The State of Green Business (SoGB) report for 2010 has been released, and as always it dedicates a section to marketing. The basic take-away from this year’s installment was not surprising. Number one, that there is a “great chasm of ignorance” on the part of US consumers around green terminology. And number two, that marketing green to consumers has to be built around this simple truth: they “want products that aren’t just greener, but better – that offer some kind of personal benefit, whether they’re cheaper to buy or own, have enhanced features or higher performance, are more convenient, less wasteful, healthier for their families, or simply cool”.

In other words: people are self-interested.

The full section is excerpted below:

It stands to reason that during a recession — with high unemployment, job insecurity and a dramatic upswing in foreclosures and bankruptcies — shoppers would stick to basics: tried-and-true, affordable products. If so, that would be bad news for most green products, with their unfamiliar brands and often premium prices.

But you wouldn’t know that from reading the polls. A succession of market research surveys during 2009 seemed gushingly optimistic about consumers’ willingness to embrace green shopping. Example: Four out of five people said they were still buying green products and services, even in the midst of the recession, according to a study by Opinion Research Corp. Another found that shoppers from São Paolo to Shanghai were ready to shell out more cash for eco-friendly products, even as the recession ate into their buying power. Indeed, a handful of surveys even claimed that consumers were willing to pay more for green products.

What in the name of Al Gore is going on?

It’s a complicated question, to be sure. Consumers, say the experts, are continuing to make green choices, but they’re being pickier than ever about doing so. As a result, green marketing, always a challenging proposition, has become all the more challenging.

One thing seems clear: Premium pricing for green is a non-starter for most shoppers. That’s expected when people are pinching pennies, euros and yen. And consumers’ willingness to make green choices seems more likely when there’s a personal benefit in addition to a planetary one. As such, there’s a growing appetite for products that can cut utility bills, like energy-efficient appliances and light bulbs.

Even still, there remains a great chasm of ignorance — “radical transparency” notwithstanding — that’s keeping consumers dazed and confused when they shop, and more than likely is tamping down interest in green purchases.

For example, one study found that while most consumers view “energy efficiency,” “smart energy” and “energy conservation” as positive concepts, few fully understand what those and other energy-related terms actually mean. Another survey found more Americans buying energy-efficient light bulbs, but the majority remain in the dark about the federally mandated phaseout of incandescent bulbs that starts in two years.

And then there’s the Snackwells Effect, named after the Nabisco cookies that are marketed as diet foods, being lower in fat or sugar than regular cookies. Studies found that people offset those low-cal benefits simply by eating more of the cookies — after all, they’re “healthier,” right? Similarly, studies have found that people lose 5 percent to 12 percent of the expected energy savings from efficient light bulbs because they leave them on longer, and 10 percent to 30 percent of the savings of efficient furnaces because they raise the thermostat. After all, they’re more efficient, right?

All of this has made green marketing far more perplexing than most marketers bargained for, requiring more complex and nuanced messages and value propositions. In reality, the proposition is probably rather simple: Consumers want products that aren’t just greener, but better — that offer some kind of personal benefit, whether they’re cheaper to buy or own, have enhanced features or higher performance, are more convenient, less wasteful, healthier for their families, or simply cool.

That message was driven home by analysts at GfK Roper, which for years has conducted regular “Green Gauge” consumer surveys. “What’s interesting is that when you look at and compare some of the attitudes and behaviors in the U.S. to other developed markets, the U.S. is actually more like a developing market in terms of the way they think and behave green,” Tim Kenyon, GfK Roper senior market analyst, told GreenBiz.com. “In a developing economy, there’s much more of a personal self-interest involved in making green purchasing choices, and less emphasis on the greater good,” similar to what Roper was seeing in the U.S.

American consumers, it seems, may have more in common with their counterparts in Chad, Chile and China than one might ever have imagined.

I had the pleasure of hearing Ray Anderson, CEO of Interface, at the recent Clean-tech Investor Summit. It’s always nice to get re-invigorated by a person who not only inspires through his efforts to create a better world, but who is also a great communicator. Ray is certainly both. After the event, friend Joel Makower and I were wondering out loud if there were any CEOs out there besides Ray who brought with them the same level of inspired thinking and concrete action in the realm of sustainability and cleantech. They are no doubt out there. I have some of my own thoughts, but I want your suggestions. I’m not looking for consultants (I’ve got nothing against them, being one myself). So to be clear: I’m looking for men and women who are on the frontlines of running big business who 1. are pushing the envelope when it comes to innovating through sustainability and 2. who are charismatic conveyors of how they are doing it. I think Bill Gates (albeit no longer a CEO), took himself out the running with his insulation is stupid rant this past week.

Feel free to comment here or make a suggestion on Twitter to @mrcleantech

Thanks.

Based on the rash of predictions for cleantech in 2010 from investors, consultants and media (see the full list at the end of this post), I’ve pulled together a “trend of trends” list below that attempts to synthesis the broader, over-arching themes. As always, I’m amazed that water isn’t on the top of every list, every year, although there are some positive signs on that front. So here are the 12 things that filtered to the top:

• Energy efficiency will have a big year, with buildings and information and communications technology (ICT) front and center (nice to see the “wow” factor over technologies like solar being tempered by the realization that there are a lot of cheaper ways to meet immediate goals for reducing emissions)
• Private investment will revive (with one prediction for a record-breaking year), but fears persist that the pending end of stimulus dollars will cast a long shadow over the market
• Differentiation – i.e. marketing – will increase in importance as we move from a technology-heavy phase to a commercialization-focused phase (something I’ve called attention to in the past).
• Consolidation and industry shake-out will accelerate, as will increased involvement of major corporates. Many VC-backed firms need an exit (especially in smart grid, solar and biofuels), so expect a few IPOs, but mostly M&A or failure as scale becomes more important and winners and losers emerge. And as the market grows and the issues being addressed become more complex, big multinationals with vested interests will try to play a larger role
• Smarter transportation – especially electrified – continues to gain traction, while next generation liquid fuels (cellulosic in particular) takes baby steps
• It’s more than energy, stupid. Land, water, rare earth metals, etc take more mind share as understanding grows  that the issues we face go beyond energy and carbon
• Importance of carbon measurement and management will increase, but folks seems pretty skeptical that even if climate legislation/treaties get enacted that they will be aggressive enough (some expect sector specific carbon regulation – i.e. aviation and shipping – instead of economy-wide measure  
• Distributed solutions continue to erode the power of centralized systems (in energy generation, building, transportation, etc)
• Some technologies expected to garner attention: Waste to energy, waste biomass, power storage, geothermal, aquaculture, ultracapacitors, desalinization, building materials, large-scale solar
• There is a lot of expectation around advancements and interest in upgrading the electric grid; although there was a warning to expect at least one major failure of a smart grid rollout (not to mention that people have been predicting an intelligent grid for many years)
• Standards gain a higher profile – whether building codes, water or carbon labeling, unified standards for the smart grid, etc, creating a clear marked playing field grows in importance, including communicating the rules to consumers as needed
• International competition to be the cleantech leader intensifies (again this is something I’ve written about in the past, so not really news in my opinion)

If you want to read for yourself, the various predictions I’ve pulled from are here: Energy stocks to watch from Seeking Alpha; Overall industry outlook from the Cleantech Group; Clean energy predictions from Deloitte; Two different VC perspectives, one from Lightspeed Venture Partners  and the other from Rob Day at Black Coral;  5 biggest hurdles from Earth2Tech; IT and corporate green from Greenmonk’s Tom Raftery; Green building trends from Earth2Tech;  Top 10 promises from cleantech companies from Cleantech Group; Smart grid from Earth2Tech.

Technologies and services that reduce natural resource consumption and emissions are the future of global growth, as well as the pathway to climate stabilization. In China alone, expectations are for a $1 trillion annual "cleantech" market by 2013.

We are now entering a transition phase in cleantech, with focus shifting from technology to market commercialization. The winning technologies will win in large part because of marketing and communications. In the case of cleantech, it's not enough as a marketer to be a good practitioner of marketing.

In a world of ever increasing sophistication and specialization, in-depth knowledge of key drivers is essential to success. That means a deep understanding of underlying technology, cultural perceptions, policy, and consumer and enterprise behavior.

Moreover, there is interconnectedness in cleantech that does not exist in other areas of the economy, which requires maintaining unusually high levels of visibility into multiple vertical industries. Here are six keys to success:

1. Think systems. One of the unique things about cleantech is that you can't effectively talk about what you're doing in a silo. It is all inter-related. If you do power storage, it relates to renewable energy and smart grid. If you do water, it's connected to energy. If you do biofuels, it impacts food, water and energy. Your point of view must be developed accordingly.

2. Market the solution, not the problem. There is enough fatigue out there already about the environmental problems we face. Be a face for the solution.

3. Be specific. Talking about "green jobs" or "renewable energy" is no longer enough and audiences are growing more skeptical about "greenwashing." Talk about "wind energy jobs" or "solar power." The more detail you provide, the more believable you become.

4. Drive sales by focusing on your customers' strategic priority. While it may be tempting to lead with the environmental benefits of your product or service, our research shows that compliance and cost/ROI take precedence. Take time to research your customers and understand their primary motivations. You can adapt your message (and channels of communication) accordingly and be far more impactful.

5. Be a policy wonk. Perhaps more than any other space, cleantech requires that you have your finger on the pulse of policy. Whether you are in clean energy, water, smart grid, biofuels or transportation – national and international policy will play a major role. Ignore engagement with policy-makers at your peril.

6. Go digital. Communications have moved online. Social media is the new currency. Find compelling content that can mobilize online communities and get traction for your brand. Ad spend and press releases are becoming less and less effective as the role of online search takes stories directly to individuals at the touch of a button. It can be very cost effective, too.

This first appeared in MediaPost's Marketing: green newsletter

New research from KRC Research commissioned by my company Weber Shandwick was released today and shows that poor communication from suppliers is impeding the growth of the cleantech market. The research, pulled from interviews with 400 senior purchasing decision-makers in the UK, Germany, Span and France, revealed that although 8 of 10 organizations in Europe have specific cleantech purchasing policies, two thirds indicate that cleantech companies are failing to get their message across – 29 percent said they currently receive no information at all from cleantech companies, 26 percent said information was insufficient, and 11 percent said that if they were receiving information that it was too complicated. Demand is there (60 percent of European organizations are placing the same level of importance on green procurement as they did before the economic downtown), but half of those interviewed perceive cost to be a barrier to making cleantech investments. The research also shows some interesting differences between the various markets. Take a look at the full report, and if you’re interested in learning more, let me know.

It is time to rethink the language we use to describe efforts to improve our relationship with the environment. Below are the four reasons I believe we have entered a Post-Green, Post-Sustainability Era, and need a new meme:

• Red or Black Only: A price on carbon – whether in the US through ACES or internationally through COP15 – means that the discussion by businesses about “going green” becomes no longer exceptional (“hey, look what we did”), it becomes merely a requirement. Sustainability moves from the realm of marketing to the realm of bean counting and execution. Compliance to a regulatory framework for emissions means carbon is either a business asset or a liability, both of which impact the bottom line. Result: “Green” is folded into what business has historically been about – finishing the year in the Red or in the Black (and hedging against future shifts in the new currency of carbon). Similarly, strict compliance guidelines such as RoHS and WEEE also mean that making products more recyclable or less toxic is also taken out of the realm of marketing.
• SustaINABILITY: Going into Copenhagen, the international discussion will officially shift from mitigating climate change to adapting to it. Species extinction, ocean acidification, the addition of 2.5 billion more people globally in the next 40 years are all clear signals of this shift. This trend represents a necessary shift in language. In the new world of adaptation, “green” and “sustainability” will be revealed for what they are: constructs that imply that by “going green” or touting “sustainable practices”, we are somehow going to end up with a world as we knew it. The fact, however, is that the only thing that will be sustained going forward is our penchant for being unsustainable. We are already in a world of adaptation, so talk of going green and sustaining is obsolete. Instead, what we’re looking at is “maybe, if we’re really lucky, we’ll be able to achieve some level of ecological health that resembles what used to be”. But who wants to hear that message? So people will still sell green, and unfortunately others will continue to believe it exists.
• “Y” Green is Yellowing: There is also a generational shift. This blurb from Matt Bai in a recent NYTimes piece sums it up nicely: “In a sense, the gay rights movement of an earlier era was so successful in changing social attitudes that the movement itself can now seem obsolete, in the same way that younger Americans who have grown up with the premise of environmentalism in their daily lives consider Greenpeace to be a kind of hippie anachronism.” Point taken.
• Green Splatter: As writers like Joe Romm and Felicity Barringer have recently pointed out, “green” and “renewable” have a troubling elasticity to them, which has stripped the terms of any real meaning. Similarly, Dr. Andrew Dent has pointed out that “green” is not quantifiable because the data set is not quantified. Moving forward, specificity of language will be required to give meaning to action, so expect to see references to specific attributes such as recyclability, non-toxicity, low VOC, etc. Besides specificity, transparency and authenticity around product claims are about to be thrust upon businesses, which will push people away from empty platitudes. In the US, the Federal Trade Commission is reviewing its guidelines for green marketing claims with the goal of developing metrics that can be quantified. It should be noted here, however, that even this is far from full-proof, since the issue will ultimately be enforcement. The USGBC’s LEED rating system is proof of that, having recently come under fire for fostering “LEED-washing” – instances in which buildings claim and are often awarded LEED status, but don’t actually deliver the results.

The shift in semantics has started. Bill McKibben, the author of the “Death of Nature” and recently back from a trip to Australia, said at a recent event in Seattle that ministers Down Under are considering no longer using the term “drought”. The reason: drought implies that there is a beginning and an end to a water shortage, when the reality is that water shortages (in Australia and increasingly in other locations) are now endemic. The Economist hosted an interesting debate recently in which Stanford professor David Victor argued that sustainable development is “intellectually bankrupt and should be abandoned”, in part because “its meaning has become fuzzier”. The person arguing for sustainability’s relevance, Peter Courtland Agre of Johns Hopkins Malaria Research Institute, believes we can achieve sustainability because he is optimistic people will discover activism and change their behavior. Unfortunately, work by psychotherapist Linda Buzzell and others undermines this Pollyanna belief by pointing out that people as a species “don't seem to be very good at understanding enormous, complex challenges like the ones we're presently facing, let alone processing our emotional responses to these threats and moving into action.” I agree, and as I’ve explained in earlier posts, this is why my work focuses on technologies that can provide a buffer between consumption and natural resources without behavioral change.    

I’m sure people will continue to use green and sustainable as an easy shorthand for things that are less harmful on the environment. But that will become disingenuous, if it hasn’t already. So what will take their place? The younger set have started searching for something more meaningful, although I’m not sure the term “Freen” does more than add another cool-sounding, but largely meaningless term to the existing lexicon of self-indulgence. Others have lobbied for using a nomenclature built on the notion of “blue”. Ultimately, none of these terms pass the smell  test. “Low carbon” is good, but carbon is simply one piece of the problem and solution, so it is insufficient. “Resource-sensitive” and “low-impact development” start to get at the issue, but are kludgy. “Beyond compliance” is too narrow. Whatever the answer, the reality is that the words we use to define our struggle for survival are badly in need of an update. If you have thoughts on the matter, post a comment or send me something pithy on Twitter @mrcleantech

(This post originally appeared on Triple Pundit)

Because of my work with PetroAlgae, SkyFuel, EarthTronics and other cleantech companies, it has become clear to me that the degree of success achieved by “new energy” technologies (wind, solar, biofuels, electric vehicles, etc) will in large part be the result of their ability to integrate into and leverage the existing, “mature energy” infrastructure. Whether it’s plug-in, drop-in, co-fire, bolt-on or some other term, it is these types of technology – which DO NOT require significant retooling of refineries, transmission, storage, etc – that will have the best chance to scale, and thereby win in the long-term. Exxon’s recent announcement to invest $600 million in algae is a good indicator of this trend. Similar to the discussion of gigaton scale in my last post, cleantech companies need to be thinking about this issue when developing their positioning and go-to-market strategy.

The Cleantech Law & Business Review has officially launched with the release of its first quarterly issue. The goal of the Review is to accelerate cleantech commercialization by addressing a current deficiency in the sector: the absence of a forum that has the ability to look holistically, and through expert eyes, at the opportunities and challenges of cleantech.  

The journal will be peer reviewed (the first such publication in cleantech) and solicit contributions from business, academic, policy and legal experts to address the most topical and strategic issues facing cleantech commercialization today. 

“We want people to start thinking more laterally, not in silos… because a one dimensional approach is a non-starter,” says managing editor Bill Pentland. “Understanding the problems is something that will determine the success of the solutions, and that requires a systems approach.”   

Existing cleantech publications are doing a good job of reporting on specific solutions. The Review hopes to take all of the pieces and fit them together. The publication will be supported by sponsorship and subscriptions. The inaugural issues was built around the theme of carbon offsets. Other issues this year will focus on water, renewable energy and climate change.

This is installment #1 of a regular update – short snippets of commentary – I’ll be doing on happenings related to cleantech marketing. It’s intended to be a smell test. So let’s clear those nostrils: 

• There’s talk of a new dot “eco” domain, with Al Gore attached as the celebrity. First, the last thing we need in the world is another web domain to manage (I’m still trying to get over the buzzkill from .biz). Second, the whole .eco thing will turn into a greenwashing tsunami before you can say Chevron. I can see it already – friendsofcoal.eco, monsantolovesmothernature.eco… the first one I would probably register would be a squatter site at puertor.eco. According to reports, the founders behind the domain plan to foil possible greenwashing by policing whether people deserve to have the dot or not (they use the term “filter”, but let’s just call it what it would be – a subjective value judgment, aka censorship, aka a non-starter). How about we spend our time doing something substantive instead? Gore is too polarizing for the dot eco thing to gain significant mainstream traction (one eco-leaning journalist recently told me that he’s sick and tired of hearing Gore give the same speech over and over, and even after all that Gore-speak people still don’t believe him). The idea behind the new dot – give 50% of profit to environmental causes – is a fine one, but the people who already own URLs at .com, .net, .org and whatever other dot could just as easily save their dot eco registration money and give 10 bucks a year to a good cause through Kiva, INVEST, Green Microfinance, Practical Action, Global Green and Global Giving. Conclusion: Marketing ploy that’s too clever by half, and ultimately a distraction. Besides, isn’t environmentalism dead?

• I confess I’m intrigued by the Virtual March that T. Boone Pickens’ organization has announced for early April. If 2 million people really do make their voices heard by policymakers in DC (by phone, email and yes, even something called “fax”) then how bad can that be, right? But I question the whole motivation of Pickens himself. Is it merely coincidence that two central components of the Pickens plan for planetary salvation – wind power and natural gas – just happen to be two of his major areas of investment? Further more, natural gas is just as much in the control of the Middle East and Central Asia as oil (more than two-thirds of world proved reserves). Why replace one foreign addiction with another? Conclusion: I enlisted in the “army”, but I’m pretty sure Congress is only paying attention to the bazillion lobbyists now lurking around every corner of DC (including Pickens) looking for stimulus money.

• GE’s ecomagination has pulled together an interactive campaign to help people visualize the Smart Grid through an “augmented reality” digital hologram. (Reality is enough for me as is thanks, I don’t need it augmented). But give GE credit for experimenting with something new and different. Unfortunately, I only got as far as the five-part instructions that began with a requirement to print a “Solar Panel Marker” (a what?). Instead, I watched an accompanying video that “shows how it works”. Looks cool. Conclusion: Good if you have 45 minutes in a 6^th grade science class. Bad if you are a working stiff like me with two kids that want to go outside and play. Also, need to tone the geek speak way down. 

If you have ideas for other issues to explore, send me a note on Twitter @mrcleantech

According to the State of Green Business 2009 released today, consumers aren’t buying it when it comes to corporate green marketing. The most damning excerpt of the report’s section on marketing cites a Brandchannel.com report that found readers could think of not one brand that was “truly green or going green”. Nice try ecomagination! I guess we’ll have to see if GE’s Super Bowl ads on its smart grid business make any difference in perception. In the meantime, the federal government is also doing its part by refreshing rules governing green marketing claims. The rules are badly needed. As is evident from the SOGB report, it’s still possible to build practically any argument for or against green marketing depending on the data/research you use. We need standards. Here’s the section on green marketing from the report:  

A rise in green marketing efforts has been matched by a nearly equal rise in claims of greenwashing by activists, bloggers, and others. Increased concerns about energy, climate, toxics, and other environmental issues have led some of the largest consumer brands to enter the green marketplace, prodded by retailers such as Wal-Mart, which has been pushing suppliers to offer affordable green products. But with the new players and products has come a new wave of claims about greenwashing, or at least public frustration that companies aren’t doing enough, aren’t telling their stories well, or both. 

Green claims have continued to grow. An Earth Day report revealed that 2007 saw the largest number of green trademark applications since 2000, according to the U.S. Patent and Trademark Office: More than 300,000 applications for green brand names, logos, and tag lines. Companies like Apple, Canon, Clorox, and Fiji Water entered the green marketplace for the first time, raising awareness — but also questions and, sometimes, controversy. Given the lack of definitions, just about anything can be claimed as “green” — or “greenwash” — further muddying the waters. 

One problem is that consumers are ambivalent at best about shopping green. They claim they want to, but they also say that they don’t trust companies. For example, surveys show that the number of people concerned about climate change continues to grow, and that consumers believe businesses should bear the heaviest load in addressing it, but they aren’t convinced that the business sector is doing as much as it should. Marketers aiming to shift their audiences toward making greener purchasing decisions are coming up short for the vast majority of the population, although a small subset is green enough to helpspread the environmental awareness on their own, according to one study. Although about half of those in another survey said they trust companies to be truthful in their environmental marketing and believe companies are accurately presenting information about their impact on the earth, nearly 60 percent would like to see more government regulation of green claims to ensure they are accurate. Given the Federal Trade Commission’s review of green marketing claims launched last year, they just might get it. 

The upshot is that despite the continued upswing in green business activity, there’s no concomitant rise in consumer awareness or trust. Case in point: With no prompting, nearly half of all respondents to one survey were essentially unable to name a single feature of a green home — not solar power, compact fluorescent light bulbs, home recycling, or Energy Star-labeled appliances. And when readers of Brandchannel.com were asked what brand they think of as truly green or going green, the top answer: none at all.