source here). For those of you who like fancy terms, this is called Extended Producer Responsibility. According to The Economist, 31 of America’s 50 states have product-specific EPR laws. The European Union requires manufacturers to dispose of packaging, electronics and vehicles. Canada and Japan also have EPR laws.)

Option 2+: You do something about it. While some companies will squirm and stick to option 1, enlightened companies  will see here an opportunity to build customer loyalty. Look at US firm Staples for example, which sells office supplies–the company has rolled out a take-back programme for used items such as computer monitors, compact fluorescent light bulbs and batteries.

Is it a cost? You bet it is. But consider how Donny comes back to your store with a used item he wants recycled, and he gets to exchange it with one of your newer products at a discounted price. In one neat move, you have showed the world that you are taking responsibility for your products, you have offered your customer a service to rid him of a now useless device so that you can dispose of it safely, and now you have sold him a new one while making him feel good about it.

If none of this sounds convincing to you, consider this. In Java, the heart of Indonesia’s manufacturing sector, environmental capacity is already at critical level. That means the island cannot accommodate any more environmental abuse, whether pollution or infrastructure development (with more than 60 million people, this is hardly surprising).

Time to start thinking about how your business operation can avoid contributing to this disaster in the making.

Free ‘green bag’! (with bonus plastic wrapping)

What do you get when you buy two packs of detergent? No less than a free cloth ‘green bag’ (the brand’s term, not mine).  Such was the deal on offer at a Sanur supermarket today, strategically placed next to the cash register for those impulsive last second purchases.

Two things struck me.

First, you have to appreciate the irony of getting a free ‘green bag’ which—get this— is wrapped in its own plastic bag, and then bundled again in more transparent plastic wrapping for the 2 packs of detergent. Whereas the original reason for the so called ‘green bags’ was to reduce disposable plastic bags, this detergent promotion essentially tramples over the whole idea and hands you a cloth bag with green motifs (of course emblazoned with the brand name) while still using adding plastic to the waste stream.

Second, the ‘green bag’ label has officially lost its true significance. It now essentially boils down to this: design a bag from any non-plastic material (or even polypropylene (yes, its plastic)), slap on it some green leafy motifs, mix in a slogan with the words green or eco, brand it, and hey presto—green bag! Will your customers use it? Probably. Will they reduce their use of plastic bags because of it? Probably not.

And here is the problem. A ‘green bag’ is never really a green bag unless its owner turns it into one. And that doesn’t require magic—only bringing it along for a shopping trip on a recurrent basis. Until this happens, businesses are stalling on their sustainability work.

In 2010, so-called ‘green bags’ are no longer a market differentiator to burnish a company’s sustainability credentials. Its time to move on. To stand out from the competition and implement a business sustainability policy that catalyzes a demonstrable positive change, don’t just give your customers a free cloth bag. Show them how to use it in a green way, and then reward them for it. Freebies. Discounts. Anything that reinforces the behaviour and loyalty to your brand.

And perhaps a good start would be to give away the detergent IN the green bag, rather than packaged in plastic.

The next conservation battleground: cities

Consider this.

  • 2009: first time in history when one in two humans lived in urban areas.
  • 2010: A study from the Earth Institute tells us that the highest forest losses are correlated with 2 factors: urban growth within countries; and, mainly in Asia, growth of agricultural exports to other countries (for dramatic illustrations of these trends, look no further than the slums clogging cities such as Jakarta, Beijing or Bangkok.)

For those of us engaged in stopping deforestation, these two facts point to cities as the arena where the next conservation battles must be fought. As urban centres swell with an influx of people from the countryside and total purchasing power grows, demands on commodities such as palm oil, soy, sugar and cotton follow accordingly. Hundreds miles away, this demand is met by ever faster encroachment into the remaining patches of forest, flattened in favour of plantations.

Influencing consumer behaviour in the largest cities–say with more than 5 million residents–through localized, sophisticated, campaigns that provide the public with attractive alternatives to products that have contributed to deforestation may prove more effective than spatial plans, protected areas, law enforcement patrols and the like.

At the end of the day, consumers run the show. When a product’s sales drop–hopefully because a campaign has effectively convinced consumers of the brand’s unsavoury environmental and social practices–then you can be sure that the executives will start paying attention, and clean up their act–pronto.

Because of their size, density, and combined environmental impact beyond the limits of the urban area, cities are the best place where we have a fighting chance to keep forests standing. But to do this, we must win the hearts of tens of millions of people who through their daily acts are unconsciously undoing the natural world, one purchase at a time.

This is the time; the public is attentive to ‘green’. Can we be smart enough to capitalize on this interest to make them make more responsible purchasing choices?

Greenwashing in Indonesia: good or bad news?

More and more companies are making “green” claims in Indonesia, including some with a dubious reputation in terms of environmental governance. Overall, this is a good trend—companies want to capitalize on a green wave, and some are making genuine efforts to reduce their operational impact on the environment. The problem is, in the absence of green labels or consumer awareness, many companies are fooling their markets by making irresponsible claims about measures they claim to be taking. Here are my comments on this matter in the Jakarta Post.

Companies post glossy green claims to gain more profit

Prodita Sabarini ,  The Jakarta Post ,  Jakarta   |  Wed, 01/06/2010 10:56 AM  |  City

It starts from here: A woman takes a picture of a poster depicting an ideal low-energy system for a house, on display at the Green Festival last year. The festival was criticized by Green Map Indonesia because it was sponsored by the Sinar Mas Group, a company that has come under the spotlight for alleged widespread deforestation.  JP/NurhayatiIt starts from here: A woman takes a picture of a poster depicting an ideal low-energy system for a house, on display at the Green Festival last year. The festival was criticized by Green Map Indonesia because it was sponsored by the Sinar Mas Group, a company that has come under the spotlight for alleged widespread deforestation. JP/Nurhayati

A fancy five-star hotel gives guests the choice to infrequently change towels because it’s environmentally friendly. A property development dons a big banner reading it’s a “green project” because it’s planting trees.

Or a supermarket claims it is environmentally friendly by selling reusable grocery bags.

Don’t be fooled.

As the globe warms and the issue of environment becomes more prominent, producers in Jakarta
are claiming to be green to win customers.

There is an increasing practice of “greenwashing,” where companies market products and services using misleading or false environmental claims.

The term greenwashing is taken from whitewashing, meaning to hide, cover or conceal unpleasant facts and details, or manipulate.

“It’s misleading. They’re smart because they take advantage of the feel-good factor.

“But the foundations don’t change,” architecture lecturer and green activist Elisa Sutanudjaja said.

Elisa said property developers used this method. She said developers proclaimed they were green because they planted trees. This was not enough, according to Elisa.

For properties to make green claims, constructions should be energy efficient, areas should support public transport and there should be water catchment areas, among others.

Elisa said that a property developer from the Green Building Council Indonesia was developing an elite housing complex in former unused land in North Jakarta.

The properties have basements connecting to each other, Elisa said. “It used to be land that could absorb water. The basements will impact on water-catchment areas, which contributes to flooding,” she said.

Other greenwashing methods are sponsoring green events such as replanting mangrove forests, but not changing production practice to be more environmentally friendly.

Komunitas Greenlifestyle volunteer Marc-Antoine Dunais said the abundance of “green” messages was positive.

“It means companies consider ‘green’ a selling point for their products and services, providing an opportunity to improve corporate practices, reducing environmental impacts and changing consumer behavior.

“The devil, as usual, is in the details,” he said.

He said that greenwashing was a problem because it abuses consumer trust and reduces incentives for other companies to make honest, credible environmental claims.

“Most importantly, it gives consumers the illusion that there is some kind of ‘go green’ revolution and our environment is better for it,” he said.

“Yes, there is a ‘green’ information revolution, but we should be looking at results.

“Is there less waste and pollution? Are ecosystems in better conditions? Is there more environmental justice?

“These are the questions we need to be asking, especially as we are in a jurisdiction where there is no ‘watchdog’ agency to monitor green claims and make companies accountable,” he said.

A group called Indonesia Bergerak (Indonesia Move) said that it’s currently attempting to create a consumers’ movement for products that promote sustainability and social justice.

“We’re pushing forward because we realize that consumers need to be active in making change,” Indonesia Bergerak chief Tejo Wahyu Djatmiko said.

The group is publishing a bi-monthly free magazine on “green” consumption. Tejo said the group wanted to encourage ethical consumers. “Our consumerism is on a dangerous level. It’s driven by want, not need,” he said.

Indonesian Consumer Protection Foundation (YLKI) chairman Husna Zahir said consumers should be more aware about their right to be informed.

Indonesian Center For Environmental Law Rino Subagyo said it was possible to sue companies that made false environmental claims on their products. Husna said there should be a body that could rate whether a product was in line with their “green” claims.

In the US, there are organizations that provide an index on greenwashing. Indonesia does not.
Husna said consumers currently understand their rights to safe products, but they did not understand their rights to products produced sustainably. “This needs to change,” she said.