by Lionesses of Africa Operations Department
BlackRock is the world’s largest asset manager, and so when its boss Larry Fink speaks, the world listens, and who are we to argue with his comment above (see here). He has a point and especially in the United States where the discussion, as sadly with so much in many countries these days, has become polarized along political lines.
He did add, however, that not using the term would not change anything. Blackrock would still take very seriously “decarbonization, corporate governance and social issues" that have to still be addressed in the world. On the issue of Climate Change “BlackRock has sought to strike a balance, continuing to invest in fossil fuel companies while nudging them to adopt energy transition plans.” Mr Fink is very clear about the journey that he and his massive firm are on, ignoring the noise left and right, he is focused on where he wants to go. Whether you support him or not, whether you want to work with non-green firms, or if you just want to shut them all down, this is his journey that he and his firm are on.
This is central to the debate currently growing around the world. Do we refuse to finance ‘dirty’ or ‘brown’ companies to force them to change, whilst financing Green companies to increase support and reward them? Or do we recognize, as Mr Fink and also Kelly Shue (Professor of Finance at Yale) do, that to increase financing of Green companies at the expense or even cutting off of ‘non-Green’ or ‘Brown’ companies is simply bad economics, especially if saving the world is what we are after (yes, seems totally counter-intuitive).
In her paper entitled “Counterproductive Sustainable Investing: The Impact Elasticity of Brown and Green Firms” (here), she writes: “…a reduction in financing costs for firms that are already green leads to small improvements in impact at best. In contrast, increasing financing costs for brown firms leads to large negative changes in firm impact.” - why is this? Why would increasing financing costs create a worse result in Brown firms? Simply put when we are under stress, backed into a corner, we revert to form, we reach for what we know and hug it closer, we certainly do not as CEO of an oil company stand up in front of the Board and say - “We shall shut down and plug all our wells and power the world through billions of Hamster Wheels!” - well not if you want to keep your well paid job and massive pension, that is…
In case anyone thought we were being facetious about the Hamster Wheel solution for global energy, according to the paper: “The ESG-innovation disconnect: evidence from green patenting.” by Cohen, Gurun and Nguyen (here) “…oil, gas, and energy-producing firms…who are often explicitly excluded from ESG funds’ investment universe – are key innovators in the United States’ green patent landscape. These energy producers produce more, and significantly higher quality, green innovation.” - so don’t knock the Hamster Wheel, you know it makes sense(!) - or as Coldplay has on the current world tour, a floor that translates the crowd’s dancing into kinetic energy to power their show! (here)
So while this debate rages (and ‘rage' is the right word) around the world, and while sporting events in the UK are being disrupted and roads closed by protestors (er…braver souls than us can perhaps suggest to the protesters that they should really sell their houses and cash in their pensions, and hand all the proceeds over to ‘non-Green’ firms with a loving note to “Go save the world!”), what can we as Lionesses do?
The short answer is, not a lot (!) other than like Mr.Fink ignore the noise being generated, and concentrate on what we are doing, our own journey and where we want to take our company. Of course this is not easy, but what is really important is to continue the work and impact we bring to the frontline of Climate Change, and our huge positive changes and support we provide to local communities, then importantly, make sure that this is not forgotten or hidden behind the fog of such a polarizing war.
How do we do that? The main thing we must do is follow Coldplay’s example and shout about it - make sure that this message of what we are doing and why we are doing it is pushed out to those that care, so they understand our story and become loyal supporters, customers and consumers.
Great idea, we hear you say, but what actually resonates with our customers, or clients? Due to ‘Greenwashing’ and loads of false marketing around the globe, certain phrases now have significantly less impact with consumers. How do we know what is a turn-off for consumers, and what is a turn-on?
Luckily the NYU Stern Center for Sustainable Business and Edelman (the largest public relations firm in the world by revenue), have done the hard work (here) with nine major global brands and worked out what does actually resonate best with consumers, what sustainability messages when authentic are best at creating loyal customers and driving purchases.
First - we should never forget the actual product! No point in saying “It’s Green, Green and er…Green!”, without mentioning that it tastes good! “…tastes good, performs well – are paramount and non-negotiable.”
Secondly they found that “Sustainability claims…also yielded a significant benefit….[and] reach”. But this was second, note. So saying the product ‘tastes good, performs well' got good results with consumers, but adding one sustainable comment such as "not tested on animals” moved the product further and adding a second sustainable comment, such as “no phosphates etc”, moved it further still, and most importantly brought in new customers.
To turbo charge this they suggest imagining a climb to the core, i.e. the taste. So think of a ladder to climb to this point, this core of your product. They used as examples: “100% sustainably farmed for great taste” or “Formulated with sustainable ingredients that are good for your skin”. The sustainable ladder moving the consumers’ minds up towards their number one switch.
They then looked to what consumers cared most about, and what you should emphasize more (has to be authentic remember), which are (in order):
Themselves and Their Families (Health and saving money)
(e.g. “Formulated without harmful ingredients” / “reduce waste and save money”)
Local Farmers
“Working with local farmers to ensure their soil stays healthy and continues to produce the highest quality ingredients for generations to come”)
Children and Future Generations
(“…for you and your children”)
Animal Health
(“Not tested on animals”)
Sustainable Sourcing
(“Uses only sustainable-sourced ingredients…”)
Local Sourcing
(“Made with 100% locally produced ingredients”)
What consumers don’t particularly care about is:
Scientific causes behind sustainability (they care about effects)
Traceability (a knock-on from too much greenwashing and ‘being economical with the truth’?)
Certifications (likewise)
Packaging
They found that “scientific causes behind sustainability [have to be] tied to a reason to care.”, so for example “no air pollution [yawn], for cleaner air to breathe [now you’re talking!]”.
Seemed to be little interest at all in Certifications, unless it was from a trusted certifier - although there didn’t seem to be many certifiers trusted, and even less interest in traceability.
Finally as far as packaging was concerned, little interest unless it was made from “100% recycled material” or had a reason to care, such as “Microplastic-free packaging for human and ocean health”.
If ESG has truly been weaponized and consumers have either become polarized or bored by the whole issue or even just cynical given the huge amount of green washing and other ‘-washing’ out there, marketing our product correctly and authentically becomes essential.
We know we have to differentiate ourselves from our competitors, we know we have to reach out to consumers (our loyal ones and new), and we know we have to tell the world what we do and why we do it - but doing that is not as easy as it sounds. So ‘ladder up’ what we do on the impact stage to the main selling point - the taste of our product for example, by giving our consumers a reason to care, a reason to join us on our journey.
If you wish to see sustainability and impact driven Lionesses making a difference on a global stage AND on a global scale and want to support their journey, then your luck is in. To continue our drive to create access to key global markets for our inspirational 1.7 million members we are hosting a Lionesses of Africa Start-up Night Africa event in The Netherlands on July 11th with these incredible Lionesses:
Jumoke Dada, founder, Taeillo (Nigeria)
Chiinga Musonda, co-founder, Savanna Premium Chocolate (Zambia)
Sarah Collins, founder, Wonderbag (South Africa)
Chilufya Mutale, co-founder, Premier Credit (Zambia)
Tigist Kebede, co-founder, Habeshaview (Ethiopia)
Hadija Jabiri, founder, GBRI Business Solutions, Eatfresh (Tanzania)
Samantha Skyring, founder, Oryx Desert Salt (South Africa)
Jane Maigua, founder, Exotic EPZ (Kenya)
Yvette Tetteh, founder, Pure & Just Food Company (Ghana)
Carmen Stevens, founder, Carmen Stevens Wines (South Africa)
Having had three ‘Start-Up Night Africa’ events with the Government of Germany, two with the UK Government, and during Covid a two-day event with Harvard University (where 2,500 people tuned into the Zoom event), we are now launching our new Dutch office with a Start-up Night Africa event in Den Haag, Netherlands, thanks to great support from the Dutch Government and their DFI, the FMO. What is an added excitement for us, not only will it be our first ‘in person’ Start-Up Night since Covid, but this will also be streamed live on Zoom, so providing everyone with a chance to show their support for these incredible Lionesses. So, for all those new to our Start-up Night Africa events, sign up via Zoom and tune in to see what all the fuss is about!.
Please see here for more details and of course the Zoom registration. Sign up, support, learn from your fellow Lionesses, and above all … Join them on their journey!
Stay safe.