Smart Companies Stay Ahead Of Green Trends

August 28, 2008

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Greenwashing claims, like accusations against Innocent Smoothies and criticisms against companies such as Samsung for not taking enough “green” actions, may have deterred companies from future efforts to be environmentally friendly, but David Wigder writes on Harvard Business’s Leading Green that “though change may be difficult, companies should work diligently to understand and adapt to changes in the market, particularly when it comes to green.”

Wigder says that companies who fail to keep pace with rapid changing market dynamics may see their brands undermined.

Take GM’s Hummer for example, once a hot item, it’s now rumored to be up for sale because the company failed to anticipate soaring fuel prices that led to more demand for fuel-efficient vehicles. Despite GM’s effort to rebrand itself with Volt — which aims to differentiate itself from Toyota’s Prius — Toyota may still be a step ahead, as the automaker recently announced Prius is going solar.

Archer Daniels Midland, the largest ethanol producer in the U.S., invested in additional ethanol capacity because it thought the U.S. and E.U. mandates to blend ethanol with gasoline would expand. But the company is now in a bind because it’s been recently realized that the current generation of ethanol production may not be sustainable. The E.U. has already pulled back from its commitment for ethanol to contribute 10 percent of its fuel supply by 2020, the U.S. may take a similar step.

Wigder says ADM may be wise to proactively shift its stance on ethanol, by “accelerating its migration to more efficient inputs like switch grass, as well as actively managing its brand image.”

Instead of standing still, Wigder recommends brands to evolve when confronted with shifting market dynamics, and sometimes even reinvent themselves in order to stay relevant.

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