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sustainable-business iconShades of Green - Understanding Greenwashing
by on 02/11/2010

There are lots of definitions, explanations, polls and evolving research on ‘Greenwashing.’

Greenwashing It is a hot topic of conversation and consumers are getting more involved in the process. So how do you communicate your environmental practices, initiatives and goals more effectively? The Business for Social Responsibility (BSR) put out a report last year to try and answer questions, gather research and guide businesses in the right direction. BSR outlines 8 areas to consider.

BSR is a leading non-profit organization focused on developing sustainable business strategies and solutions by collaborating with its network of global partners. In its report, BSR offers eight areas of practice that need to be addressed. Before communicating environmental credentials, BSR recommends the following practices:

1 Know your products’ biggest impacts.

2 Be transparent.

3 Bolster your claims with independent verification.

4 Avoid making claims “in a vacuum.”

5 Enable and encourage consumers to act.

6 Understand your customers and target different market segments in different ways.

7 Anticipate game-changing technology.

8 Participate in the rule-making.

The research showed that greenwashing is growing and there are five main drivers for it.

Consumer demand for more environmentally responsible products is growing

  • Consumers who choose green products over other options now represent 40 percent of the American market, according to Cone’s “Green Gap 2008 survey.” In 2007, that translated to roughly US$230 billion
  • This trend is global. National Geographic and Globescan’s “2009 Greendex,” which surveyed consumers in 17 countries, found a rise in environmentally friendly consumer behavior around the world

Sales of environmentally oriented products have increased

  • 328 products were launched in 2007 labeled as “environmentally friendly”, up from just five in 2002, according to a CBS News report

Demand remains strong despite the economic downturn

  • The 2009 “Cone Environmental Survey,” conducted by Opinion Research Corporation found that attitudes toward environmentally responsible products remain strong with the state of the economy
  • 34 percent indicate they are more likely to buy environmentally responsible products today
  • Another 44 percent indicate their environmental shopping habits have not changed as a result of the economy

Regulation and government action is pending

  • Recent analysis by HSBC of the economic stimulus packages that have passed or are pending in 15 nations found that US$3 trillion is planned to stimulate their economies over the next decade - much of this is will support environmental objectives
  • U.S. stimulus packages promises to double clean energy capacity and is expected to create around 2.5 million green jobs. A key result of this is that lobbying is on the rise • The number of climate change lobbyists in Washington rose to 2,430 last year—an increase of 300 percent over the previous five years, or about four lobbyists for every member of the U.S. Senate and House of Representatives

There are generally not industry-wide standards for communicating environmental messages

  • U.S. Federal Trade Commission (FTC) was frequently characterized as an insufficient mechanism for overseeing advertising practices
  • Advertising spending on green continues to rise

This is not just a fashionable thing. We’ve turned a corner and it is part of doing business now. That’s not going to go away.”

—David Mallen Associate Director, National Advertising Division (NAD)

The Takeaway – Qualify & Quantify

There is no clear path to defining greenwashing and based on individual preconceptions as well as the messaging and media exposure for a product or company, perceptions will differ. What businesses need to remember is that they are playing a leading role in how perceptions will evolve. They can take steps to promote transparency, education and qualification of their claims or they can contribute to the mistrust and confusion that are seen due to the increase in environmental marketing claims. Here is a link to read the full report, “Understanding and Preventing Greenwashing: A Business Guide” by Rina Horiuchi and Ryan Schuchard, BSR, Lucy Shea and Solitaire Townsend, Futerra, July, 2009.





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