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Environmental seal wins profit points Add to ...

Businesses usually view government and the environment as obstacles to profit.

But what if a government-developed environmental program actually helped businesses to steal market share?

About 400 companies across North America subscribe to the EcoLogo program run by TerraChoice, an Ottawa-based environmental marketing firm that is best known for its annual “Sins of Greenwashing” report. Introduced by Environment Canada in 1988, EcoLogo is a sort of Good Housekeeping Seal of Sustainability that identifies certifiably green products or services.

While companies pay 0.5% of product sales to subscribe, EcoLogo has proved a boon for both the environment and the bottom line.

“If we can help leaders win market share and profit, then others in the market will want to win that back by emulating that leadership behaviour,” says Scott McDougall, president of TerraChoice, which assumed responsibility for the program in 1995.

Its roster includes the bathroom-tissue marketer Kruger Products, Domtar's EarthChoice brand, and Yellow Pages, which turned to TerraChoice to help develop a listing of green businesses.

Different shades of green

TerraChoice consults on strategy and communications to help companies recognize how best to market their environmental bona fides, and it conducts market research to find which levers are the most effective in changing consumer behaviour. “The challenge of speaking to the green market is a challenge of dialect,” TerraChoice president Scott McDougall says.

“You and I might be green consumers, but for very different reasons.”

At root, he says, “the challenge is in translating from the language of environment to the language of the values the audience already adheres to.”

Saving points to save the planet

When Air Miles, the country's largest loyalty marketing program, opened a new division last year focused on sustainability, it wanted an easy way to ward off potential skepticism. “Having the TerraChoice stamp made a huge difference,” says Andreas Souvaliotis, chief impact officer and general manager of Air Miles for Social Change. “Consumers now can trust that it's not just Air Miles trying to tell them this is a greener option, but some really authentic, prominent third party.”

Collectors can cash in points when purchasing environmentally sanctioned services and products, such as a SmartCar.

Cleaner cleaning products

Five years ago, Laval-based cleaning-products company Avmor had no environmentally friendly brands. Now, it has 42 products, representing about 25% of its revenue, that carry the EcoLogo seal, and it expects that within five years more than half of its revenue will come from green lines. “My research and development budget is 95% dedicated to sustainable technologies,” says Paul Goldin, the company's chief sustainability officer.

The fact that many of Avmor's new green products are superior to traditional ones is a bonus.

This story originally appeared in the Your Business supplement of the April issue of Report on Business Magazine.

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