Chapter 2 Sustainable marketing: marketing ethics and social responsibilityAlcoa, the world’s leading producer of aluminium, is doing just that. For two yearsrunning, it has been one of three companies singled out by Global 100 <strong>for</strong> superior sustainabilityexcellence:Alcoa has distinguished itself as a leader through its sophisticated approach to identifyingand managing the material sustainability risks that it faces as a company. From pollutionprevention via greenhouse gas emissions reduction programs to engaging stakeholders overnew environmental technology, such as controversial hydropower projects, Alcoa has thesustainability strategies in place needed to meld its profitability objectives with society’s largerenvironmental protection goals . . . . Importantly, Alcoa’s approach to sustainability is firmlyrooted in the idea that sustainability programs can indeed add financial value. Perhaps the bestevidence is the company’s ef<strong>for</strong>ts to promote the use of aluminum in transportation, wherealuminum – with its excellent strength-to-weight ratio – is making inroads as a material ofchoice that allows automakers to build low-weight, fuel-efficient vehicles that produce fewertailpipe emissions. This kind of <strong>for</strong>ward-thinking strategy of supplying the market with theproducts that will help solve pressing global environmental problems shows a company that seesthe future, has plotted a course, and is aligning its business accordingly. Says CEO Alain Belda,‘Our values require us to think and act not only on the present challenges, but also with thelegacy in mind that we leave <strong>for</strong> those who will come after us . . . as well as the commitmentsmade by those that came be<strong>for</strong>e us.’ 33Environmentalism creates special challenges <strong>for</strong> global marketers. As international tradebarriers come down and global markets expand, environmental issues will continue to have anever-greater impact on international trade. Global companies have to operate in accordance withstringent environment regulations that are being developed in countries across North America,Western Europe and other developed regions.For example, the EU has ‘end-of-life’ regulations affecting cars and consumer electronicsproducts, and the EU’s Eco-Management and Audit Scheme provides guidelines <strong>for</strong> environmentalself-regulation. However, environmental policies still vary widely from country tocountry and uni<strong>for</strong>m worldwide standards are not expected <strong>for</strong> many years. <strong>The</strong> EU wants toincrease recycling, with landfill disposal 25 per cent lower in 2010 than it was in 1995 and 65 percent lower by 2020. Across Europe the level of compliance varies hugely. <strong>The</strong> Netherlands issuper-clean in already recycling more than 60 per cent of household waste, but Portugal andGreece manage less than 10 per cent. 34Although countries such as Denmark, Germany and Japan have fully developed environmentalpolicies and high public expectations, major countries such as China, India, Brazil andRussia are only in the early stages of developing such policies. Moreover, environmental factorsthat motivate consumers in one country may have no impact on consumers in another. Forexample, PVC soft-drink bottles cannot be used in Switzerland or Germany. However, they arepreferred in France, which has an extensive recycling process <strong>for</strong> them. Thus, internationalcompanies are finding it difficult to develop standard environmental practices that work aroundthe world. Instead, they are creating general policies, and then translating these policies intotailored programmes that meet local regulations and expectations.Marketers’ lives will become more complicated. <strong>The</strong>y must raise prices to cover environmentalcosts, knowing that the product will be harder to sell. Yet environmental issues have become soimportant in our society that there is no turning back to the time when few managers worriedabout the effects of product and marketing decisions on environmental quality.93
Part 1 Marketing nowLaw of UnintendedConsequences—<strong>The</strong>recognition that almost allhuman actions haveun<strong>for</strong>eseen outcomes.Un<strong>for</strong>eseen consequences<strong>The</strong> Law of Unintended Consequences encapsulates the recognition that almost all humanactions have at least one unintended consequence. With its origins in the Scottish Enlightenment,it is not a law in the legal sense but the realisation that each cause has more than one effect,including un<strong>for</strong>eseen consequences. Global warming is an un<strong>for</strong>eseen consequence of ourlifestyle – central heating, air-conditioning, lighting our homes, leaving electrical appliances onstandby, gap years in Australia . . .“Global warming is an un<strong>for</strong>eseen consequence of our lifestyle.“Our environment is complicated, so any intervention often has consequences we do not like.Early Australian settlers introduced rabbits to the continent as a familiar food source where theflora and fauna were unfamiliar. With no natural predators, rabbits multiplied uncontrollably andcreated deserts where they overgrazed on local plants. In response the settlers introduced foxes tokeep down the rabbit population. Un<strong>for</strong>tunately the European fox found Australian marsupials easiermeat than rabbits so, as the rabbit and fox populations soared, local plant and animal life declined.It looked like a great improvement when, in the 1930s, it was realised that non-toxic, nonflammablechlorofluorocarbons (CFCs) were a substitute <strong>for</strong> the deadly refrigerants used inearly refrigerators – and great stuff to power aerosols too. Not until the 1970s did scientistsrealise that the CFC release had the potential to destroy the ozone layer and there<strong>for</strong>e exposemillions of people to higher levels of cancer-causing ultraviolet radiation.We are now facing some of the un<strong>for</strong>eseen consequences of reacting to the dangers of globalwarming. Biofuels seem a green alternative to releasing the carbon dioxide tied up in fossil fuels,like oil. This appears to be true of ethanol produced from sugar cane grown in the tropics butless true of ethanol made from corn, as being promoted in the US. This uses so much energy inmanufacture that it probably adds to global warming and the sudden allocation of corn toethanol production is <strong>for</strong>cing up food prices. <strong>The</strong> price rises caused major riots in Mexico andcommodity prices are pushing up food prices worldwide. Western economies can absorb theincreased cost of food, but what of poor people in the Third World?Biodiesel, a popular European solution to global warming, has its own unintended consequences.Rain<strong>for</strong>ests in the tropics are being chopped down to create palm oil plantations.That was not the intention. Just as global warming is an unintended consequence of affluence,so intertwined are the global environment and economy that simple interventions designed toreduce the problem can have un<strong>for</strong>eseen consequences that bite back. 35Fortunately, not all un<strong>for</strong>eseen circumstances are bad. Pfizer found that a side-effect of usingtheir anti-angina treatment UK-92480 <strong>for</strong> old people also treated impotence, hence Viagra. It hasnow been found that Viagra may accelerate recovery from jet-lag. Regain, which helps the hairgrowth of balding people, was also discovered as an unexpected benefit of taking a product tofend off heart attacks. 3694