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Posts Tagged ‘McKinsey’

McKinsey just released a must read for green marketers. ‘Helping Green Products Grow‘ outlines five steps businesses need to take to sell green products successfully. Most of it is common sense. Still there were a few surprises, most notably in the area of consumers’ awareness of most concrete actions to reduce global warming:

These findings present enormous educational opportunities, not just for green marketers, but also for environmental educators, hoping to make a difference in greenhouse gas emissions. Bloggers, journalists, teachers, environmentalists need to turn up the volume on eating less beef, improving home insulation, and driving more fuel-efficient car, less often. These are all concrete actions that citizens can understand, and that also can help them save money, particularly during these hard economic times.  

Here are the five steps, with selected some highlights:

1. Educate consumers:

Because consumers are largely unaware of green products, a business that sells them must see itself first as an educator, not a sales machine. Our study shows that more than one-third of the consumers who want to help mitigate climate change don’t really know how . . .

2. Build better products:  

Consumers will not think better of green products until companies make them equal to, or better than, their conventional alternatives. It’s no surprise: most people value performance, reliability, and durability much more than ecological soundness. . . .

3. Be honest:

To rebuild public trust, companies must come clean about the true environmental impact of their products and their attempts to reduce it, and many will need to address historical concerns about specific products or operations . . .

4. Offer more:

Companies must ensure that consumers understand the financial and environmental returns on their investment in green products, for they are more willing to try new ones-especially those that cost more-when they find it easy to track the savings . . .

5. Bring products to the people:

Having decided to buy green products, many consumers encounter a last hurdle-finding them-either because manufacturers don’t keep up with demand or advertise where they can be bought, or because wholesalers and retailers don’t stock them or display them prominently. Biofuel enthusiasts, for example, must often drive out of their way to fill up . . .

I will end with my usual rant. Buying green stuff is good as long as it translates in net carbon reduction. Otherwise, we are all better off following the old conservation adage of, ‘reduce, re-use, recycle‘. 

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Yesterday, I wrote with a sense of urgency, about the need for Americans to start questioning their materialistic excesses. And I advocated in no uncertain terms, for a shift in individual behaviors. Not everybody agrees. Last month I attended an E2 presentation by Rick Duke, Director of Center for Innovation at NRDC, and also ex-McKinsey consultant. The topic was a recent McKinsey report on ‘Reducing U.S. Greenhouse Gas Emissions: How Much at What Cost?‘. The ground-breaking study was co-sponsored by a group of environmental and corporate heavy weights: NRDC, DTE Energy, Environmental Defense, Honeywell, National Grid, PG&E, and Shell. From E2:

Rick Duke followed by presenting McKinsey’s findings, which showed that the U.S. can cost-effectively address global warming – doing our part to avoid potential adverse climate impacts estimated to range as high as 20 percent of GDP – if we act immediately and comprehensively to start redirecting capital from old polluting infrastructure to clean solutions. Building, vehicle and appliance efficiency will play a critical role – generating net economic benefits that roughly pay for more expensive measures needed to clean up energy supply. Lastly, Rick emphasized that to enable businesses to scale up solutions, we urgently need three kinds of policy innovation: 1) measures to overcome non-price barriers to energy efficiency, e.g. smart regulation to ensure utilities can profit from delivering efficiency; 2) an effective cap on carbon emissions that puts a price on greenhouse gas pollution; and 3) incentives to develop and deploy emerging low-carbon solutions.

What the E2 summary does not cover, is the point Rick Duke made during his presentation about Americans not needing to make sacrifices in their way of life. This assumes the U.S. implement the policies recommended in the McKinsey report. The sigh of relief in the audience was palpable. You mean, I can keep going. The powers in charge will take care of things? Peter Waldman, also present during the presentation, protested that policy innovation was no substitute for some of the hard choices citizens ought to make. Choices such as driving less and consuming less.

Rick Duke‘s answer: sure, it’s great if people green their lifestyles, but what are the odds? In the mean time, let us forge ahead with policy innovation. I agree with him, and I also want to point the danger of his concurrent message. We cannot afford the luxury of ignoring the role of individual behaviors. It will take all, policy makers, businesses, and citizens, to reach a carbon neutral state.

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