Story 51. Brand Activism, the Next Stage of Branding

Christian Sarkar and I decided to write an article on “brand activism” and we published it in the Huffington Post, January 9, 2017.  I have shortened the version here but more can be read in The Marketing Journal www.marketingjournal.org.

 

Historically, most brands have been marketed on their performance characteristics. “Our toothpaste is better than yours.” We’re better at “whitening teeth,” “preventing cavities,” or giving you “fresh breath.” Positioning is the name of the game in brand marketing.  But positioning is no longer enough in our highly competitive markets. Just consider marketing to millennials, one of today’s largest demographic groups. Millennials have high expectations for brands. Millennials live in a world filled with constant problems – air pollution, bad drinking water, crimes. Many would like brands to show concern not just for profits but for the communities they serve, and the world we live in.  In fact, more and more, we see a yearning for jobs that have a higher meaning than profit-making.

The Body Shop was one of the first companies to broadcast its ethical values and beliefs. Its founder and CEO, Anita Roddick, not only wanted to make really fine skincare lotions but also care for “animal rights,” “civil rights,” “fair trade,” and “environmental protection.” Many Body Shop clients said they were mainly interested in her products but many more approved of her activism and often gathered to march together for the causes they shared.

So what is brand activism? Wikipedia tells us:

“Activism consists of efforts to promote, impede, or direct social, political, economic, and/or environmental reform or stasis with the desire to make improvements in society. Forms of activism range from writing letters to newspapers or to politicians, political campaigning, economic activism such as boycotts or preferentially patronizing businesses, rallies, street marches, strikes, sit-ins, and hunger strikes.”

Brand activism can be regressive or progressive. The poster-child for regressive activism is Big Tobacco that for so many years denied the harm their products did to consumers.  They promoted the “virtues” of smoking in a way that actually hurt consumers by leading to a higher incidence of heart attacks and cancer.

On the progressive activism side, we see more companies seeking to have an impact on the biggest societal problems. These companies have a larger purpose than simple profit-seeking, and they are increasingly seen as leaders in their fields.

Harvard Business Review’s 2015 ranking of the Best- Performing CEOs in the World was surprising to many. The world’s top-performing CEO isn’t a household name. Lars Rebien Sørensen, the CEO of Novo Nordisk – the Danish pharmaceutical company that was ranked #1 – says: “Corporate social responsibility is nothing but maximizing the value of your company over a long period. In the long term, social and environmental issues become financial issues.”

The rankings weigh long-term financial results at 80% and ESG (environmental, social, and governance) performance at 20%. On the basis of purely financial metrics, Amazon’s Jeff Bezos leads all other CEOs, but Amazon’s relatively weak ESG score places him at #87 overall.

When did brand activism become a thing? It’s a natural evolution of the Corporate Social Responsibility (CSR) and Environmental, Social and Governance (ESG) programs that are transforming companies across the world. Previous efforts were identified as marketing-driven and corporate driven initiatives.

Brand activism emerges as a values-driven agenda for ompanies that care about the future of society and the planet’s health. The underlying force for progress is a sense of justice and fairness for all.

 

The Domains of Brand Activism

So what domains come under the umbrella of brand activism?  We identify six areas that will be familiar to all:

  • Social activismincludes areas such as equality – gender, LGBT, race, age, etc. It also includes societal and community issues such as education, school funding, etc.
  • Legal activismdeals with the laws and policies that impact companies, such as tax, workplace, and employment laws.
  • Business activismis about governance – corporate organization, CEO pay, worker compensation, labor and union relations, governance, etc.
  • Economic activismmay include minimum wage and tax policies that impact income inequality and redistribution of wealth.
  • Political activismcovers lobbying, voting, voting rights, and policy (gerrymandering, campaign finance, etc).
  • Environmental activismdeals with conservation, environmental, land-use, air and water pollution laws and policies.

 

Brand Activism Scorecard

These six domains of brand activism can be combined to create a brand activism scorecard to measure the extent of firm’s commitment to the issues.

Different industries have different norms, but even within industries such as oil and gas, for example, there will be leaders and laggards in each domain. It would be an interesting and meaningful exercise to measure and rank all businesses by industry with clear indicators of where they stand. It might be even more interesting to measure their long term success in the market as well.

 

Brand Activist Businesses

Let’s look at a few examples of companies that are taking brand activism to new heights. These are brand-activist leaders in a field that is growing rapidly.

 

Patagonia

Patagonia is proud of its conservation ethics. Patagonia wants you to use and reuse your clothing items and eventually give it away to someone else who can use it. But their commitment to social and environmental justice goes a lot further:

  • $10 Million For the Planet– On Black Friday, Patagonia donated 100% of sales to grassroots organizations working to create positive change for the planet in their own backyards. They state: “In these divisive times, protecting what we all hold in common is more important than ever before.”
  • radically///resourceful– 100% recycled down, polyester and wool. This season Patagonia introduces a new line called re\\\collection—styles made with all sorts of recycled materials, including 100% recycled down, 100% recycled wool and 100% recycled polyester with 85% recycled polyester labels, 80% recycled zippers and 50% recycled buttons.
  • Fair Trade– Patagonia pays a premium for every Fair Trade Certified item that carries their label. That extra money goes directly to the workers at the factory, and they decide how to spend it. The program also promotes the workers health, safety, social and environmental compliance, and encourages dialog between workers and management.
  • Regenerative Organic Agriculture– Patagonia is working to incorporate regenerative organic practices into its supply chain—and work collaboratively with other companies and organizations to further this important work.

 

Unilever

Here is the powerful values-driven statement by CEO Paul Pohlman of Unilever:

“A year after they were launched it is clear that the UN’s Sustainable Development Goals to end extreme poverty, fight inequality and tackle climate change are needed more than ever. That is why we have put them at the heart of Unilever’s own model.”

Unilever’s vision is to grow the business, whilst decoupling their environmental footprint from their growth and increasing their positive social impact. The Unilever Sustainable Living Plan sets stretching targets, including how they source raw materials and how consumers use their brands. Faced with the challenge of climate change and the need for human development, Unilever wants to move towards a world where everyone can live well and within the natural limits of the planet. Their purpose is “to make sustainable living commonplace.”  The plan covers three key areas:

  • Improving Health and Well-being
  • Reducing Environmental Impact
  • Enhancing Livelihoods

Unilever also co-developed a Circular Business Model, or CBM, that aims to link up all material flows in an infinite process circle in order to use resources most efficiently and ideally don’t create any waste. Through this circular approach, the sustainability of a whole business network can be driven. CBMs are useful for translating products and services designed for reuse into attractive value propositions.

 

 Ben and Jerry’s

In 1988, Ben & Jerry’s was one of the first companies in the world to place a social mission in equal importance to its product and economic missions. Ben & Jerry’s operates on a three-part mission that aims to create linked prosperity for everyone that’s connected to the business: suppliers, employees, farmers, franchisees, customers, and neighbors alike.

Since being acquired as a separate division of Unilever, Ben & Jerry’s has grown and now has a unifying set of principles and criteria on which to evaluate socially responsible businesses, it’s called the “B Corp” movement (or Benefit Corporation movement). Certified B Corps satisfy a rigorous set of standards to achieve certification. Ben and Jerry’s became the first-ever wholly-owned subsidiary to gain B Corp Certification.

Specific activist issues supported by Ben and Jerry’s include: DemocracyClimate JusticeGMO LabelingLGBT Equality, overturning Citizen’s UnitedFairtrade, opposing rGBH, and Peace Building.

In 2016, Ben and Jerry’s publicly announced their support for Black Lives Matter and opposition to systemic racism.  In many ways Ben and Jerry’s is a justice-brand – taking a stand for social issues most businesses avoid by design.

 

Seventh Generation

Seventh Generation, another Unilever subsidiary, is also B-Corp and a mission-driven company.  The mission – to inspire a consumer revolution that nurtures the health of the next seven generations – is based on the Great Law of the Iroquois – which holds it appropriate to think seven generations ahead (about 140 years into the future) and decide whether the decisions they make today would benefit their children seven generations into the future.

Seventh Generation is also leading a campaign to reduce the exposure to toxic chemicals that impact human health. Despite the recent passage of the Frank R. Lautenberg Chemical Safety for the 21st Century Act, Seventh Generation feels the law does not go far enough:

Many of chemicals in products we use in our homes and around our families are not listed on the label. That’s why we’ve redirected our passion prioritizing your right to know what’s in the products you buy. In January, we hosted a rally of mothers, janitorial workers, NGO’s and progressive business on the Statehouse steps in California, kicking off our #comeclean campaign calling on legislators to require cleaning products to fully list ingredients they contain on their label and online. 

 

Becoming a Brand Activist

Our economic system of Capitalism is both praiseworthy and blameworthy at the same time. We need to acknowledge that worldwide Capitalism has lifted many out of extreme poverty. But almost half the world — over three billion people — still live on less than $2.50 a day. While we have seen substantial worldwide growth in basic education and literacy and health systems, there is much to be done. Capitalism is also blameworthy. There is no justification for 62 persons in the world owning as much wealth as half of the rest of the world. Our companies have historically practiced “pirate” Capitalism that aims at making the rich richer.

Peter Drucker, in his early writings, saw companies not as our oppressors but more as our possible saviors. He developed the idea of management as a science. Companies would be run by enlightened managers who pursued profitability and sustainability and rewarded all the stakeholders. Drucker saw business management and unions working together as our bulwark against instability – both fascism and communism. He saw companies not as our threat but as our salvation.

This can’t happen unless more of our companies go through a transformation. CEOs must become servant-leaders, not emperors. Workers need to be represented on the company’s Board of Directors, as in Germany. Companies must formulate a set of principles and values to guide their behavior.  Much of the answer now lies in whether more of our companies can adopt a new set of values that go beyond just making profits for their stockholders and managers.

The evolution of brand activism in business is an opportunity for differentiation and purpose-driven engagement.  The aim should not only be “profit maximization” that primarily addresses the interests of the investors. The aim should be “stakeholder optimization” where all the parties contributing to the success of the company are well-rewarded.

Will companies embrace brand activism?  Elsie Maio, a leading Business Values guru, helps companies undertaking a process of soul branding or spiritual awakening. We see this happening in a handful of companies around the world.

A company that wants to be a brand activist must ask:

  • What kinds and how many consumers are likely to care about our company’s level and type of activism?
  • Will consumers believe that our company authentically and passionately believes in the cause(s) we support?
  • Will the cost of implementation require us to raise our prices? Will our consumers be willing to pay a little more?
  • Does the governance structure and executive leadership understand how and why brand activism makes a difference?
  • How does our activism make us a workplace of meaningto engage and inspire our employees?

Also needed is a way to recognize and award those companies that practice sustainable, stakeholder-oriented business management. We need to set up a Brand Activist Award for Business and each year cite and award certain companies as being leaders in brand activism. Our hope is that more buyers will make their purchases from activist brands, in recognition of their enlightened business practices.