Green Optimism and the Emerging Economics of Trust

(Published in the June '09, Merchant Magazine and Building Products Digest.)

It seems there’s less talk these days about the bad economy and more about things we can do to take action. Action is inherently hopeful which is psychologically empowering, but the real dollar value lies in the fact that that those businesses that take action when economic conditions change create their own opportunities. And over the last several weeks, this is exactly what I see happening. After multiple conferences and talking with hundreds of businesses and entrepreneurs, I’m hearing optimism about green business opportunities and a genuine desire to be more, or even much more, sustainable. And this is leading to an emerging economics of trust that our industry needs to embrace.

The big economic trends all point to “green”, of course, clean energy, energy and water conservation, clean technology, federal spending and regulation, etc. The green building movement is positioned to explode over the next several years. There are more green building programs that require 3rd party verification and the USGBC’s LEED program is pushing 3rd party life cycle analysis (LCA) for products and materials earning LEED credits. And there are more 3rd party certifications that cover a wider variety of product categories. The message to manufacturers is that not only must they produce products that meet green building guidelines, they must do so sustainably, and it must be demonstrated to a trusted, impartial third party. “Trust, but verify,” a former president and product pitch man once said. And manufacturers are doing it, ensuring that this will be one of the most important ways to establish their credibility in the marketplace, with huge implications for brand building, marketing and sales strategies.

Consumer attitude trend lines continue to slant “green,” as well. Energy saving is top of mind for most at the moment, but awareness about the long term issues of climate change, drought, eutrophication, toxic chemicals, food security, etc. hasn’t abated. Consumers are still buying greener products, but more people are suspicious of corporate greenwashing. In fact, one emerging trend shows people moving away from “consumerism” altogether and toward greater personal responsibility. More people want to do more with less: less negative impact on their family’s health, the environment, and energy budget, and more quality of life. As a result, a host of social media websites like GreenGuide.com and GreenMaven.com are popping up, attempting to deliver the real truth about this green product or that greenwasher, creating rapidly growing communities that trust in the “wisdom of crowds.” More importantly, sites like these can establish or obliterate the credibility of a retailer or a product in flash.

I’ve recently spoken with a surprisingly large number of product manufacturers, some in unexpected product categories, who are planning to undergo some sort of third-party certification or documentation to give their claims a credibility boost in the market. Product certifications and other documentation are increasingly important to retail and distributor merchandisers who process loads of product data everyday but don’t have the expertise or the time to independently verify all manufacturer claims. More often these days, the first question a buyer asks when being sold a green product is, “who says?” That’s a good sign, because many retailers and distributors I talk to are attempting the more difficult task of creating trustworthy merchandising programs for their stores and yards. The starting point and the foundation for these programs must be on building collections of quality, verified products that the sales staff understands with confidence. Those who get it right will inspire trust and have good reason to be optimistic about their future.