By Terry Kellogg, Executive Director of 1% For The Planet
At its best, the field of environmentally preferable purchasing can take credit for the birth and development of the natural and organic product market, projected to reach global sales north of $100 billion next year. On a micro level, it can now boast of significant success stories like the Toyota Prius and EPA’s Energy Star program. The broader LOHAS (Lifestyles of Health and Sustainability) market paints an even more compelling picture: estimated at $230 billion in the US alone.
Even with double digit compound annual growth rates for more than a decade, however, the LOHAS market is still seen as largely untapped. Its remaining potential exists because more than 30% of Americans seem ready and willing to support companies whose values are perceived to be in line with their own. And to this day there are many categories with underdeveloped values-oriented offerings.
Stories about the LOHAS market over the next two years will be headlined by more mainstream (Wal Mart and GE have already perked up) entrants. These players will underscore the market’s transition from a niche opportunity to a powerful segment that no company can afford to ignore.
But this market is not cut out for companies with unexamined practices looking to make a quick buck where flush demand coupled with relatively thin offerings has created very attractive margins. The interplay between conscious consumers and companies hoping to gain their preference has already helped to establish very high expectations for performance standards across a wide range of initiatives. Ignorance of these expectations could spell disaster for a new entrant.
In looking for a way in, some companies will take a piecemeal approach to reducing their own ecological footprint or developing a more sustainable product line. There is a tremendous amount of information available to guide such decisions and almost without exception, case studies illustrate a strong correlation between environmental gains and positive business results, particularly in the early stages of adaptation.
Even for the well-informed, however, there remains the challenge of moving effectively beyond low hanging fruit. Today’s paradigm offers a finite supply of cash positive investments that yield solid environmental gains. Positioning ahead of the curve requires an appetite for risk that too few companies are ready to embrace. Thus the critical requirement for additional investments aimed at changing today’s paradigm.
A subtly different way to approach the LOHAS market is to ask: how can we as a company maximize our potential to affect change on a macro scale, and how can we do it in a way that best supports our long-term business interests. Looking through this lens, opportunities will emerge that tightly knit sustainable business practices with overall business strategy. Theses initiatives will garner the internal resources required for success; and their success will ensure both their longevity and the opportunity for similar efforts down the road. Many such initiatives will be the same as those surfaced through a purely internal assessment of options. But overall, they are more likely to maximize returns to both the environment and the sponsoring enterprise.
1% For The Planet (1%FTP) is an increasingly attractive initiative for many companies. Members of 1%FTP – companies that commit at least one percent of their sales (or the sales from a brand) to environmental causes every year – have grown in number from 90 to nearly 500 in less than two years. They hail from nearly every sector imaginable, and range in size from billion dollar publicly-traded entities to pre-revenue start-ups and family owned businesses. They are attracted to the network for a wide range of reasons including connectivity – with other members, with causes they care about and with committed consumers.
1%FTP is a tool that can help address important barriers that still exist in the LOHAS arena. Because it’s a program that has the potential to be adopted widely (unlike labeling schemes limited to certain sectors) it also has the potential to become recognized and acted on widely. One Percent also reflects the kind of clear and powerful commitment that easily resonates with a wide audience. This helps address the challenge of effectively communicating what can be confusing initiatives that lack relevance to enough people.
As a tool to affect change, it is hard to match the potential embodied in purchasing power. But for the market to work effectively in this regard, a spectrum of meaningful choices must be available with enough information to drive consumer decision-making. The growth of the legitimate LOHAS segment speaks to the steady erosion of these barriers. One Percent works to align and reward committed companies and activists, two powerful macro-societal change agents. In doing so, 1%FTP places a significant amount of potential power in the hands of a consumer base that appears ready and eager to use it.
Terry Kellogg is the Executive Director of 1% For The Planet. Prior to joining 1%, Terry ran Timberland’s Environmental Stewardship department and worked for the renewable energy retailer Green Mountain Energy. Terry began his career in environmental work at the Greater Yellowstone Coalition in Bozeman, MT.
February 14th, 2007 at 9:45 pm I laud 1% For the Planet in its efforts with the business world. However, it is a concept that needs to be adopted by the general public as well. Al Gore in the movie, An Inconvenient Truth, challenged watchers to go home and do something to save our planet. We went home and immediately contacted our power provider, and for a few dollars extra a month we are purchasing wind power. Citizens should be urged to take the 1% for the planet vow. If everyone reduced oil consumption by 1% or more, cut down on electricity and recycled we could make a big difference toward alleviating the threat of global warming to our planet. Rock stars - those icons to the teen age world, could be positive leaders for such a movement. Clubs could be started among the youth of our society. Under the banner of 1% For The Planet, kids could be motivated to cut back on their driving by walking or cycling more and take part in community recycling efforts. We all need to adopt the 1% For the Planet as our motto!