Green procurement is an important part of greening a company’s business practices. Differentiating your company by creating a green product can create new opportunities in the marketplace. But what is the market like for green right now? How do you sell it? At the Ontario Centres of Excellence fourth annual Discovery conference (held May 11-12), Scott McDougall, CEO of TerraChoice, and Dr. Blair Feltmate, Director of Sustainable Development for Ontario Power Generation were asked to discuss the issue.

Sell the sustainable experience
Feltmate stresses that, when pitching a green product to a company, sell more than its basic attributes (i.e. that it will save you energy).

"When approaching companies, I would advise that you develop a sense of what that company’s overall commitment to sustainable development (SD) is," says Feltmate. "There are about 10-12 categories of reasons as to why SD is good for business when properly applied. Within a particular (industry) sector, there is generally two or three reasons why SD is good for business. So when you are approaching companies, find out for them what the most important factors are in their commitment to SD, and then when you’re presenting your products, present them within the context of value add in their overall SD framework commitment."

For an example, Feltmate notes that for the mining sector, gaining access to markets is an important reason for their SD commitment — they have to have that SD credibility to receive a license to open a new facility in a new market. Another reason that might be a factor in another industry is the attraction and retention of new hires. A company’s commitment to SD can help them attract new talent.

Feltmate’s big takeaway is simply, understand what your potential customer is doing in the SD space, and how your product fits in with that commitment.

"Present the green products as part of both the environmental and the social dimension of commitment in that company’s overall commitment to SD," suggests Feltmate. "In so doing, I think you’ll have a much stronger sell than talking about the direct cause and effect relationship of putting the product in place to save some energy:"

Green as competitive advantage
But are people buying green in this market? Can you sell a product because it’s green right now?

McDougall suggests that a green product can only be a competitive advantage.

"When times are tough, you don’t need less competitive advantage, you need more," he says. "And you don’t want to drive competition by dropping the price because that’s a mug’s game and that’s what everyone else will do in a recession. You drive to what’s next most important, next most resonant to your audience. And if they’re thinking about the economy first now, that only means that health and the environment have dropped to second and third positions, so you need more competitive advantage, not less."

And as Feltmate points out, when it comes to SD spending, there may be some belt-tightening going on over how spending is happening right now, but overall the commitment remains in most companies to move toward being more sustainable.

"The commitment to stewardship is a long-term commitment that’s relatively independent of market cycles," says Feltmate. "And it’s also independent of geography. So whether you have operations in North America of Australia or wherever, your commitment to build stewardship should be in effect wherever you have operations throughout the world."

The cost complaint
McDougall notes that researchers in the field right now still say that the principle obstacle or perceived obstacle for purchasers in choosing greener products is price. It’s still perceived that there will be a premium tied to purchasing green. As he explains, the cost issue is very commodity specific.

"Unfortunately, often the people responsible for spend are different from those responsible for operations," says McDougall. "So even if the total cost of operations has benefits — i.e. the product lasts longer, maintenance costs are lower, etc. — the people making the purchasing decision don’t have accountability for operating costs. That’s one example. In other cases, it’s just a perceived problem."

McDougall also notes that, from a policy perspective, regulators have not yet been good at driving the external costs of non-sustainability into pricing, so price signals have not yet leveled the playing field.

Greenwashing revisited: is it really so bad?
McDougall’s company, Terrachoice, was responsible for a study that suggested that 98 per cent of all advertising of green products involves some level of greenwashing. This suggests that the "green" label may not even be trusted by the public. But McDougall did his best to reframe these results.

"We set a very high bar," he explains. "And we meant by greenwashing that claims are false or misleading. Ninety-eight per cent of the greenwashing claims were misleading rather than outright false. One strong message is greenwashing is still prolific, but that’s only because this is marketing. Marketers generally aren’t good at marketing pure sciences."

McDougall insisted that rather than be put off by greenwashing, companies should continue to embrace green products, imperfect or not.

"The important thing is that professional purchasers shouldn’t give up on greener products," he says. "Because even if there’s greenwashing involved, better to continue to send a signal through your choice that you want greener products, rather than sending a signal that you don’t care by choosing products that aren’t even trying."

At the same time, companies should continue to raise the bar for expectations of clarity and transparency," says McDougall.   

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