A study of ethical green marketing JAHDI, Khosro Saftarzadeh Available from the Sheffield Hallam University Research Archive (SHURA) at: http://shura.shu.ac.uk/3196/ A Sheffield Hallam University thesis This thesis is protected by copyright which belongs to the author. The content must not be changed in any way or sold commercially in any format or medium without the formal permission of the author. When referring to this work, full bibliographic details including the author, title, awarding institution and date of the thesis must be given. Please visit http://shura.shu.ac.uk/3196/ and http://shura.shu.ac.uk/information.html for further details about copyright and re-use permissions. 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Box 1346 Ann Arbor, Ml 48106- 1346 A Study of Ethical Green Marketing Khosro Sattarzadeh Jahdi A thesis submitted in partial fulfilment of the requirements of Sheffield Hallam University for the degree of Doctor of Philosophy July 2006 Abstract This thesis examines the extent and scope of influence of ethical and green issues on organisational decision making strategies. It further analyses companies’ approach to such themes and the manner in which ethical and green marketing is implemented. Associated concepts such as corporate social responsibility, sustainable development and so forth, as well as the background to the emergence and growth of interest in environmentalism and the relevant ethical perspectives are explored. A comprehensive review of the literature carried out over almost 10 years and spread over a number of chapters is further complemented by the findings of case studies based on organisations participating in this research programme, in 1999, 2003 and 2005. The result is an invaluable insight into major ethical and green theories and concepts as well as their possible implementation by the firms in question. This compares and contrasts theory with practice and is also used for triangulation purposes. The findings indicate that, overall, organisations are either increasingly implementing green policies or are seriously considering their application to their operations and activities. Driving forces of company greening policies were also discussed in this thesis. Although the majority of organisations agree with the notion that ‘good ethics are good for business’, there was no indication of an industry wide paradigm shift. Higher levels of consumer cynicism and suspicion of ‘green-washing’ was also noted. Marketing managers have a major task to educate and, convince consumers and promote green products as those that are of high quality, value for money, accessible and simultaneously green. A further social responsibility of marketing managers is to move beyond product focused greening and to formulate and implement holistic marketing strategies that encompass all components of marketing and business. Acknowledgements This thesis is dedicated to my wife Mandy and children Robin and Natasha for their support, encouragement and love. I am indebted to Professor Colin Gilligan for his wisdom, knowledge, support and encouragement throughout what seems like a lifetime. Without his professional supervision, consistency and determination this thesis would not have been possible. My sincere gratitude is further extended to Dr James Chandler for his invaluable advice, supervision and professional guidance. Jim helped me to literally re-write the thesis and provided clear guidance throughout. I would also wish to thank Professor Dave Morris for his assistance with the earlier part of my PhD research. CONTENTS Page Introduction 8 Research proposal and objectives. 8 Diagram of Link between Ethics and 15 Green Marketing CHAPTER ONE 18 The Review of the Literature I - The Concept of Green-ness 1.1. Development of Concern about the Environment 19 1.1.1. The Waves of Environmentalism 23 1.2. Sustainability and Sustainable Development 24 1.2.1. Problems Associated with Sustainable Development 1.3. Definitions of Green-ness 31 1.3.1. What is a Green consumer? 33 1.3.2. The Ladder of Green-ness 35 1.3.3. Green Marketing- Patterns of Thinking and 36 Development 1.4. A Critique of Green Marketing 41 Conclusion 49 CHAPTER TWO 51 Review of the literature II - Ethical Dimensions to Green Policy and Marketing Introduction 2.1. Historical Background to Marketing 51 2.2. Evolution of Components of Marketing 52 2.3. Birth of Modern Marketing 58 1 2.4. Importance of Marketing 62 2.5. Marketing and Ethics 68 2.6. Milton Friedman on Business Management 73 2.7. Legal Compliance or Ethical Conviction? 77 Conclusion 82 CHAPTER THREE Review of the literature III- The Drivers of Green Policies in Business Introduction 84 3.1. Model of Inter-related Drivers of Green 85 Policies in Business 3.2. Necessity of Conforming to Legislative 87 and Legal Requirements 3.2.1. Local, National and International 88 Initiatives 3.2.1.1. Local 88 3.2.1.1.1. Impact of LA 21 91 3.2.1.2. National 92 3.2.1.2.1. Environment Agency 95 3.2.1.3. European Union 98 3.2.1.3.1. Scope of Environmental 104 Legislation 3.2.1.4. Global 106 3.2.1.4.1. Principles of International 108 Environmental Law 3.2.1.4.2. Role of United Nations 109 3.2.1.4.3. Agenda 21 114 3.3. Concern for Customer Safety 119 3.4. Concern for Product Safety 120 3.5. Satisfy Customer Needs for Green Products 122 3.6. Generate Public Concern for Green-ness 124 in order to Create New Customers 3.7. Corporate Social Responsibility (CSR) 126 3.7.1. A Critique of CSR 131 3.8. The Role of Competition 134 3.9. The Role of Technology 140 3.9.1. Some Examples 147 Conclusion 155 CHAPTER FOUR Business Strategies and the Relationship with Green Drivers Introduction 4.1. Ethical Conviction or Necessity? 157 4.2. What Types of Business are Required by 161 External Pressures to adopt Green Strategies? 4.3. Identification of Businesses Where Ethical 162 Concerns Lead to Green Policies 4.4. The Problem of Maintaining both an Ethical Approach and Retaining Profitability 163 4.4.1. Cost Benefit Analysis 166 4.4.2. Economic/Financial issues of Green Marketing 169 4.4.2.1. Rachel Carson meets Adam Smith 172 4.4.3. The CERES Principles 174 4.4.4. The Triple Bottom Line 179 Conclusion 180 CHAPTER FIVE Research Methodology Introduction 182 5.1. Explanation of the Paradigmatic Stance 183 5.2. Research Design 186 5.2.1. Qualitative versus Quantitative Research 187 5.2.2. Methods of Qualitative Research 189 5.2.2.1. Reason for Using Semi-structured Interviews 193 5.2.2.1.1. Possible Problems with Interviews 194 5.3. Choice of Organisations to Investigate 195 5.3.1. Validity of sample Size-Epistemological Issues 197 5.3.2. Selection of Interviewees 200 5.4. Research Limitations 201 5. 5.0ther Research Perspectives 203 5.6. Research Focus 204 5.6.1. Evaluation of a Case Study Approach 205 5.6.2. Use of Case Studies 207 CHAPTER SIX 210 Findings on Companies Legally Obliged to be Green Introduction 6.1. Pease Drum and Tank Recycling 211 6.1.1. Background 211 6.1.2. Findings 211 6.1.3. Conclusion 220 6.2. Yorkshire Water 223 6.2.1. Background 223 6.2.2. Findings 231 6.2.3. Conclusion 247 CHAPTER SEVEN Findings on Customer Led Organisations Introduction 251 7.1. Clariant UK Pic. 252 7.1.1. Background 252 7.1.2. Findings 253 7.1.3. Conclusion 261 7.2. British Petroleum (BP) 262 7.2.1. Background 262 7.2.2. Company’s Environmental Efforts 263 7.2.3. Evaluation of BP’s Environmental Policies 266 7.2.4. Conclusion 272 7.3. Argent Energy 274 7.3. 1. Background 274 5 7.3.2. Some Facts and Figures 274 7.3.3. Findings 276 7.3.4. Conclusion 279 CHAPTER EIGHT The Self-Confessed Ideologically Green Companies Introduction 8.1. The Co-operative Bank 282 8.1.1. History and Background 282 8.1.2. Findings 287 8.1.3. Conclusion 307 8.2. Green and Black’s 309 8.2.1. Background 309 8.2.2. Findings 309 8.2.3. Conclusion 318 8.3. Lush Cosmetics 319 8.3.1. Background 319 8.3.2. Findings 320 8.3.3. Conclusion 325 8.4. Suma Wholefoods Co-op 326 8.4.1. Background 326 8.4.2. Findings 328 8.4.3. How is Suma Managed? 331 CHAPTER NINE Evaluation of the Green Marketing Drivers’ Model Introduction 334 9.1. Compliance with Legislative/Legal Requirements 335 9.2. Competitive Driven/Competitive Advantage 339 9.3. Corporate Social Responsibility/Management 340 Espousal 9.4. Customer Driven 343 9.5. Economic/Financial Gains 344 CHAPTER TEN 347 Conclusion Directions for Future Research 356 Bibliography 358 Appendix 1 Questionnaire used in 1999 Appendix 2 Questionnaire used in 2003 and 2005 7 Introduction RESEARCH PROPOSAL and OBJECTIVES Background “Things can change.