Let’s Paint the Town Green

Interbrand recently launched its annual list of the Best Global Green Brands in 2012, a ranking of the world’s top 50 green brands evaluated on the basis of both their sustainability performance as well as the public’s perception of green credentials. Interbrand’s belief that the Best Global Green Brands lie at the intersection of perception and performance has led to their unique gap analysis methodology which subtracts an overall perception score from an aggregated performance score. While the overall ranking involved a penalty discount factor for brands given more credit than action merits, Toyota still managed to score first place for a second year in a row, for improving from -7.64 to -2.56. This is where the issue begins; eighteen of the 50 brands listed have a negative gap; in other words, their public perception exceeds actual performance.

Understanding that Interbrand’s focus is more on building a green brand than the actual results of their greening initiatives, it is still disappointing to see that almost 40% of their top brands are perceived as being more environmentally friendly than they are in reality. While it is promising to see so many global companies successfully balancing the triple bottom line, it often appears that companies spend more effort and capital promoting the “greenness” of their brand than actually investing in environmentally sound practices, which is the behavior known as greenwashing.  For the purposes of this argument, let us define greenwashing as the intentional advertisement that a product or the manufacturing of the product has been altered to reduce environmental impact and/or provide benefit to the consumer. This is typically accomplished through advertisements or packaging that evokes environmentally-friendly imagery, or green descriptors such as “organic” and “all-natural”, in many cases where little to no attempt has been made at lowering the environmental impact of the product.

The act of greenwashing is not restricted to one industry, and can be seen in air travel, automobile, and the hotel industry. However, the most outrageous forms of greenwashing can typically be seen on the aisles of grocery stores in the form of new, brown packing or the liberal use of the terms “organic” and “all-natural”. In 2009, Terra Choice Environmental Marketing released their second Seven Sins of Greenwashing report, which found that 98% of products reviewed commit at least one sin of greenwashing. Typically, children’s toys, baby products, food, cosmetics and cleaning products are the most susceptible to greenwashing. The report calls out blatant examples, such as products advertised as CFC-free. CFCs (chloroflourocarbons, also known as freons) have been banned from consumer products since the 1970s. NPR identified a Welsh company which attempted to make their product stand out by labeling bottled water as organic, but the USDA Organic Trade Association definition, which defines the term in reference to agricultural products in this country, specifically excludes water and salt. Products such as Wesson Oil and Frito Lay Chips take advantage of the term “natural”, although they are produced from Genetically Modified Organisms, and can do so legally because the FDA does not define the term. Technically, arsenic, uranium, and mercury are all-natural too.

While the FDA has not yet defined terms like “natural” for regulatory use, the Federal Trade Commission has published a voluntary list of guidelines for environmental marketing claims. However, this preliminary set of guidelines, coupled with the handful of lawsuits, has not been enough to disincentivize companies from greenwashing practices, especially when American consumers spend an average of  $25 billion each year on natural or organic food alone. The demand for environmental marketing is so great that natural and organic food design makes up about 10% of the design business for grocery store products, and has grown by more than 20% annually since 2000.

But greenwashing is not confined to household products. The energy and car manufacturing industries have been heavily criticized for their claims of clean coal and environmentally-friendly cars. Norway’s Consumer Ombudsman Official Bente Øverli defended the country’s strict regulation of car advertising, “Cars cannot do anything good for the environment, except less damage than other [cars].” Maybe someone should tell the Lorax, Dr. Seuss’s beloved voice of environmentalism, who has recently given the Mazda cross-over vehicle the “truffula tree seal of approval.” Even the 2012 London Olympics were not safe from accusations of greenwashing.

So how does the average consumer protect him or herself from falling victim to misleading claims of organic, natural, environmentally-friendly products? According to one prominent New York advertising consultant, greenwashing will be controlled naturally in the next few years by the public. She predicts that “green identifiers” —such as harvest graphics, matte-finish bags, and muted yellow and brown tones — will last another 5 years before “green-elite” or trend-setting food consumers will begin to demand companies provide more information about environmental impact across the entire supply chain and labor practices. From there, mass market consumers will begin reading labels instead of basing their purchase decisions on easy identifiers, eliminating the need for government interference and/or third-party certification. But this solution relies on manufacturers to provide potentially damaging information with little to no incentive, especially when greenwashing is so pervasive, and the payoffs so tangible. If the manufacturers do respond to public demand for information, there is nothing preventing them from displaying misleading green identifiers in addition to the “nutrition-label” style of environmental-impact information.

It probably won’t change consumer behavior either. After all, McDonalds is required to provide detailed nutritional information, but that hasn’t stopped the sale of 560 million Big Macs each year in the United States.  The average consumer would rather receive and believe information pushed to them than research and pull the information. Isn’t that why good advertising is so successful to begin with?

Because the Federal Trade Commission has already established a preliminary list of rules for environmental marketing, it seems the most logical choice for taking on the role of regulating greenwashing. But with these practices now cutting across industries, it seems impractical for one agency to reasonably regulate false claims in travel, food, household products, and building materials. Additionally, it is unreasonable to believe that any one agency has the institutional knowledge or the resources and personnel required to regulate false green advertising within their unique sector,e.g. FAA covering travel, FDA or USDA regulating food products, etc.

If manufacturers will not self-regulate and the government does not have the resources or existing knowledge to control misleading and false green advertising, the solution must be third-party certifications. This solution has been hugely successful in assisting consumers with determining which products support fair trade regulations. Independent, third-party organizations such as the Organic Trade Association should develop rigorous, standardized guidelines for organic agricultural products. Perhaps other independent organizations, such as AAA for auto travel, could develop their own set of environmentally-friendly and industry-specific travel guidelines.

If consumers are willing to pay a few more dollars to support products that reflect their principles and provide a safer, chemical-free home for their families, let’s get the standards in place to ensure the money is not wasted on false claims.