Climate change is a serious challenge for businesses, but marketers may be doing too little to address it. Results from the February 2022 edition of The CMO Survey show only one-third of surveyed companies have incorporated climate change issues into their brand strategies or have specific marketing goals related to climate change.

Strikingly, nearly 40% of companies are taking no climate-related marketing actions.

These number are more encouraging in the UK where 57% of companies have incorporated climate change into brand strategies and only 19% are taking no climate-related marketing actions. Nevertheless, these statistics are disconcerting given many climate change leaders believe time is growing short to effect major change and protect the planet for future generations.

So why are so many marketers’ falling behind on climate action? Findings from The CMO Survey provide several possible explanations.

Covid’s distracting effect
Companies are less likely now than before the pandemic to take actions to reduce the negative impact of marketing-related activities on the ecological environment, except for a small increase in willingness to change their brands.

In February 2020, survey results showed that 73% of marketers reported they were changing products and/or services to reduce the negative impact of marketing-related activities on the ecological environment. However, this number dropped by 30% two years into Covid. This is likely because many marketers took on additional time-sensitive and mission-critical responsibilities during the pandemic, such as accelerating digital initiatives.

Lost in translation
Close to 50% of marketers surveyed say it’s difficult to communicate ideas about climate impact to customers or partners. Marketers may reason that if they cannot articulate climate priorities to those they work most closely with, it may not be worth the risk and cost of moving forward with these initiatives.

Lack of customer reward
Only one third of marketers believe their companies will be rewarded for taking climate-related actions, and only a quarter report their customers are willing to pay a higher price for more climate-friendly offerings. That’s likely accurate for the short term as the rising cost of raw materials, finished products and services shift buying behaviours.

Failure to adopt climate-related metrics
Just 19% of marketers report their companies have adopted climate-related metrics. This makes it difficult to understand where the company stands on climate issues and limits the ability to act strategically.

ESG pushback
If Davos is any indication of the larger tenor of thinking about climate, companies may be worried the tide is turning against climate activism and other environmental, social and governance (ESG) initiatives. The line between sound forward-looking business strategies and woke capitalism may be too difficult for many business leaders to walk and they are pulling back.

Despite these discouraging results, CMO Survey data offers several bright spots. First, the largest companies, both in terms of annual sales revenue and number of employees, are doing more on the climate action front.

Larger companies are more than twice as likely as the average size company to have explicit goals related to their impact on climate change. This could be due to a combination of internal pressure from employees, external pressure from investors and the public, and leaders’ desire to future-proof their businesses and be good stewards in the communities they serve.

Regardless of the reason, we think this should bode well for the future because larger companies often blaze the path for smaller companies and entire industries to follow.

Marketers can help lead companies by providing research and case studies on how adopting climate metrics leads to business innovation, operational efficiency, and other forms of competitive advantage.

An example is Unilever’s Dove brand, which announced an ambitious plan to reduce plastic waste by 2025. Not only is the plan designed to reform the brand’s own plastic footprint with stainless-steel refillable deodorant sticks and other product changes, it is also hoping to push the broader cosmetics industry towards a more sustainable future.

Second, marketers report their customers and partners are in fact shifting demand to more climate-friendly products and services (57.5%) and demanding more transparency on climate impact (51%).

Interestingly, the demand for climate-friendly products/service is stronger among B2B Services (69.6%), indicating business customers will likely drive changes that may then influence the B2C product sector.

At the same time, the demand for transparency is stronger among B2C-product companies (59.1%), pointing to an opportunity to communicate more clearly with consumers.

Third, more than half of marketers believe making climate-related changes to products/services will not change their customers’ experience. This should make it easier for companies to change their products and services without requiring complex explanations that may turn some consumers off.

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