Since 2009, the world has been witnessing an unexpected tussle between the government and civil society activists in Russia, a country that typically doesn’t allow its citizens much say in issues of public development. Thousands of people have been protesting against the razing of large parts of the Khimki forest to build an US$8 billion motorway between St. Petersburg and Moscow. Despite numerous protests that highlighted public concern about the fragmentation of the centuries-old forest and the consequences for air quality in the pollution-choked Russian capital, Prime Minister Vladimir Putin gave his final approval for the highway project in November 2009. Tough police crackdowns and arrests made little difference to the movement – activists continued to agitate in a variety of ways, including public rallies, peaceful demonstrations, and music concerts. Finally, in August 2010, President Dmitry Medvedev instructed the government to suspend the construction of the 10-lane toll highway through the Khimki forest. Perhaps the President’s statement best illustrates the growing power of Russian citizenry in environmental matters: “Taking into account the amount of appeals, I have made a decision…to suspend the implementation of the decree on the construction of the toll highway, and to hold additional public and expert discussions.”
Russia is just one of the emerging economies in which “green” seems to have become the new mantra and where people are increasingly driving environmental change. Environmentally sustainable behaviour in BRIC countries is growing with each passing year — the latest Greendex survey confirms this trend. The top-scoring consumers of 2010 are in the developing economies of India, Brazil, and China (as they were in 2008). Consumers registering the largest increase in environmentally sustainable consumer behaviour over the last two years include the Indians and Russians. It is clear that the road ahead in the emerging economies of the world is going to be increasingly determined by green factors.
A space for the convergence of ethical responsibility and the business bottom line
This scenario presents corporations with a dual advantage: adopting green practices is the right thing do, not just as an environmentally responsible move but also as a means to increasing profitability. As a result, green consumerism is driving corporate environmentalism. Needless to say, the opportunity for companies in the BRIC countries is vast. From green goods and services to green offices (which conserve energy, have their own water and waste recycling plants, and even generate their own power), companies across sectors are scrambling onto the green bandwagon to secure the benefits. In India alone, the group includes key players in numerous fields: ITC-Welcomgroup, Tata Sons, HSBC, Google, Infosys, Cicso, IBM, HP, Pepsico, Max New York Life, and even the Indian army, which now runs many of its own cantonments with green energy created by harnessing wind sources. One must keep in mind that legislation in India has been largely silent on environmental matters — it is primarily the citizenry that is driving this new green revolution.
Going green: A risky business
However, the risks of “going green” should not be underestimated. Mark Chataway, co-founder of Baird’s CMC explains, “With thousands of new users accessing the Internet every day and traditional media sources bringing environmentally relevant topics into the mainstream, consumers in BRIC countries are become savvier by the day.” Suspicion of “greenwashing” — companies making false claims about the environmental impact of their products and practice — is rapidly increasing. The Greendex survey has identified this growing cynicism as the greatest barrier to further improvement in green behaviours. At the same time, the fact that consumers are demanding greater accountability also means it is critical for corporations to be more careful about what they claim and how they communicate it to the general public. In recent years, there have even been studies and papers that claim to have evidence of stock markets penalising firms for poor environmental performance.
Perhaps the recent and unprecedented rise in civil society groups putting pressure on corporations as well as governments is best illustrated by the Coca-Cola story in India, which began in the once fertile and picturesque village of Plachimada in the state of Kerala. Since Coca-Cola opened a bottling plant in the area, the village has been saddled with chronic drought and polluted groundwater. The residents of Plachimada launched a concerted effort to evict Coca-Cola from their village, and the protests soon spread throughout the country, including other rural communities that were being similarly affected. Reacting to the public outcry, Coca-Cola announced it intention of becoming “water neutral” and began to advocate itself as an environmentally responsible entity. The move backfired — there were renewed agitations across the country and people began to ask persistent and troubling questions about the validity of water neutrality (a term the company was finally forced to retract). Meanwhile, Coca-Cola’s controversial practices in India continued, including the usage and pollution of scarce water resources. In March 2010, a government-appointed investigative committee recommended that Coca-Cola be held liable for US$ 48 million for damages caused in Plachimada alone. In July 2010, the Government of Kerala announced that it was proceeding with the formation of a tribunal to hear and award compensation claims against Coca-Cola. As the world follows the story closely, it would be impossible to overstate the importance of Indian citizens and non-governmental organisations in this case: not only did the campaign spark off an anti-Coca-Cola movement across the country, it was also able to influence government decisions at the very highest level.
Steering the green boat: How to reach new horizons unscathed
How, then, should companies navigate the tricky and unfamiliar green landscape in BRIC countries? What strategies can help them effectively harness the opportunities while mitigating the risk? Says Nikolay Kudryashov, associate at Baird’s CMC, “Many companies have the best environmental intentions. When they make a public statement about ‘going green’, they mean it. But the expenditure to actually become environmentally friendly as far as technology and infrastructure are concerned is massive. Sometimes it may take 10-15 years to actually achieve the stated green goals.” As a result, people often assume that corporations are greenwashing their products and services. With people becoming more and more aware in the BRIC countries, it is no longer enough for companies to put up a couple of billboards, create attractive advertisements, and label themselves “green”. Francois Baird, co-founder of Baird’s CMC believes that a well-planned and robust communications strategy is a must for any company that is going green in an emerging market. It is imperative to build a solid, long-term reputation rather than trying to derive short-term gains. Explains Francois, “Companies often confuse image with reputation. Image is merely how you appear, while reputation is based on what you have actually done. A company must focus on its reputation management — mere image-building exercises can backfire badly.” Civil society groups in emerging countries are demanding greater accountability — they want accurate information about long-term plans, tangible timelines, and transparent deliverables. The need of the hour is for corporations and governments to set comprehensive and realistic green goals and to clearly communicate these to the public and to key opinion leaders. If properly implemented, this plan of action can help maximise the profits of a company and help it explore a new and exciting avenue of opportunity.