Climate Change and Shakespeare

Posted by: Peter Lacy on December 15, 2009

This is a guest post about the UN Climate Summit in Copenhagen from Peter Lacy, Accenture

So what’s the link between Shakespeare, consumers, and sustainability? Well, after listening to Muhtar Kent, Coca Cola’s president and CEO, speak at Kronborg Castle in Copenhagen—apparently the Castle that inspired Shakespeare’s Elsinore in Hamlet—I believe it is clear that the big consumer brands are significantly stepping up their activities on sustainability.

Muhtar Kent and Paul Polman, the CEO of global consumer-goods giant Unilever, launched a major new sustainability initiative on Friday at the Copenhagen Summit ‘Business Day,’ aiming to better understand the potential to shift global supply chains to a low carbon trajectory. This would certainly be a substantial contribution to climate change if Paul Polman is right and 5 billion tons of C02 are embedded in the consumer goods supply chain (10%-plus of global emissions).

But to be or not to be? That is the question really on everyone’s lips around consumers and sustainability. Are consumers really likely to be a driving force in the shift to a low-carbon economy, or when it really comes to it, are we likely to see spending driven by traditional triggers such as quality, availability, and price, particularly the latter in turbulent economic times?

According to Kent, discussions at Coca-Cola's retail research council suggest advisers from Terry Leahy at Tesco to Rajendra Pachauri believe, "The consumer is at the heart of a low carbon economy." It's a statement of aspiration that sounds right, and Kent is certainly acting on it—for example, by shifting from HFC to other refrigerants in Coke's staggering 10m fridges around the world—reducing their emissions by a factor of 1400:1. But evidence and opinion on whether consumers care is mixed.

A recent survey from the Pew Center demonstrates that U.S. citizens and consumers have apparently lost much of their interest in climate change and environmental issues in general, and the U.S. is one of the few places in the world where belief in the science is actually decreasing rather than increasing. For example, only 35% of Americans saw climate change as a serious problem as of October 2009, down from 44% in April 2008.

Nevertheless, other studies suggest consumer interest is steady even in tough times. Accenture's own Climate Change Consumer Observatory—based on an annual survey of 11,000 consumers across 22 countries over the last 3 years—indicates that consumer interest in climate change has held and there appears to be an increasing number acting on this with their dollars, cents, and euros (albeit from the margins and a low base).

This seems to resonate with Kent's statement that about one third of Coke's customers show a strong interest in sustainability on a range of issues from climate change to water to recycling. That concern is also apparently growing. But much of the debate about consumers and climate change, or sustainability more broadly, focuses on whether customers are prepared to pay premium prices. This is a mistake and leads down a dead-end. It's clear from most studies that, given other cost concerns, most consumers are decreasingly likely to want to pay a premium for sustainability performance. Niche markets are seemingly becoming less attractive.

But the lack of willingness to pay a differentiated price for the sustainability credentials of goods or services doesn't mean that consumers aren't prepared to differentiate based on sustainability performance with all other things being equal—e.g., price, quality, and availability. In that sense, sustainability has become a tie-breaker for mass market consumers who can't be, or perhaps simply aren't, prepared to pay more but who would still like to align values and concerns with their purchasing power.

Smart consumer goods companies and retailers such as P&G, M&S, Wal-Mart, Coca-Cola, and Unilever are recognizing this and rethinking their value proposition—both in terms of the product itself and how it is marketed and their value delivery—the way they structure their global manufacturing, supply, distribution, and even recycling policies, and 'value capture' (revenue and cost models), all in light of growing consumer interest in sustainability that is beginning to translate into some interesting early buying signals (particularly among Generation X and Y around the world).

And if there's one thing Coke understands perhaps better than anyone else, it's how to tap into powerful consumer trends. So again, "to be or not to be" on consumers driving a low carbon transition? I will leave you to answer that. I still have some doubts. But I think that with all of the Copenhagen and climate media momentum, corporate activity, and indeed government intervention to create a level-playing field for consumers through labeling and standards, Coke may be onto a good bet. So perhaps by learning from Coke's moves, we have more to learn from Shakespeare's Venus and Adonis than Hamlet: "Make use of time, let not advantage slip"!

Peter Lacy, based in London, is managing director of Accenture Sustainability Services for Europe, Africa, Middle East, and Latin America. He is blogging this week on the UN Climate Change Summit in Copenhagen.

Reader Comments

Strategery

December 15, 2009 11:24 PM

I think Coke should release a "flat" version of its drinks (already available from fountains). Basically, CO2 would not be added to the beverages--you know, the "fizz". I, for one, will not pay extra for "low carbon" products, nor will I adjust my lifestyle with the sole goal of reducing my carbon footprint. Why? First of all, climate change is a scam to tax and regulate every human activity. Secondly, the elite like Al Gore have done nothing to reduce their own carbon footprint. Gore takes trips on private jets, he has a 100 foot yacht, and he owns several properties--each with their own emissions. This conference alone released 40,500 TONS of CO2. The people who can afford to pay for low carbon products have already caused more emissions than the average person because, more than likely, it took natural resources and energy for them to build their wealth.

Innocent

February 3, 2010 9:29 AM

Very insightful post. I agree with Strategery.

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Kefka Pelazzo

February 13, 2010 10:24 AM

While I don't disagree with the concept of flat drinks I do disagree with the suggestion that global warming is just a scam. Honestly I've become weary at hearing such claims put forth with zero evidence to back them up.

Climate change, global warming, whatever you want to call it is real. There is so much scientific evidence proving this now that the real argument amongst academics is whether or not man's activities actually contribute to global warming.

While there exists a deal of evidence arguing both sides the fact is that no clear conclusion can be drawn as yet between climate change and CO2 so your first excuse is null and void. The fact that you are so sure when the most brilliant minds of our planet are still in hot debate suggests you are the sort that is more comfortable believing what you want to believe as opposed to the truth.

The second excuse is just disgusting like a child begging for attention his parents can't give them because they are working far too many hours just to support their families. Seriously - you don't have to behave yourself because other people don't? Is that it? What we're five years old now?

Maybe Gore has achieved a greater level of mental dexterity than you. If by some expense we can reduce expenses further in the future than the endeavor is then worthwhile. Take for example a man buying some eggs at the market. If the man is hungry and needs the eggs to eat tonight he can simply go to the market and buy the eggs today and eat tonight however if he knows eggs will be half-price the next day and he can withstand the burden of being hungry for a night he might eat for two nights instead of one. This is basic higher order thinking and it truly astounds me how many people are not capable of it.

More astounding still is the volume of people who use ludicrously broken logic like like yours in an attempt to get attention. Your arguments have no weight, no support, and lack so much as a prosthetic leg to stand on.

Kefka Pelazzo

February 13, 2010 10:25 AM

While I don't disagree with the concept of flat drinks I do disagree with the suggestion that global warming is just a scam. Honestly I've become weary at hearing such claims put forth with zero evidence to back them up.

Climate change, global warming, whatever you want to call it is real. There is so much scientific evidence proving this now that the real argument amongst academics is whether or not man's activities actually contribute to global warming.

While there exists a deal of evidence arguing both sides the fact is that no clear conclusion can be drawn as yet between climate change and CO2 so your first excuse is null and void. The fact that you are so sure when the most brilliant minds of our planet are still in hot debate suggests you are the sort that is more comfortable believing what you want to believe as opposed to the truth.

The second excuse is just disgusting like a child begging for attention his parents can't give them because they are working far too many hours just to support their families. Seriously - you don't have to behave yourself because other people don't? Is that it? What we're five years old now?

Maybe Gore has achieved a greater level of mental dexterity than you. If by some expense we can reduce expenses further in the future than the endeavor is then worthwhile. Take for example a man buying some eggs at the market. If the man is hungry and needs the eggs to eat tonight he can simply go to the market and buy the eggs today and eat tonight however if he knows eggs will be half-price the next day and he can withstand the burden of being hungry for a night he might eat for two nights instead of one. This is basic higher order thinking and it truly astounds me how many people are not capable of it.

More astounding still is the volume of people who use ludicrously broken logic like like yours in an attempt to get attention. Your arguments have no weight, no support, and lack so much as a prosthetic leg to stand on.

OXYGEN

March 28, 2010 7:40 AM

Very insightful post. I agree with Strategery.

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