Greenwashing
Catching Up
Thursday, January 17, 2008 / KW
Time flies when you're having fun, which I guess explains how two and a half weeks have elapsed since we last posted here: Christmas, New Year's Day, college bowl games, a wild and unpredictable presidential primary season, and an exhausting schedule of personal activities seem to have conspired to keep us away from our keyboard for an unconscionable period.
Our apologies. One day we will share with you some of our adventures during the past few weeks, including sitting in on twelve focus groups in four different cities across the United States to learn about the social and political attitudes of the Millennial Generation (under-30 Americans). Biggest takeaway: For the Millennials, the culture wars are over. It doesn't matter whether they are atheists from California or Evangelical Christians from Alabama; their attitude toward people of other religions, philosophies, and sexual orientations is live-and-let-live. Personally, I found this heartening news.
And on the eco-business front, here's a quick roundup of news and ideas you may find interesting — we did.
Seeds as intellectual property. Check out Grist, a green-oriented website we somehow didn't know about until recently, which actually lives up to its promise of "Environmental News and Humor." (Yes, they are funny . . . when appropriate.) One of the more intriguing stories currently up on Grist is this account of how Monsanto's genetically-modified soybean seed business has put the company in the awkward position of suing farmers for unauthorized use of the intellectual property represented by those patentened gene sequences. And although the Supreme Court recently upheld one of Monsanto's legal victories, it doesn't strike us as a sustainable business strategy to be taking your own customers to court. In the long run, it won't work for the record companies, and it won't work for Monsanto either.
Creating a commons for eco-friendly thinking. By contrast with Monsanto, a consortium of companies, including IBM, Nokia, Pitney-Bowes, and Sony, is participating in a system for openly sharing intellectual property (specifically patents) with environmental benefits. As described here, this system, organized by the World Business Council for Sustainable Development, encourages corporations to donate green-business patents for free use by other companies. For example, one of the patents being made available by IBM is for a less-polluting method of cleaning surfaces that the company designed for microchips but that might be useable for other products such as eyeglass lenses. (You can watch a video about it on YouTube.)
Obviously, there will be significant limitations to the kinds of patents companies will be willing to share. Patents related to a company's core business processes, those that provide a significant competitive advantage, and those with the potential to generate large licensing fees will probably not be donated to the Eco-Patent Commons any time soon. But it's very interesting to see some of the world's most innovative companies taking this fresh approach to managing the intellectual property they create. We'll be watching to see how significant an impact they have.
More on greenwashing. There's a new attempt to distinguish legitimate environmental claims by companies from illegitimate ones, following on the heels of the controversial "Six Sins of Greenwashing" report that we wrote about here. This new initiative is called The Greenwashing Index, and although I've spent quite a bit of time studying the site and trying to figure out how it works, I'm still rather confused. The idea seems to be that consumers can post ads on the site and rate them, on a scale of one to five, as to their honesty and accuracy. A score of one means a "good ad," and score of five "total greenwashing."
What puzzles me, though, is that the ratings seem to be very subjective. Although the organizers of the site have provided a set of five criteria that consumers are supposed to use, in the end anyone can post an ad on the site with whatever rating they want. It's not unlike the one-to-five-stars rating system for books on Amazon. Of course, the accumulation of many ratings from various individuals for a single ad should mitigate the subjectivity somewhat. But this system still seems to me an inadequate substitute for the hard word of actually examining and evaluating the environmental practices of a company — something that demands a degree of expertise that few ordinary consumers possess.
We'll keep an eye on the Greenwashing Index site. It'll be interesting to see how it develops over time. But somehow I don't think this will become the authoritative source for reliable evaluations of environmental claims that so many people seem to be looking for.
The Other Side of Greenwashing — "Greenmuting"
Wednesday, December 26, 2007 / KW
As the debate over what is or is not greenwashing continues (our contribution to the discussion can be found here), Scot Case of TerraChoice points out this thought-provoking post by Bob Langert on the McDonalds corporate blog:
I agree there are dangers associated with environmental marketing, but I actually think many companies are reluctant to talk about their environmental efforts because they are concerned they will only be met with criticism. After all, true progress is hard to define, and achieving perfection on the environmental front is impossible, because there will always be ways to improve.
But not talking about environmental efforts, or "greenmuting", can be a sin as well.
Langert goes on to provide his own list of the "Six Sins of Greenmuting," which basically involve companies' reluctance to publicly engage environmental issues at all out of fears they will get burned. As Langert, in effect, points out, as pressures to be socially and environmentally responsible continue to mount, you are likely to get burned sooner or later, one way or another; but if you get out in front of the issue and communicate freely about your honest efforts to do the right thing, the burns you suffer will almost surely be less severe and faster-healing (to push the "burning" metaphor perhaps one step too far).
An interesting case in point comes from the blog of hotelier Bill Marriott. Marriott recently wrote about his company's efforts to make their corporate headquarters greener, involving recycling, energy conservation, and other initiatives.
What's interesting is that Marriott's post has drawn a few dozen comments — some of them thanking Marriott for his company's environmental efforts, but others offering criticisms from every possible direction. Some complain that the headquarters building is just the tip of the corporate iceberg ("How about the thousands of hotel rooms that leave lights on! As a Platinum client (over 100 nights a year... mostly Toronto Airport) I found out that all lights and music in your suites are put on at 2pm!!"); others say that customers ought to receive some of the financial benefits from environmental cost-saving ("Please put your money where your mouth is — if you want your customers to save water, than show them some green!"); others worry that worthy issues such as comfort may be getting short shrift ("Look at the way the poor soul in the picture is sitting. Can someone please find him a keyboard tray, with a proper mouse surface. Why not green and healthy — that's the ticket!"); and still others disdain the whole concept ("the efforts to reduce greenhouse gases is misguided and ill informed. The latest research does not point to man as the cause of a changing climate, the Intergovernmental Panel for Climate Change and Mr. Gore's film notwithstanding").
If I were Bill Marriott, my reaction to this barrage of often-contradictory advice might well be to throw up my hands and wonder, "If this is what I get for trying to do the right thing, why do I bother?"
But of course that would be a short-sighted and counter-productive reaction — though perfectly human and understandable. And to Marriott's credit, I see no sign that he or his company are in fact responding that way.
I think they recognize this as one of the perennial truths of business (and of life): Anything good you do quickly gets taken for granted, and the conversation is always about "What's the next good thing you are going to do for us?" The only way to avoid criticism — well-founded or not — is to do nothing at all. And where's the fun in that?
The Sins of Greenwashing — A Good Idea Pushed Too Far
Monday, November 26, 2007 / KW
This report from TerraChoice Environmental Marketing, Inc., has been drawing a lot of attention in environmental and business circles. Titled "The Six Sins of Greenwashing," it's based on a study of over 1,000 products sold at big-box retailers, each of which made some sort of environmental claim. The startling findings: Out of 1,753 environmental claims, only one was found to meet the researchers' standards of accuracy and verifiability.
Based on this analysis, the report's authors conclude that "greenwashing is pervasive," posing a serious danger that consumers will be confused, misled, and ultimately driven to cynically disregard all environmental claims as meaningless or dishonest.
I have no doubt that greenwashing is, in fact, pervasive, and that many companies are guilty of exaggeration, obfuscation, and distortion when making environmental claims. (After all, the same is true in almost every other area of marketing and advertising.) But I also think the conclusions of the "Six Sins" report are just a trifle overblown, and that the authors have themselves succumbed to the temptation of stacking the deck in order to make a serious problem appear even more alarming — a bit of the kind of hype they accuse corporate marketers of practicing.
My doubts are based on what I see as the shaky basis of one of the "Six Sins of Greenwashing" outlined in the report. As summarized on Joel Makower's blog, the six sins are:
Sin of the Hidden Trade-Off — claims that suggest a product is "green" based on a single environmental attribute (the recycled content of paper, for example) or an unreasonably narrow set of attributes without attention to other important, or perhaps more important, environmental issues (such as the energy, climate, water, or forestry impacts of paper). Such claims aren't usually false, but paint a misleading picture of the product than a more complete environmental analysis would support. This was the most frequently committed "sin," made by 57 percent of all environmental claims examined.
Sin of No Proof (26 percent of all claims examined) — any claim that couldn't be substantiated by easily accessible supporting information, or by a reliable third-party certification. TerraChoice determined there to be "no proof" if supporting evidence was not accessible at either the point of purchase or at the product website.
Sin of Vagueness (11 percent of all claims examined) — any claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the intended consumer, such as "chemical free" or "all natural."
Sin of Irrelevance (4 percent of all claims examined) — claims that may be truthful but are unimportant and unhelpful for consumers, such as CFC-free products, since ozone-depleting chlorofluorocarbons have been outlawed since the late 1980s.
Sin of Lesser of Two Evils (1 percent of all claims examined) — environmental claims that may be true, but that risk distracting the consumer from the greater environmental impacts of the category as a whole, such as organic tobacco or green insecticides.
Sin of Fibbing (less than 1 percent of all claims examined) — claims that are simply false, typically by misusing or misrepresenting certification by an independent authority, when no such certification had been made.
Now, some of the "sins" listed here are genuine misdemeanors. Obviously lying about a product's environmental qualities (the Sin of Fibbing) is an absolute no-no. And making product claims that are true but fundamentally meaningless (the Sin of Irrelevance) is almost equally dishonest. TerraChoice is dead-on in criticizing companies that are guilty of these sins. And they are also right to suggest that companies making environmental claims ought to provide clear definitions and proof of their claims. So far, so good.
My problem is with the first of TerraChoice's sins — the Sin of the Hidden Trade-Off. Here we get into murkier territory, where the "greenwashing" label seems much more dubious.
It's undoubtedly true that judging the "greenness" of a product or company is a complex, many-layered process. It's also true that, in the final analysis, the environmental impact of an organization can only be measured by examining a whole host of issues, including the ones TerraChoice mentions — energy use, effect on global warming, and so on.
But does that make it fair to describe any less-comprehensive environmental claim as "greenwashing" — in effect, accusing the company that makes it of dishonesty? I don't see it.
To use one of TerraChoice's own examples: If a paper company truthfully describes a product (copy paper, for example) as being made from recycled materials, but doesn't also report its policies and practices in regard to (say) water consumption, does that make the "recycled materials" claim greenwashing? I don't see how.
Here's an analogy. A wealthy businessperson donates a million dollars to a local art museum. Accordingly, his name is carved in the museum lobby on a list of "Generous Benefactors." Now, suppose that businessperson also happens to be a stingy employer — pays lousy, provides no health benefits. Does that falsify the claim that he gave generously to support the museum? Clearly not. He's not a very nice guy — but he did support the museum, and there's nothing dishonest or misleading about carving his name on the lobby wall.
In its Sin of the Hidden Trade-Off, TerraChoice is saying, in effect, that any product claim regarding the environment is illegitimate unless the company making the claim has also performed a complete analysis of all its environmental policies and practices, and can demonstrate that those policies and practices meet or exceed current "green" standards. That strikes me as unreasonable.
And since this "sin" is by far the most prevalent one in the TerraChoice study, representing fully 57 percent of the sins they uncovered, it seems to me that this bit of shaky logic seriously undermines the very sweeping conclusions trumpeted by the study's authors.
The soundbite version of the report seems to say, "We investigated 1,753 environmental claims, and found that 1,752 of them were lies." But in fact the report merely says, "We investigated 1,753 environmental claims, and found only one of the companies making these claims had provided the details of a complete self-analysis which demonstrated that their environmental practices were of a high quality."
That statement is a lot less dramatic-sounding — but it's more accurate.
Am I nit-picking? Maybe so. But I think there are real dangers in the slightly inaccurate soundbite version of the report. By implying that virtually every company making environmental claims is lying (or at least blatantly distorting the truth), TerraChoice is encouraging cynicism among consumers and the media. It is also (unintentionally, I'm sure) lending support to the extreme right-wing view of environmentalism as phony, self-serving hype whose real purpose is to mislead and exploit innocent citizens and consumers.
Don't get me wrong, I'm all in favor of having companies perform complete and credible environmental audits, and I agree that activists and engaged consumers should examine the results of such audits when seeking eco-friendly companies to do business with. But it seems counter-productive to brand any company that doesn't yet meet this standard as a "greenwasher" deserving nothing but public contempt.
Rather than advancing the cause, pinning a "99 percent dishonest" label on companies' environmental efforts will encourage most consumers to throw up their hands in despair and simply disregard eco-claims in the future.
Claims by Eco-Skeptics Deserve Skeptical Scrutiny, Too: Business Week's Take on Energy Credits
Tuesday, October 23, 2007 / KW
Ever had the experience of reading a newspaper or magazine article dealing with a topic or an event you have intimate personal knowledge about? If so, I bet you've had the same reaction as me: Surprise and dismay over the number and seriousness of the mistakes and misunderstandings that even good journalists working for reputable publications commit. It's a sobering experience, one that leaves you wondering how many errors riddle all the other articles we read every day dealing with topics we don't happen to know about personally.
An interesting case in point is this story in the current Business Week about a green business skeptic named Auden Schendler. He gains credibility because of the fact that he is a self-proclaimed "convert" to this position, having been a long-time advocate of green business efforts. Schendler is getting a lot of press — including of course the BW article itself — for declaring that environmental initiatives by companies can rarely pay for themselves, let alone boost profits. In particular, Schendler takes a jaundiced view of renewable energy credits (RECs), and the BW article devotes a lot of space to "debunking" the use of such credits.
We don't have a lot of personal knowledge about the cases cited by Schendler (and by Ben Elgin, the author of the BW article), although we'd join some of those who commented online in expressing a bit of skepticism about an article that relies heavily on the experience of a single ski resort in broadly asserting that the eco-business movement is based largely on "little green lies."
More interesting is the reaction to the article from one of the businesses cited in the article, Johnson and Johnson, as expressed on their corporate blog. Here's what blogger Marc Monseau, who works in J and J's corporate communications department, had to say:
Johnson and Johnson wasn't a big part of this article, but having sat through the lengthy interviews that our folks did with Ben [Elgin] (at his urging), I was staggered by how he characterized the company's efforts and how little context he included about all that it has done over the past 30 years to conserve energy and — more recently — to reduce emissions.
Monseau describes some of the corporation's environmental initiatives dating back to the 1970s, then notes:I was particularly peeved when Ben failed to mention any of this when he pointed out that:
Johnson and Johnson has proclaimed a 17% reduction in carbon emissions since 1990, based largely on RECs. Without the credits, the pharmaceutical giant has seen a 24% increase.
That's true... apart from the fact that Johnson and Johnson is not merely a "pharmaceutical" company... but it also fails to tell the whole story.
During that same time frame the company increased sales by 372%, bought new businesses and expanded operations throughout the world.
As a corporate PR specialist, Monseau is obviously disappointed that the whole positive story about his firm didn't turn up in the BW article. (By that standard, PR specialists find practically every magazine article disappointing.) But I think the context Monseau offers for the one statistic about J and J that BW chose to mention is really crucial.
At first blush, a 24 percent increase in carbon emissions since 1990 does sound significant. And contrasted with the company's claimed 17 percent reduction, it almost makes J and J sound dishonest or hypocritical. But in fact a mere 24 percent increase in emissions over a time period when the company grew more than threefold is extremely impressive and amounts to a notable reduction in emissions when measured on a per-revenue-dollar basis.
Ben Elgin's elision of that context strikes me as downright misleading. And while this one fact certainly doesn't demolish the article's entire argument, it leads one to question whether the author has a bias, conscious or unconscious, that led him to cut logical corners elsewhere in the piece.
(The bias needn't be an anti-environmental bias, although that would be the obvious assumption. It might just be the "bias" that most writers share for information that is striking, eye-opening, and controversial...even if the startling implications might not be quite so newsworthy on fuller examination.)
In this day and age, most people have learned to approach the media with a healthy degree of skepticism. Yet sometimes we let down our guard a bit with stories that take a "contrarian" or "counter-intuitive" perspective, as the Business Week story does, positioning itself as a challenge to the conventional wisdom about green biz.
Fair enough: Conventional wisdom should always be challenged. But even "contrarian" articles deserve skeptical scrutiny. In the months to come, we can expect to see more and more "backlash" articles that attempt to poke holes in the case for sustainable business. They should be tested against the facts just as rigorously as articles on the other side.
Time To Peel the Smiley Sticker off Your Sustainability Report
Tuesday, August 14, 2007 / KW
If your company is among those that have begun monitoring and reporting information about your sustainability efforts, good and bad, for the benefit of your stakeholders and the general public, congratulations. And if you take the job seriously enough to have adapted the guidelines established by the Global Reporting Initiative (GRI), congratulations again. You're among the corporate vanguard that are leading the way on making sustainability a routine and important part of the business conversation.
Now it's time to take the next step: Talking just as honestly and realistically about the risks, threats, and problems you face on the sustainability front as you do about the opportunities you are embracing.
This article from the World Business Council for Sustainable Development highlights a recent study of 50 sample GRI reports from companies around the world. The study found that most companies shy away from addressing or even mentioning the downside of today's leading sustainability issues. For example:
The report finds that 90% of surveyed reports include climate change. However, only 20% of the studies reports mention any risks to their businesses from climate change. This lack of information on risks is in spite of evidence from a number of sources, including the UK government's Stern Report on the Economics of Climate Change, that say that climate change has serious ramifications for the world's economy,
Carbon emissions trading and credits, the report concludes, are the most focused on as new businesses opportunities created by climate change. Other opportunities from climate change vary widely from sector to sector, and include hybrid cars to energy efficient detergents.
The risk that was mentioned in the reports most often is the increase of energy costs, with about 20% of sustainability reports mentioning rising energy bills. Very few companies mentioned the risk of increased legal action, such as the risk of class-action lawsuits with regard to climate change.
It's understandable that corporations should want to emphasize the positive aspects of their sustainability efforts. Putting a happy face on the news, whatever it may be, is a common feature of corporate culture. (We know some companies where the word "problem" is practically forbidden; there are only "opportunities.") And particularly today, in the early days of the sustainability reporting movement, sustainability officers may be under pressure to accentuate the positive (i.e., the new businesses and new profits to be built around sustainability) rather than the negative, in order to justify the value of the sustainability concept.
Nonetheless, it's obvious that, in business as in life, there are practically no positives without corresponding negatives. And that certainly applies to sustainability. Take global warming as an example. Can you imagine a food company that isn't thinking about how climate change may affect their supply chain in the coming decades? A real estate developer that isn't looking at the effects of coastal flooding? A home supply company that isn't examining how water shortages and heat waves will impact house and garden designs? And that's not even to mention more obvious examples, from energy companies to utilities to transportation companies, all of which will be under enormous pressure to redesign their businesses as the cost of carbon emissions continues to climb.
Let's put it this way: None of us would want to invest in a company that is so short-sighted that it is not exploring the risks posed by global climate change. So why shouldn't companies discuss those risks — and the steps they are taking to cope with them — in their sustainability reports? To do so will only enhance their credibility.
Honest, realistic risk assessment may be the next big frontier in the world of sustainability reporting. You should be thinking about it now, as you begin planning for next year's report.
