The risks and rewards of placing social purpose at a brand’s core

A new breed of brands is entering the market with one thing in common – a very clear social purpose at their core from the outset. But when it comes to marketing, simply pulling on consumers’ heartstrings won’t cut it.

In 2017, the idea of exchanging money for a product and then just moving on feels outdated, with modern consumers equally expecting to have supported a measurable social cause with their hard earned cash.

In fact, major players such as Unilever are reshaping their entire business around this sentiment, with promising results. The FMCG giant’s latest figures show its ‘Sustainable Living’ brands, such as Ben & Jerry’s and Dove, grew 50% faster than the rest of the business in 2016. These brands now account for 60% of total sales growth, up from 46% in 2015.

And this growth looks to have inspired everybody from Tesco to M&S to shape new advertising campaigns around initiatives such as reducing food waste.

This sentiment is also filtering down to start-ups, with new brands eager to link their profits with a strong social purpose from the outset.

How to get started

Entrepreneur Jak Haines is the founder of Vavven, an online Australian sex toy business, which boasts the memorable slogan ‘Creating philanthropists through orgasms’. Although it sells internationally, it is currently looking for more partners to expand its distribution.

Vavven, one of Marketing Week’s 100 Disruptive Brands 2017, donates one-third of its profits to non-government organisations (NGOs), such as charity The Unmentionables, which champions sexual and reproductive health and rights (SRHR) for female refugees. The brand also screens all of its manufacturers to ensure they provide their employees with the living wage and adhere to strict quality and safety standards.

Haines says the key to getting a social purpose brand off the ground is to ensure you’re doing something that will generate passionate conversation and debate.

“Facebook allows a condom company to advertise but they won’t let me advertise a pleasure toy for exercising the pelvic floor, even though 50% of women suffer pelvic prolapse after pregnancy. Sex is still such a taboo in society and I saw an opportunity to really break that barrier down and get people talking,” she explains.

“I really did my research and analysed what made the major players – such as Ann Summers – profitable then thought how I could apply something truly original to that model. The sex toy industry is still completely unregulated so selling only ethically manufactured toys felt like the right thing to do.”

Communicating a clear message and story

High-end watch brand Vitae London also saw an opportunity to drive change for its respective industry. Founder Will Adoasi was inspired by the story of his father, who grew up in Ghana and became the first in the family line to learn how to read and write.

“He broke a cycle of poverty that stretched back for decades,” Adoasi says. “I thought, the global luxury watch industry is worth something like $35bn (£28bn) so why hasn’t anyone started to give some of those profits back to poorer communities?”

Rather than just “tagging on” a social purpose message and then quoting numbers to consumers, Adoasi claims his research shows Brits are more receptive to tangible and measurable evidence of the causes they are donating to.

Subsequently, each watch purchased from Vitae’s classic range of watches supplies a child in South Africa with two sets of a school uniform, a bag and footwear to see them through the year.

“Just pulling on someone’s heart strings and saying some of the money will go to a good cause is not enough,” he explains. “You need your own niche and clarity of what that is is super important. We’ve had endorsements from Sir Richard Branson and we’re looking to launch an exclusive line with pop singer Emeli Sandé. Without a clear message I’m not sure either would have happened.”

Fighting against pitfalls

However, launching businesses that donates income to worthy causes, while admirable, can also be costly given profitability often takes a considerable time to achieve.

Jennifer Georgeson is the founder of So Just Shop, which supports women-led artisan fashion businesses in undeveloped countries and gives them a platform to sell through. Her ambition is to have over 1,500 independent sellers on her books, which she believes can potentially drive up to 250,000 women out of poverty.

Yet, she concedes: “We’ve only been properly selling for one year so our profits are lower than £50,000 at the moment. If you get into this line of work, you’re not going to make the big bucks straight away though.

“You have to really believe in your idea and believe it will pay off in the long run, these aren’t short-term business models. I’m confident I can make this a £100m business but that won’t happen overnight.”

Vitae’s Adoasi has ambitions to generate £200m in turnover, but admits he’s had to sacrifice personal wealth by launching the company. “I used to live a life where I made loads of money in the city, but there was no social cause. I’d rather make less money knowing I can transform people’s lives. That isn’t to say our sales aren’t good, because they are, but you have to be able to understand it’s deeper than that. The consumers will figure you out if your sole underlying mission is to make money.”

Communicating a social message can also be difficult, with the aims and objectives of giving back to communities or incorporating complex sustainable supply chains often complex and hard to explain.

For Alex Wright, the co-founder of Dash Water, which uses ‘wonky’ fruit and vegetables that would otherwise go to waste in its flavoured waters, packaging can be the key to solving this issue.

“On our front of pack we try to hero the word wonky. We make it an unusual word for consumers to pick up on opposed to something like ‘made using surplus fruit and veg’ which would be boring. It’s also made obvious we work with food waste charities such as Feedback,” adds Wright.

“You have to educate consumers in a clear way about what is going on and hope they will do something about it. It’s challenging to make them pick up on the message straight away, but achieving good branding is never going to be easy whatever sector you are in. It’s a nice challenge.”

In the latest ranking of the top 100 brands for social purpose by consultancy Radley Yeldar, 28 brands from the 2015 list have lost their places. Four of 2015’s top 10 also saw significant drops.

Many of these were high-profile businesses, with Johnson & Johnson, Volkswagen, Orange, Apple, Samsung, WPP, JPMorgan, Diageo and Carrefour among the casualties.

But despite these disappointing numbers, So Just Shop’s Georgeson insists there has been a “permanent shift” in what consumers now expect from brands. She says any brands that don’t consider social purpose “for the long-term” will ultimately fail. It effect, it isn’t something you can dip in and out of.

She concludes: “Let’s take fashion; the way it works right now just isn’t sustainable. It is too polluting, it is appalling how little the workforce is being paid to produce such a high volume of products and human trafficking exists within the supply chains of major high-street brands.

“We exist because consumers want something to be done about this. I don’t think there is any blip in that need for action. This new mentality is a permanent shift.”

Source: marketingweek.com; 13 Jun 2017

‘INFLECTION POINT’: Renewables will be the ‘cheapest form of new power generation’ by 2020

Renewable energy sources, like solar and wind, are quickly becoming as cheap-even cheaper-than their carbon-intensive counterparts like coal.

New research from Morgan Stanley estimates that renewables will be the cheapest source of power in the world in less than three years.

“Numerous key markets recently reached an inflection point where renewables have become the cheapest form of new power generation,” the bank said in a note.

“A dynamic we see spreading to nearly every country we cover by 2020. The price of solar panels has fallen 50% in less than two years (2016-17).”

Even if President Trump succeeds in withdrawing the US from the 2015 Paris climate agreement, the country could still cut more emissions than it had previously pledged to alongside 194 other countries.

“For example, notwithstanding President Trump’s stated intention to withdraw the US from the Paris Agreement, we expect the US to exceed the Paris commitment of a 26-28% reduction in US 2005-level carbon emissions by 2025,” the bank said.

What’s behind the sudden drop in renewable costs?

Wind turbine blade lengths have increased dramatically in recent years thanks to stronger materials and design. Even a small lengthening of the windmill blades can increase output exponentially, as the “swept area” is a function of the square of the turbine’s radius. Remember that high school geometry?

On the solar front, Morgan Stanley says there has been oversupply of solar panels, which is pushing production prices down. Solar installation grew 50% last year, but capacity is still 28% above installations.

The bank sees two possible benefits (beyond helping the environment) for utility companies that invest in low-cost renewables:

“First, the ability to lower customer bills from utilizing low-cost renewables can improve utilities’ regulatory environment and provide related investment opportunities in grid modernization initiatives,” writes the bank.

“Second, for utilities with large, competitive renewable development businesses, investment in renewable energy projects can generate attractive risk-adjusted returns.”

Source: businessinsider.my; 8 July 2017

Three game changers for energy

New sources, mobility, and industry fragmentation are set to disrupt the system.

Change is afoot in the energy system. Soaring demand in emerging markets, new energy sources, and the likely growth of electric vehicles (EVs) are just some of the elements disrupting the status quo. It is hard to discern how the aftershocks will affect the extraordinarily complex network of sectors and stakeholders. New research by McKinsey and the World Economic Forum has identified the game changers for companies and policy makers, as well as their implications.

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Source: mckinsey.com; April 2017

Battery storage: The next disruptive technology in the power sector

Low-cost storage could transform the power landscape. The implications are profound.

Storage prices are dropping much faster than anyone expected, due to the growing market for consumer electronics and demand for electric vehicles (EVs). Major players in Asia, Europe, and the United States are all scaling up lithium-ion manufacturing to serve EV and other power applications. No surprise, then, that battery-pack costs are down to less than $230 per kilowatt-hour in 2016, compared with almost $1,000 per kilowatt-hour in 2010.

McKinsey research has found that storage is already economical for many commercial customers to reduce their peak consumption levels. At today’s lower prices, storage is starting to play a broader role in energy markets, moving from niche uses such as grid balancing to broader ones such as replacing conventional power generators for reliability, providing power-quality services, and supporting renewables integration.

Further, given regulatory changes to pare back incentives for solar in many markets, the idea of combining solar with storage to enable households to make and consume their own power on demand, instead of exporting power to the grid, is beginning to be an attractive opportunity for customers (sometimes referred to as partial grid defection). We believe these markets will continue to expand, creating a significant challenge for utilities faced with flat or declining customer demand. Eventually, combining solar with storage and a small electrical generator (known as full grid defection) will make economic sense—in a matter of years, not decades, for some customers in high-cost markets.

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Source: McKinsey & Company; June 2017

ExxonMobil inspires girls to pursue STEM careers

girl_engineer

ExxonMobil is encouraging girls to consider science, technology, engineering and math (STEM) careers through the 12th-annual Introduce a Girl to Engineering Day program to be held at 14 ExxonMobil and XTO Energy sites nationwide over the next several months.

Building on the success of ExxonMobil’s recent ‘Be An Engineer’ efforts, more than 2000 middle-school girls across the country will participate. Students will have the opportunity to work with ExxonMobil employees who will serve as mentors, providing students with role models and helping to sharpen their STEM skills. The programs will include a wide range of hands-on activities, such as demonstrating the energy industry’s use of 3D technology to search for oil and natural gas; water purification experiments; and exploring the science of manufacturing cosmetics.

Attracting more young people, and particularly girls, to math and science studies, and ultimately STEM careers, is critical to ensuring the growing technological needs of the United States can be met. According to the 2013 Economic and Statistics Administration Report, women comprise half of the US workforce, but hold less than 25 percent of STEM jobs and only 14 percent of engineering positions.

In addition to Introduce a Girl to Engineering Day, ExxonMobil is heading a social media effort to promote ‘Be An Engineer’ as part of its Engineers Week activities. Various universities and associations will join the social conversation (#BeAnEngineer) to shine a light on the contributions of engineers to making the world a better place.

“Providing access to female professionals in STEM careers inspires girls to consider pursuing the field,” said Suzanne McCarron, general manager of public and government affairs, ExxonMobil. “Through our ‘Be An Engineer’ and Engineers Week efforts, ExxonMobil hopes to engage students early in their education and expose them to the exciting and rewarding aspects of a career that drives innovation.”

Launched in 2014, ‘Be An Engineer’ highlights real-life engineers behind some of the world’s greatest technical achievements and provides resources to encourage students to choose engineering careers. The BeAnEngineer.com web site includes detailed first-person accounts of engineers who are researching, exploring and taking on many of the world’s toughest challenges. Since its launch, the effort has generated more than 19 million online engagements; the campaign won the 2014 Ragan PR Daily CSR award for cause marketing. Additionally, a series of blog posts featuring ExxonMobil engineers speaking about the profession will be featured on Huffington Post.

Since ExxonMobil began its “Introduce a Girl to Engineering” program more than a decade ago, more than 11,000 students have participated in activities conducted at company facilities or classroom demonstrations.

Source:  OilOnline Press; 25 February 2015

Shell unveils first soccer field powered by players’ footsteps

shell soccer

Shell and Brazilian soccer player Pelé this week showcased a first-of-its-kind soccer field capable of capturing kinetic energy created by players’ movement and combining it with nearby solar power to generate renewable electricity.

Located in the heart of Morro da Mineira, a Rio de Janeiro favela, the soccer field uses 200 high-tech, underground tiles that capture kinetic energy created by the movement of the players. The energy is then stored and combined with the power generated by solar panels next to the field to convert into renewable electricity for the new floodlights, giving everyone in the favela a safe and secure community space at night.

Until it was redeveloped by Shell, the soccer field was largely unusable and many young people were forced to play in the streets. The Morro da Mineira project shows how creative ideas delivered through committed partnerships can shape neighborhoods and transform communities.

The project is part of the Shell #makethefuture program, which aims to inspire young people and entrepreneurs to look at science and engineering as a career choice, and in particular use their minds to develop energy solutions for the future of the planet. The kinetic technology used at the soccer field was developed by a grant recipient of the UK Shell LiveWIRE, which serves as a catalyst for young entrepreneurs and students to develop enterprising ideas into viable and sustainable businesses.

A company called Pavegen has developed a similar kinetic technology, which uses tiles to harness the kinetic energy of footsteps. In January, the company unveiled a project at the Simon Langton Grammar School for Boys in Kent, England — where 24 tiles, covering 12 meters of a corridor, captures and converts kinetic energy from students’ footsteps into a sustainable energy source. Every time a Pavegen tile is stepped on, kinetic energy is converted into electricity, which lights an LED on the surface of the tile, as well as helping to light the area.

Another energy generating technology you can trample on is being developed by an Idaho couple — a modular paving system of solar panels that can be installed on roads, parking lots, driveways, sidewalks, bike paths, as well as playgrounds, to generate electricity to power homes and businesses connected via driveways and parking lots.

Source: Sustainablebrands.com; 12 Sept 2014