October 2008 Big Grower

Greenwashing: Keep it Clean! By Visions Group

Businesses making claims about their goods, products or services need to understand what they can and cannot say. The recent surge in "green marketing" has left many firms searching for the right words to demonstrate and sell the environmental benefits of their products. The Advertising Standards Authority of the United Kingdom recently cited Shell for misleading the public in an ad in the Financial Times by branding its Canadian oil sands operation as "sustainable." It was ruled that, in the context that Shell used it, "sustainable" was unclear and ambiguous.

Green marketing terms remain ill defined, and as yet, no one has attempted to codify what advertisers can or cannot say when promoting the environmental benefits of their products. Terms like "low carbon," "carbon neutral" and "environmentally friendly" are not interpreted identically by all people. Until there is an accepted code guideline for green claims, make sure you are precise in the claims you attach to your products. Qualifying for certification under one or more of the defined standards available and administered by an independent third-party certification organization is an excellent way to define and authenticate your claims to your employees, customers, community and industry.

Avoid Greenwashing Your Customers

Almost every organization is trying to claim that they're aligned with sustainability. In a rush to brand and advertise green, many companies run the risk of "greenwashing," the perception by consumers or activists that a company's environmental claims are unfounded. Here are three "greenwashing" practices that every business should avoid:

1. Ad Busters: When an advertising program overplays the relative significance of a "green" program or product compared to its actual business practices.

2. Political Spin: Talking green but lobbying for legislation that benefits the business but not the environment.

3. It's the Law, Stupid: When a business takes credit for actions that are mandated by law.

Here's a list of how green activists — or almost anyone — can identify companies involved in greenwashing:

Follow the money. Monitor the scale of expenditures made by corporate interests versus environmental interests.

Track membership. Identify which special-interest groups a company belongs to and whether this special-interest group advocates sustainability.

Test for access to information. Consumers are asking for more information to educate themselves on sustainable practices. Ease and availability of information is an important test.

Performance. Activists usually have zero tolerance for and expect strict adherence to sustainability principles. Consumers view it more as a work in progress and a learning experience — but still expect a real commitment.

So what does this all mean for the company that is truly committed to becoming sustainable, has developed products and services that qualify as "green," and wants to leverage them by promoting and advertising those efforts and products? Let's look at three take-home lessons:

1. Don't B.S.: During the green educational process, consumers will not forgive or forget those companies who betray their trust with B.S. that benefits the business at their expense or even the expense of the government.

2. Design consumer-driven sustainable business practices: Sustainability is almost a grassroots phenomenon of consumers seeking a lifestyle that contributes to energy independence and reduces the risk of harm to the environment. Thinking outside the box can present great opportunities as consumers search for innovative green solutions from credible suppliers.

3. Reach out: Because sustainability is still developing, it's unlikely that any one management team will have all the answers. But information gathered from the various groups of stakeholders and then assimilated will likely allow you to develop a comprehensive list of answers. Get feedback from associates, consumers, vendors and leaders to develop sustainable products that will fill the $4 trillion demand for green products and services.

Above all, follow the new Golden Rule: "Sincerity leads to success in the emerging world of green marketing."

Wal-Mart Consumers Take Green Mainstream

Recently Wal-Mart released new consumer research that indicates shoppers are considering the environment when making a purchasing decision. The announcement indicated an adoption-rate increase of 66 percent from last year in its "Live Better" index, which tracks consumers' decisions to purchase eco-friendly products. This growth in their sustainability index indicates that concern for the environment has a growing presence in the shopping carts of the retailer's 200 million annual customers.

The "Live Better" index features five products that were selected because consumers can make a conscious decision to purchase them for their environmental and cost-saving benefits versus other products in the same category. The five products the index tracks, their adoption rates over the past year and the state that leads the category are shown in the table to the left.

To reflect the growing consumer preference for eco-friendly products, Wal-Mart will also add sustainably produced coffee and eco-friendly cleaning products to the "Live Better" index.

"When the sustainability 'Live Better' index was established, we wanted to help Americans understand that environmental choices were accessible and affordable for everyone," says Stephen Quinn, Wal-Mart's chief marketing officer. "The fact that product adoption has increased dramatically in one year shows that the decisions our customers make in the aisles — coupled with Wal-Mart's commitment to providing eco-friendly choices at the best value — are helping consumers and the planet live better together."

Now, will consumers pay a premium for their environmentally friendly products?

What Are Consumers Willing to Pay for Green?

Most Americans think global warming is real and a serious concernÉbut don't ask them to make personal sacrifices to help fight it.

Public attitude toward global warming has changed dramatically in the last decade. Results from a recent poll found 35 percent of respondents said global warming was a serious problem requiring immediate action compared with 29 percent last year and 23 percent in 1999. According to another recent poll by ABC News/Stanford University/The Washington Post, 94 percent of respondents were willing to make changes in their lives to help the environment. But it seems that they are willing to make those changes only if it doesn't affect them too much.

The same poll found that only 45 percent were willing to alter their lifestyle if it required a personal inconvenience. Although recycling has been around for years, with company and municipal programs available to almost everyone, the percentage of adults who voluntarily recycle newspapers, aluminum, motor oil and other products has remained about the same in the past 10 years. The total percentage of consumers who purchase products because they believe they are better for the environment than competing products actually declined 2 percent from 2004. Americans apparently think they should be environmentally conscientious in their day-to-day lifestyles, but only within certain limits.

But there are signs this may be changing: In a recent Gallup poll, a majority of those surveyed said they personally should be using fluorescent light bulbs, installing solar panels in their homes, and using mass transit or buying more fuel-efficient vehicles. But most people also think they should lose weight, exercise more and read more, and they don't do those things either. It is this type of apathy that seems to make consumers hesitant to spend money on green products that cost more than their mainstream alternatives.

Federal policies to combat global warming would draw majority support, according to a Stanford University survey. The poll tested the attractiveness of three options: federal mandates telling businesses exactly what they must do to reduce emissions, a government-imposed tax on greenhouse emissions, and a cap and trade system where the government requires emission cuts and issues companies permits limiting greenhouse-gas emissions. Unused capacity could be sold to other companies. Overall, the results were much higher favoring a federal mandate over an emissions tax or cap and trade system. According to a BBC poll, a majority of U.S. residents think that human activity causes global warming and that major efforts should be made to correct this. Deciding what, when, where and how seems to be the issue.