Sunday, September 2, 2012

Policy, Greenwash, & Eco-Labeling

Much of the compelling literature out there talks about why we need to make a change and stresses the devastation that will become of our planet if we don't alter our thoughtless, consumer-driven ways.  Everyone has heard about the terrors of global warming, the melting ice caps, the ozone depletion.  Even so, there are still plenty of non-believers out there.  But for the rest of us, at some point you've heard enough of the horrifying statistics and you just want to know if you can do something about it.

It was for this reason that I was (and am) looking forward to Roseland's take on developing sustainable communities.  This week, the focus was on Making Community Policy.  I think we can all agree that, generally speaking, people want to do the right thing.  Issues arise, however, when people aren't particularly clear about what the "right thing" is or when doing so is particularly inconvenient or expensive.  And in the process of making sustainable choices, this is often the case.  As such, policy can help fill the gaps and create alignment so that sustainable options outweigh the alternatives.  But as with almost everything, there are some holes in the armor and some problems born of policy, especially as they relate to business and a concern with the economic bottom line.

There are lots of buzz words floating around out there, and as the satirical video posted here depicts, many companies are using consumers' lack of knowledge to portray themselves as environmentally conscious.  While policy development has taken steps in the right direction and certainly offers some useful tools to enact change, some corporate responses to those policies have diverged from the original intentions.  According to stopgreenwash.org, greenwash is a term "used to describe the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service."  And while there is arguably a lot of this going on, it is up to consumers to educate themselves about the actual practices of the companies whose products and services they are buying.  But how can you tell which claims are legit and which are full of it?

Of particular interest to me in this regard was Roseland's discussion of Voluntary Initiatives.  I spent my most recent summer in Michigan interning for an office furniture and technology manufacturing company.  The office furniture industry has taken major strides in sustainability practices, which is most clearly evident in the multitudes of voluntary eco-label certifications that are widely used (BIFMA level, Cradle to Cradle, and FSC Chain of Custody certifications to name just a few).  While the intention behind this long list of labels is to provide a standardized, third-party verification of the sustainable practice claims a company makes, problems still arise in their enforcement and in the messages they send to consumers.  In Label Confusion: The Groucho Effect of Uncertain Standards, Harbaugh, Maxwell, and Roussillon discuss the value (or lack thereof) of voluntary labels and the confusion that they can create for consumers.  The authors talk about the "Groucho effect" which occurs "when standards are uncertain [and] if a product is expected to be low quality, then...consumers infer that the labeling standard is probably weak if such a product can meet it."  Just as Groucho Marx joked "I wouldn't want to belong to any club that would have me as a member," a company whose eco-reputation is bad won't necessarily gain much from the addition of eco-labeling.

  
In another article entitled Greenwash: Corporate Environmental Disclosure under Threat of Audit, Lyon and Maxwell dive deeper into the greenwash phenomenon and discuss how NGO audits of environmental claims can actually backfire and cause companies to become even less transparent.  With all of this uncertainty surrounding policy and environmental claims, there is a lot of room for improvement.  And until full environmental disclosure is a required, common practice, it's still up to us to weed out the good, the bad, and the eco-friendly.

14 comments:

  1. Intriguing post. I'm excited to hear from our b-school counterparts throughout the semester as us SPEONs are often in our own bubble and school of thought. Your post and the idea of green washing immediately brought the natural gas industry commercials to mind that portray hydraulic fracturing for natural gas as environmentally friendly as renewable energies. And this is an industry that is far from transparent as all you have to do is look up how quickly and how much industry money was spent to kill the FRAC Act legislation that would have required chemical disclosure of the chemicals used in fracking.

    Interesting to hear about NGO audits and the argument that they can backfire by making companies less transparent. When a food product makes a health claim, it has to be confirmed by the FDA. Should green claims on products be vetted by government agencies? Is this a good use of public funds? I think the consumer deserves the right to know the 'greenness' of their purchases but who'll provide the accurate information to consumers? Yes, there are NGOs, non-profits, and consultants to rate products as well as things like Eco-label. Some European countries are ahead of the curve on this.

    I would certainly use a green rating system of products that I purchase. But I guess the question lies in who vets and accurately rates the companies.

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    1. Graham: interesting proposal on requiring environmental claims to go through regulatory bodies as food does. Energy star is an example of where this is already happening (needs EPA certification). As someone who used to work at a regulatory agency, I can certainly see the value in this. However, tensions arise including: the value that we place on the speed on innovation and labeling -- regulations slow things down and often-times, corporations can work faster to benefit consumer and environment; and the relative threshold for FDA approval. Sometimes, industry working groups can create even higher thresholds than the govt and labeling -- to the point of 'lack of transparency' actually 'lower the burden.' The balance between innovation and regulations is a tough and fascinating debate.

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  2. I completely agree about your statement, "Issues arise, however, when people aren't particularly clear about what the "right thing" is or when doing so is particularly inconvenient or expensive." I think it is definitely something of concern that most people encounter almost every day. I recently talked with some of my friends who are just starting out and are on their own now about buying organic and natural foods (from places like BloomingFoods, Whole Foods, and Trader Joes). Although they know they should, they just simply cannot afford to shop there. Most items that are plastered with those labels generally are much more expensive than the cheaper Kroger brand sitting right next to it. Which would you choose if environmentally conscious but also on a budget? Its tough! Additionally, I have never heard of the "Groucho Effect," so that was very interesting to hear about. Your youtube video made me laugh as well. But it is all true! Which is the sad part:(

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  3. Hey Julie! I agree that greenwashing is everywhere in today's marketplace. There is a big difference between firms that take sustainability as a cornerpiece of their overall strategy, and those who tack on a eco-label as a PR afterthought. However, without doing substantial research or due diligence it is difficult for the consumer to know the difference! Strong sustainable industry watchdog groups or coalitions are needed to inform the consumer, but I worry their voice gets lost in the media & advertising deluge we go through every day. Perhaps this is an area where regulators need to step up and be more stringent on approving eco-label criteria.

    What were your thoughts on the furniture industry? Is sustainable practice real or greenwashed?

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  4. I really liked the video, very funny! Although greenwashing is unfortunate. I know some people who believe that all green/eco labels are just marketing scams to get people to by their products, and some are. However, those that are actually making goods from recycled materials or using renewable energy sources to create products can be lumped in with those companies that aren't being honest. Sometimes it's easy to differentiate between companies that are truly being 'green', and sometimes it's not.

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  5. I want to start with Graham's comment because I'm from Western Pennsylvania where those commercials about natural gas drilling were airing almost every commercial break for the past two years. Needless to say I watch the first one, and then I started to laugh. But they quickly became so numerous and annoying with how much of a PR campaign they were that I knew the first few words and tone of the commercials well enough I could be doing anything else and hit mute on the TV to ignore it.

    Not much annoys me more than companies calling natural gas the clean or green fossil fuel. I even think I saw a billboard once that tried to promote clean coal, that's when I lost my faith in most energy companies. But the one commercial that got me was the farmer saying he was having a hard time keeping the farm running until the natural gas company came in to drill and now he just farms for fun!

    But anyway, as for the original topic about Eco Labeling. I found it interesting that as the Green Movement went popular people started buying more 'green' things, logos/stickers, water bottles, etc. portraying themselves as green. Not many bigger ironic instances than increasing consumerism because you support the green movement. And isn't buying things freely too much accumulation of goods? Daly would have something to say about that!

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  6. I see greenwashing everywhere! Sometimes I laugh and hope that people aren’t actually buying into it. But there’s no way around it. People are ignorant and love to believe what they hear and see. People don’t care about the environment and how their activities affect the Earth. I believe it is my mission to be that person to show people exactly how they impact the Earth. People stopped eating meat when they saw videos of slaughterhouses and how the animals were being treated. The same protocol needs to be carried out in order to successfully drive home to sustainability message. We should show them where their waste ends up and what becomes of it and how their day to day activities affect the Earth. Essentially scare them into being “green”. I hope that isn’t on the verge of extortion. I’m glad you are in this class. Most of the students I encounter are SPEONS. I’m very interested to hear what you will have to say about some topics coming from a business background.

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  7. Julie, I'm with you on the nasty effects of greenwashing, and watching that satirical video was pretty sobering as well as pretty funny. Consumers have a lot more to be responsible for if they're looking to truly find green products. However, while I was reading your post, I started thinking about why greenwashing exists in the first place: private firms find the green movement profitable. Consumers WANT green products. That, is the diamond in the rough. We find greenwashing a bad thing because it's corporate deception, but it's a good thing that green has caught the eyes of energy companies and department stores like Wal-mart alike.

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  8. Great video! I think it's getting progressively more difficult to tell the difference between companies that are actually dedicated to saving our environment. Whatever the companies incentives for greenwashing, be it more consumers, larger profits, or a court order, they are wasting their money when they can actually invest it in a environmentalism. If they could build their reputation being genuinely dedicated, they will gain those customers using environmental ethics.

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  9. I think the topic of greenwashing is extremely important to consider, especially cause I have friends and family all the time telling me that they are helping to do their part by supporting some particular brand that has a green label on it, with no actual verification that this label really means anything! And I really do find it frustrating that companies do this, enticing consumers to purchase their product with the thought that it is an environmentally conscious decision, when really the company may not be doing anything substantial to help the environment (just enough to advertise). And in the long run, no one really wins. Now that everyone is ''eco-labeling'' their products, the only thing that the consumer is getting, is confused.

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  10. I think this is definitely an important issue as I'm sure many of us are guilty of trusting what a product's packaging says without researching it further. Even more, I put a lot of faith into an entire store (Bloomingfoods) and assume that the products I'm purchasing are some combination of being better for me, more environmentally friendly, sustainable, local, etc without giving it a second thought. We should all strive to be more informed as consumers.

    As a side note:
    The FTC has provided guidelines (http://www.ftc.gov/bcp/grnrule/guides980427.htm) for environmental labeling but they "are not themselves enforceable regulations". Within these guidelines it does mention seals, but not in depth. Changes were proposed for these guidelines (http://www.ftc.gov/bcp/edu/microsites/energy/documents/Green-Guides-Summary-of-Proposal.pdf) which would provide consumers with more information on such certificates and seals, however, I can't seem to find any current information on their status.

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    1. Megan -- thanks for sharing Green Guides! My understanding is that the FTC is still working to revamp these, but I know it is something that they truly value (this is something my colleagues worked on tirelessly while I was there). You're right, the biggest issue with these is enforcement. Right now, provided information for 'best practices' is the best we can do.

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  11. Awesome post, and I completely agree. It is so difficult in today's world to know which companies are being honest, and which aren't. I try to buy all environmentally/ animal- friendly beauty and cleaning products, and I must say I often have a difficult time trying to figure out which companies to buy from. Every time I see a new company (or an old one) advertising to be "eco- friendly" or "100% natural" I try to research them to find out if they actually are. Often times though I am left confused, or find dead- ends trying to find out the specifics of a companies practices. It would be useful to consumers if there was some sort of central third party agency (like Consumer Reports) to evaluate whether these claims are actually true or not. In the meantime what I like to use (while not necessarily geared 100% towards the environment) to find animal- friendly products is the PETA website. Check out http://www.peta.org/living/beauty-and-personal-care/companies/default.aspx

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  12. Julie -- bless your heart, you know this is a topic that I find fascinating, complex and exciting. A few takeaways/some have been mentioned: 1) Isn't it great that we've evolved to understanding greenwashing as a society? In the consumers have access to information and do their homework! 2) It's great that companies see this as an issue that consumers care about! But the problem -- we all want to meet consumer needs profitably, but don't all know how to do that in the more environmentally friendly yet. Even further, it's also about education C-suites (like we educate consumers) that behavior changes isn't only 'net good' (as in do some bad but do more good) but rather the absence of bad. This raises another moral question: how do we define 'bad' -- some environmentalists argue that we shouldn't rely on coal or oil at all for energy, while BP, Shell, etc. would argue that it's economically more feasible. 3) Labeling: In a world where we have unparalleled access to information, we must use brands and labels as a way to breakthrough the clutter, but we must pair these with education. Is that what you mean by 'lack of transparency?' I know we will continue to chat about this!

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