Q3 '24 Deep Dive
Fact or Fiction: Carbon Offset Initiatives
19
rad! more of this stuff please
0
not useful or interesting
6 minute read
The Quarterly Deep Dive series is designed to get you thinking and start a discussion. That’s it. This isn’t actionable intelligence; rather, valuable context on how our industry is evolving and what’s driving that evolution. If this blog isn’t somewhat instigatory, we’ve failed.
Introduction
As the owner of an agency for the past decade, I’ll just say it: consumer brands are terrible for the environment, and agencies aren’t much better.
Collectively, we enable a cycle of greenwashing where brands flood the market with intentionally vague, yet emotionally compelling commitments, and the end result is simply more revenue with no real carbon impact. In this six minute read, we’ll unpack the problem with ‘quick fix’ environmental initiatives, the intrinsic conflict of interest between brands and the environment, and the silver bullet for building a sustainability initiative with teeth. As with any problem/solution dynamic– from the buyer journey to the environment – the first step is awareness. This blog won’t give you answers, but it will get you thinking about solutions.
A recap:
As a brand stakeholder, some of this won’t be news. D2C companies are obsessed with positioning themselves as carbon-aware, and it makes perfect sense. In 2024, sustainability is a top shopper decision question. The premise isn’t complicated: if the consumer values sustainability, and the brand is positioned as carbon-aware, the consumer will trust the brand. The consumer that trusts your brand is cheaper to acquire, faster to convert, and more valuable as a long term advocate. (As we’ll see later, they’re also more apt to be deceived.)
So rather than actually reduce carbon-footprint, sustainability initiatives are usually designed to leverage the story of reducing carbon footprint to get consumers to consume more. It’s surface level, and more about checking the box than saving the plant.
It’s also why environmental initiatives are no-brainers – it’s usually as easy as clicking a few buttons, then adding a badge to the storefront. “Climate Neutral'' certifications and carbon offset programs are plug and play tools that deliver an easy win –checking the box for both brands and buyers. But do they actually work? From a revenue standpoint, 100% yes. But from a sustainability standpoint, the answer is generally no. Most environmental initiatives fail miserably in their purported goal. Angus Chapman and Desné Masie lay it out perfectly in this vox article, which is great morning coffee material. Here’s the 30-second overview:
Let’s say you run a D2C eCommerce business: the materials to manufacture your product, and the emissions to ship your product go into the atmosphere and heat the planet. On top of that, some component of your product and/or packaging likely ends up in a landfill. That’s incontrovertible. But offsetting carbon footprint encourages you to point at a forest and say, “I’m paying for those trees not to be burned, so now we’re even.” Of course, this does nothing whatsoever to solve the problem. The CO2 from your manufacturing is still warming the atmosphere. The chemicals from your product are still seeping into a mass landfill. Your shipping service is still polluting the air and ocean. At the end of the day, this environmental initiative simply lets you show balance on paper, and makes your buyer feel better about their purchase.
Carbon offsetting is a sly trick. It’s the easy way out, and it’s basically a wash. In a 2023 joint investigation by The Guardian, Die Zeit and SourceMaterial, journalists found that 90% of carbon credits issued by Verra (the world's largest certifier) are worthless. The largest result is actually counterproductive to the environment – but it’s what commerce wanted all along – more sales.
Conflict of interest
Consumer brands will always be at odds with the environment. That’s because the best possible outcome for the environment is for consumers to stop consuming – and this is simultaneously the worst possible outcome for brands.
There are exceptions of course – Patagonia and Cotopaxi, for example, have genuinely committed to reducing carbon footprint on a global scale, but that’s because their mission is carbon offset, and product revenue is simply a vehicle to get there. Chances are that your brand’s mission is profit, and that probably won’t change.
So if your goal is purely to make money, climate neutral certifications and carbon offset programs are great ways to solve for your buyer's SDQ. You get to look good, and use the story to make more money. But if the goal is actually carbon-impact, this presents a problem.
Perception is reality
Sustainability initiatives highlight one of the moFast fashion giant Quince is the poster-child for this sort of thing. Sustainability is at the core of almost all brand messaging – from the pre-purchase experience in consideration, to post purchase emails, and even physical collateral that arrives with the product. Quince has invested hundreds of thousands in shaping this narrative, and it’s almost entirely a lie. Dora Chi Zu at EcoCult NYC does a great write up in her column if you’re interested (or a Quince customer 😬)
By the numbers, Quince is lying, but do consumers care? Of course not! We frequently tell clients “perception is reality,” meaning that – more or less – the shopper believes what you tell them. This sphere of consumer behavior largely follows Truth-default theory (TDT), a communication theory which predicts humans’ ability to detect deception. The basic idea is this:
Humans believe what they see because they don't think of deception as a possibility. Brands have discovered that shoppers ignore evidence that they are being deceived when it’s presented alongside objective truths. Even if the shopper discovers they are being deceived, it is usually overshadowed by value propositions they care more about. In short: the shopper either suspects nothing, or suspects something, but looks the other way because they like the product or price.
The underlying theme in TDT is truth bias. As humans, we
Carbon offsets are the ultimate truth-bias example. We want to like Quince’s product: it’s high quality, comfortable, and a great price- all objective truths. So if they say it’s also sustainable why would we question it? If Quince is Climate Neutral certified, we feel even better… but that has little to do with their interest in sustainability or environmental impact. It’s simply a gimmick, and it works.
Now what?
So we've established:
- A: Consumers want brands that are environmentally conscious.
- B: Consumer brands are almost always bad for the environment.
- C: Consumers are likely to believe whatever the brand tells them.
So, Carbon offsets and Climate Neural certifications seem like the ultimate win win, until you consider one additional factor.
- D: The earth needs brands and consumers who are actually environmentally conscious.
It’s unlikely you’ll read this article and petition your leadership to stop manufacturing or shipping product – at least if you still want a job. But there are ways to deliver sustainability commitments that drive revenue and make an actual impact, and we believe they begin with giving the consumer joint ownership of the process.
We want to work with you to help shape this narrative – one based around real outcomes and giving your customer ownership in the process at the same time. Talk to us about how to connect sustainability and profit growth for the ultimate win-win. Here’s just one example to get you thinking. Use it, change it, or drop us a line. There’s lots more where that came from.
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In the light-speed world of eCommerce, opinions are the enemy of progress. Personal biases and unsubstantiated ideas lead to opinion soup and strategic quagmire. We explore how real-time data is crucial, not only to understand your customer, but for crafting brand-level initiatives. Then, see how the "5 why's" technique can help eliminate opinion-based initiatives for once and for all.
