Green Branding Cashing In On The Eco-Market

For anyone who thought their green obligations stopped with a bit of household recycling, the last couple of years have proved a stark awakening. Al Gore's documentary,

An Inconvenient Truth , the international Live Earth concert series and intensive media coverage of the United Nations December summit in Bali have helped make climate change a universal and pressing concern. Among mainstream consumers there's now a real sense that environmental protection is urgent. They want to live a greener life, and their spending patterns reflect their desire to see the brands they use go green as well. In the U.S. alone, consumer spending on products and services perceived to be environmentally friendly will double to US$500 billion this year, according to the 2007 Green Brands Survey conducted by Landor Associates, Penn, Schoen & Berland Associates, and Cohn & Wolfe.

Paying more for green alternatives

Consumers not only want to buy green, they're prepared to pay more for it. Nearly 70 percent of some 2,000 people surveyed in the U.S., U.K., Germany, the Netherlands, Australia and Japan, said they would pay a premium for green energy alternatives, such as wind and solar power. According to last year's poll by IBM Global Energy & Utilities Industry, Australians were the most willing to pay more for renewable energy, but Americans said they would pay the highest premium - 20 percent or more.

This greening of consumer consciences is not just taking place in the West. The Eye on Asia study by Grey Global Group found that 86 percent of people in the region rate protecting the environment more highly than economic development, and 75 percent say they're willing to pay extra for green products. Chris Beaumont, CEO of Grey in Japan, says the levels of concern appear higher in less affluent countries - Bangladesh, the Philippines, India and Viet Nam - than in Japan and other wealthy markets.

It is not just altruism which fuels the demand. Consumers are also motivated by rising energy prices and tax policies that punish polluters. The British national budget for 2008, for instance, introduced vehicle tax breaks for new cars with the lowest carbon emissions, while almost doubling taxes on the least-efficient cars.

Consumer brands have been quick to respond to shoppers' desire to buy green. Wal-Mart announced last year that it would provide carbon ratings...