Greenwashing or Hogwashing: It’s a Dirty Business…

“Greenwashing” is what you get when you combine the words “green” and “whitewashing” or when a company uses environmental trends to its benefit by lying or misleading its customers. First coined in the mid-1980′s when hotels started claiming that by reusing towels you could save the environment…

Greenwashing is the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product, service, technology or company practice. Greenwashing can make a company appear to be more environmentally friendly than it really is. It can also be used to differentiate a company’s products or services from its competitors by promising more efficient use of power or more cost-effective.

Consumers researching their buying decisions can consult the National Advertising Division (NAD) of Council of Better Business Bureaus (CBBB), which administers a system of voluntary self-regulation for the advertising industry. Online, site likes coopamerica.org, treehugger.com, corpwatch.org, greenbiz.com and others provide additional assistance. As blogged by Marketing Green, social bookmarking Web sites like DotheRightThing.org are allowing consumers to rate the actions of companies based upon the perceived positive or negative environmental impact.

In the article “Green” Hypocrisy: America’s Corporate Environment Champions Pollute The World” by Ash Allen at 24/7 Wall St. writes: “A majority of America’s largest companies have become part of the “green” movement. Some have fleets of hybrid trucks. Others install solar panels on their large buildings to consume energy more cost effectively with less of an impact on the environment.  Many give generously to environmental non-profit organizations.

The irony of the “green” movement of US companies is that many of the firms that spend the most money and public relations effort to show the government, the public, and their shareholders that they are trying to improve the environment are also among the most prolific polluters in the country.  Pollution does not mean that the companies are doing anything illegal. Instead, it simply refers to natural consequence of the companies’ industrial efforts which result in contamination to the air, soil or water by the discharge of substances that are toxic to the environment”…

At the heart of greenwashing is a company’s desire to represent its business as environmentally friendly at the expense of honestly portraying their environmental character. Common methods used by corporations include advertising, press releases, and websites.  Less obvious methods that are equally pernicious include trade groups that lobby the public on the company’s behalf, touting the adoption of non-governmental standards serving environmental protection, and establishing endowments for green academic research…

In the article “Is the Corporate World’s Patina of Green, a Sea-Change, or a Course Correction?” by Keith Johnson writes: This is the question that Joel Makower, green business guru, set out to answer with his State of Green Business Report…His verdict: It’s a mixed bag…“We’re more or less treading water,” he writes: “Greenwashing” is a buzzword in ascendance: when companies over-tout what they’re doing for the environment in order to win points with consumers. In response, environmentalists, regulators and media are increasingly scrutinizing what companies are claiming in the green arena.

Wal-Mart got the green gospel in 2004—at least in part on the advice of management consultants—and since then they’ve been on a mission to preach the company’s environmental efforts…So far, the retail giant has taken steps to trim energy use in stores, its trucking fleet, and its supply chain, with some success.  Critics like Wal-Mart Watch take aim not just at the retailer, but at the whole economic model supporting it. Wal-Mart Watch argues the retailer’s efficiency gains are more than offset by its relentless growth, featuring ever-bigger-box stores in ever-more-remote places…

In the Commentary: Greenwashing puts Businesses in Danger by Matthew R. Wilmot at the firm Schwabe, Williamson & Wyatt PC writes: All industries should make sure that their green claims are valid and substantiated. Greenwashing comes in many forms and is engaged in by companies in a variety of industries. For example, a carpet company offers for sale a single type of carpet that contains 70 percent recycled content, with all other carpets being of a much lower percentage.

The company then markets its carpets as containing up to 70 percent recycled content. This statement is arguably a form of greenwashing because, while technically true, it tends to deceive consumers. Similarly, a product that claims to contain 50 percent more recycled content than ever before is unfairly deceptive because the statement could technically be true even if the manufacturer only increased the product’s recycled content from 2 percent to 3 percent.

The Federal Trade Commission is beginning to pay more attention to deceptive advertising claiming environmentally friendly or sustainable products or services. Under Section 5 of the Federal Trade Commission Act, the FTC is authorized to police deceptive marketing claims, including bringing law enforcement action against companies the FTC finds to have engaged in unfair or deceptive practices. Companies found guilty of deceptive and unfair advertising and marketing practices are subject to potentially significant fines…

The FTC has issued the Guides for the Use of Environmental Marketing Claims (Green Guides). Green Guides sets forth a variety of rules and restrictions on green marketing and requires all marketers making express or implied claims regarding the sustainability of their products have a reasonable basis for their claims. When it comes to environmental claims, a “reasonable basis” might require competent and reliable scientific evidence, including, without limitation, tests, research, analyses or studies. Thus, a company that overstates the environmentally friendly nature of its products or services may run afoul of the FTC’s rules on deceptive environmental marketing…

In the article “Is Greenwashing Good for Business?” by Auden Schendler writes: The reality is that U.S. consumers increasingly take into account the environmental and social impacts of products and manufacturers. One Roper Survey showed that two-thirds of consumers say that if price and quality are equal, they are likely to switch to a brand or retailer associated with a good cause.

And according to the Lifestyles of Health and Sustainability Journal (LOHAS), in 2008, market was $300 billion in the U.S. which represents a 36% increase over 2005. Meanwhile, for businesses like oil companies that require local and government approval for exploration, a green image provides “license to operate.” If drilling is inevitable, then give the contract to the oil company that has a green reputation. However, it’s not always clear who’s greenwashing and who’s for real.

In the article “Greenwash: A Way to Say Hogwash” by Jonathan D. Glater writes: More and more developers have endorsed green construction, planning buildings that are energy-efficient wonders made with recycled materials. But, how can anyone be sure that a particular carpet really was made from old trash bags, that a redwood did not die for that deck, that a pump in an air-circulation system was a high-efficiency model?

The danger is what Anthony Bernheim, an architect at SMWM in San Francisco, calls “greenwash.” “Greenwash is when somebody says that, ‘Oh, we have the greenest building in town,’ and they do not have the metrics to show it”…

Glater continues: The U.S. Green Building Council, a nonprofit group, promotes energy efficiency and other environmental benefits in construction and design, and has established criteria to measure how green buildings are. “The way that we have tried to build better buildings and affect building stock is to create a rating system that recognizes certain characteristics of the building, including products, materials and technologies,” said S. Richard Fedrizzi, chief executive of the council. But he added, “For the most part, today we are relying on the honesty and the integrity of the manufacturers of those products and systems and services”…

In the article “Green Marketers Are Still Sinning” by Andrew Winston, Harvard Business Review, writes: The green marketing research firm Terrachoice released its annual “Sins of Greenwashing” Study where it explored 34 stores in Canada and the U.S. (from chains that have over 40,000 locations) and looked for any product that made a green claim…

The Study comes to one interesting conclusion; larger retailers apparently have a lower percentage of greenwashing products than boutique and specialty green stores. Terrachoice uses that data to conclude that larger retailers are more trustworthy…

In the report, “Understanding and Preventing Greenwash: A Business Guide,” lays out a “greenwash matrix” of the different types of poor communication about corporate environmental activities, and explores the ways firms can move toward messages that more clearly explain their green works. “[Shoppers] want to trust the company from which they are buying goods and services, and honest communications are key,” said Diane Osgood, BSR’s Vice President of CSR Strategy, in a statement. “Our guide helps companies curtail greenwash and build the trust of consumers.”

In the article “Ben & Jerry’s Backs Off ‘All Natural’ Claims” by GreenBiz Staff writes: In the wake of a complaint filed by an advocacy group, “Ben & Jerry’s Ice Cream” will remove the phrase “all natural” on its products that contain partially hydrogenated soybean oil and other questionably natural ingredients.

According to a report from The Guardian: Ben & Jerry’s mission statement trumpets an aim to make “the finest quality, all-natural ice-cream and euphoric concoctions” and to promote business practices that “respect the earth and the environment”. But the firm has come under fire from the Washington-based Centre for Science in the Public Interest (CSPI), which took issue with ingredients such as alkalised cocoa and corn syrup as well as partially hydrogenated soya bean oil.

The pressure group contended that the ingredients had either been chemically modified or did not exist in nature: “Calling products with unnatural ingredients ‘natural’ is a false and misleading use of the term.” In an abrupt about-turn, Ben & Jerry’s agreed to remove the term from its product descriptions… Although the CSPI’s complaint didn’t lodge a greenwashing charge against Ben & Jerry’s for the use of “all natural,” the move comes as governments and consumers are growing more aware of false marketing claims, in health as well as environmental areas.

In the article “FTC Moves Signal Start of ‘Greenwashing’ Crackdown” by Gabriel Nelson at Greenwire writes: The Federal Trade Commission (FTC) is expected to crack down on “greenwashing”… David Vladeck, director of FTC’s Bureau of Consumer Protection, told the Senate Subcommittee on Consumer Protection that tougher enforcement and environmental guidelines are a major part of the commission’s agenda. “In response to the explosion of green marketing…

Environmental groups are excited that FTC is examining the issue of greenwashing though they are not sure what to expect. The agency has remained tight-lipped on details… said Claudette Juska, a research specialist at Greenpeace. “It’s been a little bit hard to see into the process,” said Juska… “The FTC’s Green Guides serves as great guidelines,” Juska said. “But if they’re not being enforced, they’re not useful.”

In the article “Greenwashing Being Caught Red Handed” by Debra Kent Faulk writes: Buzzwords like “environmental-friendly,” “energy efficient” and “carbon offsets” flow freely from corporate press releases, brochures, web sites, blogs, and other promotional materials. Some claims are accurate, certified, and verifiable while others are misrepresentations designed to sell products.

It is amazing how everywhere you turn, products and practices are suddenly “green” and “earth-friendly”: A natural spring water company promotes their new “Eco-Shape Bottle.” An airline entices employees to leave their cars at home for a month by offering them frequent flier points. A fur trade organization says their product is “Eco-Fashion.” Television is producing “green” programming. An on-line retailer advertises electric lawn and garden tools under the headline “Think Green.”

A recent survey of 1,018 products found 99 percent falsely claimed green credentials. Through an examination of everyday products purchased at category-leading big box stores — consumer goods ranging from oven cleaner to caulking to toothpaste and shampoo — the researchers studied each one for false or misleading green marketing claims…

The U.S.-based watchdog group CorpWatch defines greenwash as “the phenomena of socially and environmentally destructive corporations, attempting to preserve and expand their markets or power by posing as friends of the environment.” This definition was shaped by by the group’s focus on corporate behavior and the rise of corporate green advertising at the time. However, governments, political candidates, trade associations and non-government organizations have also been accused of greenwashing.

In 2008 the environmental group Greenpeace launched a website “Stop Greenwash” to “confront deceptive greenwashing campaigns, engage companies in debate, and give consumers and activists and lawmakers the information and tools they need to … hold corporations accountable for the impacts their core business decisions and investments are having on our planet.”