Truth, lies, branding and CSR

Presentation DAFI, CopenhagenAugust 2007

www.kontrapunkt.com

The case for green to the skeptical brand manager

Consumers cry for it - but companies are too slow to deliver

Source: McKinsey Quarterly, 2007

A recent Goldman Sachs report suggest CSR as the number one consumer concern

Source: The Goldman Sachs Group Inc.

Green is the new black

LOGOBRAND TAGLINE

FASHION BRANDS USING CSR ACTIONS EXAMPLES

Patagonia Environmental activism

• Campaing for protecting the arctic national wildlife refuge.

• Strategy for sustainable production

Levi’s • A collection of 100% organic cotton jeans

American Apperal

• A collection of pesticide, herbicide, and chemical-free products

Not defined

Jackpot Respect for people and nature

• A collection of organic cotton produced in a sustainable way. • Partnership with MADE-BY

H&M • Collections of organic cotton• Babywear marked with EU’s eco-

label, the Flower• Stategy for sustainable

production

Not defined

The answer from the skeptical brand manager

Consumers lie about the importance of CSRAttitudes and actions are two very different things

“This guy is a liar”

A quote from an honest and representative fashion consumer

“Let's say that you're trying on two pairs of jeans. One pair is 100% organic and fits okay. The other is not so organic but— whoa! — it does something spectacular to your rear view. Which do buy? I'd sacrifice the greater good of the planet for the perfect pair of jeans. In a heartbeat. Even after reading a Grist.com interview with eco-denim designer Tierra Del Forte. Even though I know that I'd be supporting the use of pesticides, insecticides, etc., etc.”

Comment posted on www.lime.com, July 2006

“Show me the CSR-blockbuster in the fashion industry”

The central brand challenge is how to transform attitudes into actions

Today’s CSR branding is often boring, banal and a clumsy add on

Som big ones try integrating CSR into their brand core

BP

LOGO BRAND TAGLINE

GE

Toyota

Unilever

*Fortune 500 companies that use the CSR as a core value proposition and an integrated part of their growth strategy

CSRBRAND LEADERS*

Beyond Petrol

ACTIONSEXAMPLES

Ecoimiganiation

Add vitality to life

Today tomorrow

• 50% reduction in water usage in production since 1995

• Strategy on sustainable packaging

• 2x R&D investment in cleaner technologies

• 1-30-30 Gas emission reduction plan

• Launched “BP Alternative Energy” division (2005)

• R&D in low-carbon power (wind, solar, hydrogen

• Prius - hybrid car

• Joined the California fuel cell partnership

American apperal

• Employing more than 5,000 people.

• Capacity to produce more than 1 million T-shirts per week at its Los Angeles manufacturing facilities.

• Currently 143 American Apparel retail locations in 11 countries worldwide.

• American Apparel's sales for 2006 were an estimated $300m.

• Sales and EBITDA profits have expanded nearly eight-fold since American Apparel's 2002 fiscal year

• 80% gross margin, an indicator of profitability, is well above the industry average of 60%.

• Having gone public, American Apparel plans to open another 650 shops across the world.

Thank you