I
recently had a conversation with a few friends about the connection
between brand management and sustainability, and I used the word
“greenwashing”. They laughed and said that they had never heard the term
before. My reaction was ‘Really??’. One is an IT executive and the
other is a neuroscientist, so to be fair neither has daily visibility
into either sustainability or marketing, so it is somewhat
understandable that they’d never heard this term. The encounter made me
realize, however, how those of us in the sustainability world exist in
our own little bubbles, speaking our own language and preaching to our
own choir. The implications are larger than just a semantic challenge,
however. Businesses using the language of “green” in marketing claims
run a risk of misleading consumers, either intentionally or
unintentionally, and this can erode the value of sustainability as a
tool for competitive differentiation.
Terms such as green, natural, and
sustainable are popping up everywhere, and their vague definitions are
causing confusion among consumers. This creates an especially murky
linguistic landscape for marketing departments trying to navigate the
new territory of positioning their brands to attract the widest spectrum
of “green” consumers without being accused of “greenwashing”.
Greenwashing was a term coined in the
late 1980s, and has come to be understood as the use of marketing claims
to position a company, product or service as having environmental
benefits that are not supported with real evidence. It is the source of
much confusion in the marketplace around what kinds of impacts a
particular product has on the environment, and which product is better
than another. Marketing language that has fueled this confusion includes
‘eco-friendly’, ‘natural’, and ‘green’. These are words that seem
obvious on the surface, but what do they really mean? In many cases they
mean next to nothing, and that is doing significant harm to the push
for true sustainable product innovation because it causes a lack of
trust in the marketplace. If skepticism grows among consumers that a
choice between a seemingly “sustainable” product and one that is not
doesn’t really matter in terms of environmental impact (especially if
they are being asked to pay a premium for the sustainable choice), they
will stop demanding those sustainable products and companies will be
less inclined to produce them.
So for this reason, from a sustainable
brand and reputation management perspective, greenwashing is one of
those tricky “fine lines” that a company needs to be careful not to
cross. Taking a holistic approach to putting sustainability at the core
of a business includes leveraging the sustainability performance of a
company or product for marketing purposes, but only if the claims made
are backed up by real metrics and are communicated clearly to the
public. If a company makes claims that aren’t true (or are a stretch of
the truth), its sustainability positioning can become more of a
liability than an asset.
In an attempt to help provide guidance
for sustainability marketing claims, the Federal Trade Commission (FTC)
issued an update to their Green Guide,
which is the enforcement code aimed at eliminating unclear
environmental statements from marketing language. This 36-page set of
standards breaks down what is okay and not okay for a company to claim
about the environmental attributes of its product, with helpful examples
for different scenarios. The document creates clear standards on
environmental statements ranging from Carbon Offsets to Compostability
to ‘Free of’ claims. One of the more interesting clarifications that the
FTC makes is regarding which entities can claim credit for renewable
energy. For example, if you build a wind turbine or solar array to
generate 100% of the renewable energy required to power your
manufacturing facility, you can claim in your marketing materials that
your product is ‘Produced With Renewable Energy’. However, if you build
the renewable energy generation capacity but instead of using that
energy to power your own facility you decide to sell Renewable Energy
Certificates (RECs), the company who purchases the RECs gets to make the
‘Made With X % of Renewable Energy’ claim but you cannot.
Many “green” product claims fall into a
grey area in terms of these FTC guidelines. For example, I’ve been
shopping for a new sofa over the last few months, and since I work in
sustainability I thought I would see what was out there in terms of
“sustainable” furniture choices. Now, I thought this should be easier
for me than for your average consumer since I follow sustainability
terms and trends for a living, but oh no! I found lots of choices that
use the “natural” terminology to describe their design, but there was no
indication if they contained glues and adhesives that would outgas
toxic fumes into my living room. Then I found one that claimed the seat cushions were made out of soy
and it was labeled as “sustainable”. OK, so soy might be better to have
in my living room than, say, foam that outgases formaldehyde, but is
manufacturing sofa cushions from soy actually environmentally
preferable? Taking modern agricultural practices into the equation
(massive use of pesticides, water, and not to mention using a food crop
for non-food purposes), the answer is not entirely clear. So if I, a
sustainability professional, cannot determine if a “sustainable”
marketing claim is meaningful or misleading, how is the general public
going to make sense of such claims?
The FTC’s Green Guide is certainly not a
cure-all for the greenwashing problems plaguing sustainable brand
management efforts, but it at least attempts to raise the bar for what
corporate marketing departments can say. Ideally, this will boost
consumer confidence in sustainability claims and provide greater brand
value for those that truly are putting solid sustainability improvements
into their products and enterprises.