The BBC survey suggested that over 80% of UK people are ‘ready to make significant changes in the way I live to help prevent global warming’. Nearly 90% think that changes in lifestyle will be necessary to address the problem. These numbers are approximately the same as among urban Chinese and only marginally higher than the US.

E.ON’s segmentation has over 20% of the UK already taking serious and possibly costly personal action related to climate change. Less than 15% actively reject any need to act now.

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BBC World Service recently published the results of a large worldwide survey on climate change issues. It gathered data from over 20 countries but the results I write about in this section are from the US, urban Chinese and UK responses. For clarity, I have generally grouped the responses into percentages that ‘agree’ or ‘disagree’ although respondents will have usually been offered a wider range of options. I have omitted ‘don’t knows’.

Human activity is a significant cause of global warming

More people in China think that human activity is responsible than in the UK or the US.

Is it necessary to take steps to reduce the impact of human activities?

The Chinese are more inclined to believe it is necessary to take major steps to do something about climate change. In the UK and the US, the percentage of people saying nothing needs to be done is well below the percentage of ‘deniers’. Many of the sceptics still want to do something. This is not irrational. We insure our houses even though the chance of damage is tiny.

Developing nations should not be expected to limit their emissions

A large majority in China agree that developing nations should limit emissions. The other countries also have a strong view that developing countries need to bear some of the burden.

To encourage individuals to use less, the costs of energy should be increased

Even in America there is a two-to-one majority in favour of increasing the price of carbon-based energy.

Changes in lifestyle and behaviour are necessary to reduce global warming gases

The view that lifestyle changes are necessary is more strongly held than that carbon-based energy prices should be increased.

Taxes on carbon fuels should be raised

The Chinese are much more in favour of using taxes than the UK and US. In the UK and US these numbers are substantially below the percentages of people who think that is necessary to raise energy prices.

In some further questions those opposing tax increases were asked whether using the money to support renewables and energy efficiency would change their view. About half of the opponents in the UK and US changed their mind to support higher taxes in these cases.

Ready to make significant changes to the way I live to help prevent global warming

About 80% of people are prepared to make significant changes to lifestyle. The percentages ‘strongly’ agreeing with this statement were 43% in the US, 47% in China and 37% in the UK. The percentage of people apparently really committed to doing something is lowest in the UK, though still a large fraction of the population. This is consistent with the results from the HSBC poll reported on in an earlier edition of Carbon Commentary.

The overall conclusions from the BBC survey
Opinions vary across the world, but a clear majority is in favour of the view that humankind is responsible and that lifestyles will have to change to meet the challenge. There is no evidence to support the view that people in China are any less prepared to bear some burden than respondents in the UK and US.

The E.ON survey
E.ON published a long document summarising several pieces of research it has carried out this year.

Children’s views
The report looks first at the attitudes of children and young people to climate change, showing a higher degree of concern than among older people. Paul Golby, CEO of E.ON UK, writes:

‘Not only are children most worried about global warming and climate change…but they are also convinced we won’t be able to solve the problem for them.’

73% of children believe that all energy should come from renewable sources. 69% ‘believe that they have a responsibility to encourage others to recycle and save energy’.

My interpretation of E.ON’s commentary is that levels of knowledge about climate change are surprisingly low, but there is a substantial degree of generalised anxiety about the problem.

Adult segmentation
The second issue of Carbon Commentary carried an article on the results of segmentation studies by Henley Centre and Marks & Spencer. M&S sees the following segments:

• A: Green zealots: people who will actively seek out the most ethically and environmentally responsible products. Climate change is particularly important issue to these people.
• B: Those interested and concerned, but often uncertain how to shop to achieve their ethical objectives.
• C: Aware of the problem, not certain that their actions can have much effect or that they need to shop differently.
• D: Struggling, do not give high priority to issues covered in Plan A.

The company assessed the percentages in each segment as follows:

E.ON cuts the population into five types, not four:

• Type 1: ‘Clued up about environmental issues and recognises the direct impact the UK’s energy consumption has on climate change.’
• Type 2: ‘They believe people are damaging the environment and are taking some tentative easy steps to reduce their impact.’
• Type 3: ‘This segment seems happy for others to save the planet, with their support. They have taken few, if any, steps themselves.’
• Type 4: ‘The issue is generally not that important to them.’
• Type 5: ‘They disagree that humanity is to blame for climate change…They don’t recognise any need to act now.’

Types 4 and 5 seem very similar to Marks & Spencer’s group D: both with about 25-30% of the population. These people will not be receptive to marketing offers that focus on the climate change benefits of a product or service. Type 1 is an extended version of M&S’s group A, less committed than the ‘zealots’ of A, but still well informed and worried. Type 1 people will respond well to green offers. The marketing challenge will be to get people in Types 2 and 3 to match their concerns over climate change with purchasing decisions that match their own attitudes.

During the last year or so, the percentage of ‘green zealots’ in M&S research has risen from 3-4% to nearer 8%. Henley also sees a figure of 8% for the two greenest groups ‘principled pioneers’ and ‘vocal activists’. A further 31% (Henley Centre) or 30-35% (M&S) are actively concerned and want to adjust their behaviour. There has also been a big growth in this group in the last year.

In both surveys another third are aware of environmental and ethical issues, but are unlikely to take active steps unless pushed. A final quarter or so don’t care very much. M&S says that they are ‘struggling’. Henley calls them ‘disengaged’.

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Consumers do not generally see climate change as the most important environmental and ethical issue

M&S’s strikingly ambitious Plan A has five sets of targets. Only one of these relates to climate change. M&S emphasises the hierarchy of consumer concerns that drove it towards the wide spectrum of targets in the 100-point Plan.

1. Food and Health: consumers want food to be made from high quality ingredients, with no additives and minimum amounts of salts, saturated fats and other undesirable ingredients.
2. Ethical sourcing: M&S customers generally want to buy goods that are made and sold under what might be called ‘FairTrade’ conditions. Suppliers are paid properly, workers are not exploited and environmental damage is minimised.
3. Better recycling, less packaging
4. Climate change

M&S commented that Food and Health was ‘way out on its own’ as an issue, but other concerns have been creeping up to match it. Respondents to its surveys are now much better informed about environmental issues but ‘there’s still an awful lot of confusion’.

M&S customer segmentation work throws up 4 groups:

• A: Green zealots: people who will actively seek out the most ethically and environmentally responsible products. Climate change is particularly important issue to these people.
• B: Those interested and concerned, but often uncertain how to shop to achieve their ethical objectives.
• C: Aware of the problem, not certain that their actions can have much effect or that they need to shop differently.
• D: Struggling, do not give high priority to issues covered in Plan A.

The company gives some approximate figures for the numbers in each group compared to the numbers of three years ago.

Marks and Spencer consumer segmentation

The key change in the last few years has been the move from group C to group B. The A family has grown substantially but still remains a small percentage. The strugglers have largely remained in the same group. To put it in simple terms, the mainstream M&S customer has shifted from a C to a B. This makes Plan A seem entirely logical, though I think the company may actually be moving somewhat faster than its customers. Plan A almost seems to suggest that M&S thinks that its core shoppers are just about to shift to Group A.

M&S’s numbers have great similarity to those produced by the Henley Centre in mid-summer.

Henley Centre consumer segmentation

Henley makes the point that consumers in group A will already be choosing their goods and services with care. Group B will tend to make the same purchase decisions, though they may be less vocal about their preferences. Group C will not take active measures themselves, but Henley says that they will not object if companies selling to them ‘edit out’ products that do not meet reasonable ethical or environmental standards. This is consistent with M&S’s view that its customers wanted the chain to take positive actions to improve the environmental attributes of the products its stores sold, even at a small increment in the price.

Perhaps the two main features of these research findings are:

• Trusted brands do have some freedom to take less environmentally acceptable goods and services off the shelf. Three quarters of the population accept that issues such as climate change should affect what is selected by retailers for sale.
• The zealots are growing in number, but don’t yet form a mass market for most products and services. Products like British Gas’s Zero Carbon tariff (covered in Carbon Commentary Newsletter #1) will be taken up by this group, but will struggle to penetrate beyond this demographic.

Separately, Henley comments that the most concerned consumers do not strongly congregate in a particular age group, social class or region of the country. This finding is entirely consistent with other surveys. Boden mums in Surrey may not be any more likely to search out ethical brands than middle-aged male teachers in Gateshead. This makes ethical marketing more difficult because target audiences do not correspond well to well-understood existing demographic segments. It will be interesting to research what TV the zealots watch and which web sites attract their regular attention. My guess is that these consumers are disportionately members of ethical pressure groups such as WWF and Greenpeace. The Friends of the Earth mailing list is going to get more valuable.

Tesco said earlier this year that it would eventually put carbon labels on all its 70,000 food lines. It has been trying to find way of doing this using Life Cycle Analysis, putting a greenhouse gas cost on every element of a product’s move from farm to plate. This was always a hugely over-ambitious project and recent weeks have seen the company drift back from its early optimism. Now Wal-Mart has come up with a similarly impossible dream – to use the Carbon Disclosure Project (CDP) to assess and manage the energy footprint of its suppliers. These big retailers know that they have to be seen to be doing something about greenhouse gases, so they have both launched incomplete schemes that will achieve little.

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Wal-Mart will use the CDP to collect emissions data on all its suppliers.

On Monday 24 September, Wal-Mart participated in the annual presentation of the CDP in New York. On behalf of many of the world’s major investment funds, CDP collects data on emissions from thousands of companies around the world. The funds backing this project manage about half the world’s invested assets, so CDP has increasing clout.

For years Wal-Mart refused to participate in the CDP data collection process. The carbon footprint of the retailer is enormous, and it probably didn’t want the numbers to be widely known. But the company’s conversion to carbon reduction in the last two years has been rapid and genuine. It has committed to power all its stores with 100% renewable energy, a plan far in advance of Tesco or even Marks and Spencer.

Now Wal-Mart is not only taking an active role in the CDP, it has also publicly decided to ask all its 60,000 suppliers to do the same. As we so often hear, measuring carbon output is the first step in the process of reduction.

Wal-Mart’s language is very different to the UK retailers. It consistently refers to the cost benefits of cutting the use of fossil fuels. Tesco might talk about responsibility to the widest group of outside stakeholders but Wal-Mart emphasises the role that energy use reduction can play in reducing supplier costs, and hence prices in the stores. John Fleming, the Wal-Mart executive presenting at the CDP conference, made clear that he didn’t expect the prices of any of its goods to rise as a result of the move to lower emissions manufacturing and distribution. Tesco has said similar things, but with far less conviction in its corporate voice.

How big are the footprints of the largest retailers?
Wal-Mart’s CDP report shows emissions of about 20m tonnes of CO2, equivalent to about 3% of the UK’s total. Tesco reports a figure of 4m tonnes, of which about 2.3m is in the UK. These figures exclude the CO2 output of suppliers and the energy cost of the products when used or consumed. About half of the UK figure is electricity, and another quarter the emissions of the particularly nasty greenhouse gases used in almost all store refrigeration.

M&S does more detailed work on the supply chain. It estimates that its total CO2 output from retail operations and distribution fleet is about 0.6m tonnes. The figure it offers for suppliers is 3m tonnes, or five times as much. If the ratio was the same at Tesco UK, the activities of the company could account for over 10m tonnes of CO2 equivalents, or almost 2% of the UK total. Wal-Mart worldwide would be 100m, or almost one sixth of the total emissions of the UK. Wal-Mart matters, and it makes no attempt to hide this.

The efforts to manage down the total size of the footprint
Until recently, Wal-Mart and Tesco have focused on two areas – packaging and company-wide energy use:

• Packaging: Wal-Mart has said will reduce packaging use by 5% by 2013. Tesco has a much more ambitious target of 25% buy 2011.
• Energy use: Wal-Mart has set itself a challenge of being entirely powered by renewable electricity. Tesco says it will cut energy use by 50% between 2000 and 2010 (and is well on the way to achieving this).

Tesco’s boundary for the calculation of its own footprint

Source: Tesco.com

There have also been competing initiatives on low energy light bulbs (Tesco: 10m in 2007; Wal-Mart: 100m this year) and on using micro-generation at new stores (little more than a token in either case).

The real battle between the two companies is over the carbon footprint of the products that they sell. If Marks and Spencer’s numbers are right, this is unsurprising: the Tesco plan is to label all 70,000 foods sold in shops with a carbon label. Despite the obvious complexity and difficulty of this assignment, Tesco announced its commitment in January 2007. It asked Oxford’s Environmental Change Institute (ECI) to work on a couple of projects to begin the marathon scheme of getting a carbon figure on every packet. A figure of £5m was thrown around as the budget for carbon label work, but this number is no longer mentioned by Tesco or the ECI. By the end of May, ECI team leader Brenda Boardman confessed to finding carbon labelling ‘difficult’ and Tesco called it ‘problematic’.

And problematic it is. The food supply chain is complex and the carbon input to foodstuffs is immensely difficult to calculate. Importantly, it isn’t just CO2 – emissions of nitrous oxide, methane and the fluorinated refrigerant gases all need to be calculated. There is no consensus anywhere in the world on any single issue in the assessment of the carbon footprint of food. It will be decades before any shared understanding emerges and is widely agreed around the world.

Why did such a well-managed company as Tesco dive head first into the empty swimming pool of carbon labelling? The most plausible suggestion is that it had already stamped its authority on nutrition labelling and fought off regulatory challenge over ‘traffic light’ signs on products. One Tesco spokesperson said to me that the successfully rejected ‘red, yellow, green’ label would have put people off buying the worst products. She was apparently unconscious that is precisely what the Food Standards Agency had intended. Similarly, Tesco’s pre-emptive plans for carbon labelling might have forestalled commercially dangerous labels imposed by other agencies. Now carbon labelling is just one of the potential projects at Tesco’s new Sustainable Consumption Institute at Manchester University. The projects at Oxford have finished with a whimper. Tesco still says it will get some labels on its products, but the timescale has drifted far from the ambitious aims of early 2007.

Unsurprisingly, given the debacle over labels in the UK, Wal-Mart has gone a different route. But we will probably see the same unhappy result.

Wal-Mart has teamed up with the UK-based Carbon Disclosure Project not to calculate the footprints of each product, but to measure the energy use of each supplier. This is, at least in theory, a much simpler task. Wal-Mart may have almost as many suppliers (60,000) as Tesco has UK food products (70,000) but merely reading the electricity and gas meters at 60,000 factories is a minute fraction of the effort that would have gone into carbon labelling.

This is what John Fleming of Wal-Mart said at the CDP conference:

Using CDP’s carbon reporting expertise and our own experience with supply chain efficiency…we are working together…to measure our global supply chain footprint and to encourage our suppliers to reduce greenhouse gas emissions

What is wrong with this apparently innocuous scheme?

• The CDP is not set up to be much more than a repository of data. Many of the submissions that it accepts from companies are incomplete, but all the data it receives seems to be published. The CDP is an extremely important initiative, but the Project does not have the skills to use the returns from 60,000 companies in a meaningful way. As Tesco is finding, carbon footprinting is a complicated task that needs to be done by specialists. CDP is no substitute.
• Wal-Mart is probably the biggest single customer for a large percentage of its 60,000 suppliers, but neither it nor the CDP is able to tell how much of the carbon footprint of suppliers should be allocated to the goods supplied and sold to Wal-Mart. A growing company selling an increasing fraction of its goods outside Wal-Mart might have increasing emissions. How will Wal-Mart deal with this? It certainly won’t look good to competition authorities if Asda, for example, puts pressure on suppliers to reduce emissions just because they are selling more to Tesco.
• Wal-Mart said that it would work initially with companies in seven sectors, including soft drinks and DVDs to identify the full carbon footprint. But in most of these categories the main carbon impact is probably further up the supply chain, in the suppliers of Wal-Mart’s suppliers. For example, the manufacture of slab aluminium and then its conversion into cans may well use far more energy than the mixing of the sweet syrup that is the main manufacturing function of a cola company. To be an interesting measurement, all the energy inputs across the whole supply chain will need to be measured. Do this, and Wal-Mart will end up with the same problem as Tesco – an unmanageably complex analytical task even for two of the most competent companies in the world.
• The CDP focuses very largely on carbon dioxide. But CO2 is often not the dominant greenhouse gas in food production. Nitrous oxide and methane on farms are just as important. Measuring these gases, even if Wal-Mart wanted to, is an order of magnitude more difficult than CO2. Some of the same problems also apply to refrigerant gases.

It is very good news that Wal-Mart has decided that there is business logic in reducing the energy use of its suppliers. But, despite its significant strengths, CDP is not a credible partner. The complexity of the methodological issues faced in carbon footprinting means that the partnership is likely to fail. And failure means a further delay in getting greenhouse gases out of the food supply chain.