CHAPTER 24
Green Marketing and Communication and How to Avoid Green and Blue Washing
GREEN COMMUNICATION AND GREENWASHING
Often green washing is not an outright attempt to be deceptive, but it stems rather from failing to consider environmental impact measures with the same robust attention as is usually given to more established and familiar measures of business performance.
Green washing—making exaggerated environmental—claims in order to curry consumer favor is one of the banes of the sustainability community. When an organization (company, non-governmental organization (NGO), Government), lauded for environmental performance, is revealed to be engaging in environmentally dangerous practices, it provides skeptics with the fodder they need. Even when the claims are found to be inflated (or impossible to substantiate), credibility is lost. For a business model based on the paradigm that transparency leads to credibility, trust and ultimately market advantage, these incidents can be devastating.
For some companies the desire to appeal to “green” consumers and to be perceived as a good corporate citizen is enough to encourage deliberately deceptive claims. However, most companies do in fact embed “green” practices within day to day operations and initiatives; therefore, on average, the main reason for green washing has nothing to do with malfeasance or bad intent. They have to do with the fact that more often we see a fragmented approach to rolling out projects or activities—where one department may be donating toward reforestation while another is measuring energy consumptions and verifying their carbon footprint. Both initiatives are green, but do they reflect the core business? Is there substantial reasoning behind why these two departments have taken on these specific activities, and why they are completely independent of each other? How is this reasoning being justified and measured against the financial and non-financial performances of the organization?
The old adage in business—that which is measured gets done—implies the reverse as well; that things that are not measured (or are not measured well) are often prioritized lower. This can create a negative feedback loop, which certainly has too often been the case for sustainability.
Moving within the same framework, with regard to the UN Sustainable Development Goals (SDGs) [1], the risk of SDG-washing emerges. The World Business Council for Sustainable Development found that 79% of the companies analyzed acknowledge the SDGs in some way. However, only 6% have aligned their strategy and targets to specific target-level SDG criteria and measured their contribution to key SDGs. The concept of SDGs with their catchy logo strongly attracts the corporate affairs departments and PR agencies, but often no emphasis is placed on its essence and what it represents. Almost similar to green washing, blue washing is about misleading consumers regarding the corporate social responsibility (CSR) practices of an organization. The information provided by companies is inconsistent with regard to compliance with the rules of CSR and other core values of the United Nations. The blue color is derived from the United Nations' logo, meaning that corporations portray themselves as being compliant with the 10 principles of United Nations Global Compact, while they are actually not.
GREEN MARKETING, COMMUNICATIONS, AND SUSTAINABILITY
What does this have to do with green washing? Everything. Because companies that would never consider having newer, temporary, or inexperienced people produce their quarterly financial reports are completely comfortable with having them produce sustainability reports (sustainability performance measures). When these numbers fall short of standing up to scrutiny or are used to solely generating marketing or public relations materials, organizational reputation is at risk. Failing to recognize the potential dangers of this trend in organizations not only places reputation at risk but also places a chain of other dependent factors—employees, community, shareholders, and partnering organizations—at risk as well.
If embedded effectively, by qualified Sustainability Practitioners, in collaboration with key decision makers, sustainability offers solutions to facilitate greater trust in business by applying fundamental principles to core business values and operations that will generate clear indications of how credible these claims are. As a result there is greater transparency between facts and claims, thus enabling consumers to see an alignment between the brand identity, product characteristics, and acclaimed “responsible”/“good” corporate citizenship initiatives.
The competitive advantage of sustainability is the quality of return on investment (ROI) that emerges as products and services take on green characteristics and communications unite the brand's core values with consumer passion, stakeholder awareness, and transparent annual reports. Value for money then does not remain stagnant upon the purchase by a consumer, but rather suspends its impacts to include all relationships formed around the brand—both financial and non-financial. Organizations that focus their vision on sustainability and have a clear strategy, which incorporates standards and models, will enable the adoption of best practices, accelerate performance, and ensure transparent communications.
GREEN MARKETING
Green marketing is the marketing of products that are presumed to be environmentally safe or friendly. Thus green marketing must take into consideration a broad range of activities, including product modification, changes to the production process, packaging changes, and modifying advertising according to American Marketing Association.
Consumers worldwide are increasingly admitting that their behavior has changed in the last few years to benefit the environment mainly from their purchasing decisions. Therefore, stakeholders' purchasing decisions for products worldwide have been affected by green marketing messages. However, organizations should not get too comfortable with this trend in purchasing habits. Statistically, a consumer will spend on average 45 seconds reading a product label before making a “buy-not buy” decision! They are not passive buyers, but rather information seekers and eager to align organizational claims on products with their expectations, knowledge, and perceptions of value for money. Their buying decisions extend beyond their encounters with green products to include access to information regarding environmental claims of the product from trustworthy sources apart from it producer in a timely manner. The breakdown of traditional media channels to all-inclusive, rapid, real-time, divergent commentaries, and news releases also plays a key role in forming opinions on the credibility of these claims.
MATERIALITY AND SUSTAINABILITY
Organizations need to ensure the materiality of their claims. Materiality refers to constituents that are of high concern to stakeholders and of high strategic relevance to organizations.
Materiality is a very important part of a comprehensive sustainability strategy including green marketing. Overstatement of environmental attributes is a very common marketing behavior leading to green washing. An environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, expressly, or by implication. Marketers should avoid implications of significant environmental benefits if the benefits are in fact negligible. For example, if a package is labeled “50% more recycled content than before” based on the increase in recycled content of its packaging from 2% recycled material to 3% recycled material, the claim, while technically accurate, is likely to convey the false impression that the advertiser has significantly increased the use of recycled material.
A comprehensive sustainability strategy is the very first step organizations should design in order to show that they “Walk the Talk.” There are many organizations marketing their green products without having applied fundamental sustainability practices in their operations, thus increasing the risk of being accused as green washers. How sustainability is embedded within an organization influences the degree to which it is perceived as a good corporate citizen or green business.
GUIDELINES FOR GREEN MARKETING
In the United States, the Federal Trade Commission (FTC) [2], the government body that regulates and oversees marketing and advertising, has established general principles that contain specific guidance applicable to certain environmental marketing claims. Additionally European Association of Communication Directors (EACD) [3] has released as well a guide for responsible communication.
One of the questions that are frequently raised about “green” products and services is whether or not there is a receptive public that justifies companies modifying their processes and procedures to capture what may be a small niche or transitional market. The very fact that the US FTC developed and released (for public comment) a set of new proposed green marketing guidelines provides an important affirmation that the government of the largest economy in the world believes in the long-term interest and importance of environmental claims in promoting goods and services. The fact that green marketing was seen as important enough to merit in sustainability eased attention indicates that the environmental impacts associated with goods and services are a long-term prospect.
The FTC has asked for public comment also indicates that they are serious about making sure that the guidelines help consumers to make informed choices—and that they want to make sure that stakeholders have an opportunity to have input into the process. An open, public process is critical to a program with both real and perceived value.
In general the guidelines focus on the importance not only for accuracy but also the need for clarity.
Accuracy
A recurring phrase that appears repeatedly and throughout the document is the need for claims to be based on “competent and reliable scientific evidence.” This is defined as including “tests, analyses, research, or studies that have been conducted and evaluated in an objective manner by qualified personal and are generally accepted in the profession to yield accurate and reliable results. Such evidence should be sufficient in quality and quantity based on standards generally accepted in the relevant scientific fields, when consider in light of the entire body of relevant and reliable scientific evidence, to substantiate that each of the marketing claims is true.”
This should provide a great deal of comfort for those who worry about the possibility of wasting time and effort focusing on overblown or exaggerated environmental concerns. Clearly the FTC is putting its weight behind the need for scientific consensus about what is being addressed. Hand in hand with this is the natural extension of this requirement; the need for robust and accurate measurement of environmental impacts of the products themselves, all along the supply chain from their sourcing, manufacturing, packaging, distribution through to their use and ultimate disposal.
The guidelines take issue with, and offer very little tolerance for deliberate “green washing” including not only misrepresentation but also the omission of salient facts. Stating that doing so is “deceptive if it is likely to mislead consumers acting reasonably” the guidelines clearly are looking at ensuring disclosure as well as offering guidance for claims.
Clarity
Using words like “reasonableness,” the guidelines seek to establish the basis for a “reasonable consumer” standard. They make a credible attempt to cover all the bases by which consumers can be influenced and/or make decisions. The guidance covers “any environmental claims in labeling, advertising, promotional materials, and all other forms of marketing in any medium, whether asserted directly or by implication, through words, symbols, logos, depictions, product names, or any other means.”
Marketers will be held to a powerful standard; they “must ensure that all reasonable interpretations of their claims are truthful, not misleading and support by a reasonable basis before they make the claims.”
In some cases the guidance is very specific; for a product to be defined as recyclable, for example, the product not only must be recyclable, the infrastructure and means to recycle the product or packaging must be in place for 60% or more of the consumers within the markets where the products are sold.
Another area the guidelines cover is production. If the capture and re-introduction of excess materials is part of the standard production process (i.e., when scraps are routinely re-introduced into the production process) the product cannot take credit for being made with, or including, recycled materials.
The idea here is for those that distinguish themselves by going beyond the industry standard to be the only products that are able to gain the benefit from making the appropriate environmental claims.
The guidelines also seek to define the “rules of the game” when it comes to packaging, marketing, and advertising. Just as the government put an end to the practice of hiding clear glass balls in a bowl to give the illusion that a soup contained more meat and vegetables (by keeping them near the surface) in photographs and television commercials, the new guidelines set a framework for where and how products are positioned and even the use of the familiar triangle three-arrow recycle symbol—regulating that it be placed on the bottom on containers rather than near the name of the product when the container is what can be recycled rather than the product.
What is clear is that the FTC guidelines raise the bar in terms of expectations. As a result, companies may find that their current practices—even those that are industry-leading—only go as far as to conform to the new guidelines, thereby setting a new standard. Leading companies may find that they must either extend their efforts or be willing to accept ceding their leadership position. Consumers may not look favorably on companies that were once seen as leaders when those same enterprises now find themselves engaging in behavior that meets the guidelines—and suddenly their exemplary efforts now are commonplace and common practice.
A recent study showed that physical measurements of carbon in the atmosphere are higher than they should be if all the environmental claims from all companies were added together. Clearly there is some inaccuracy in counting. The FTC guidelines seek to prevent double counting, by prohibiting companies from claiming and sharing environmental results. For example, having solar panels on your roof allows you to claim the portion of your power generated, but not if you sell the certificates. In that case, you have also sold the rights to characterize your power use as renewable. And if you have solar panels visible on your facility, unless 100% of the power consumed is generated thus, the company cannot claim “made with solar power” as this, while true, also implies 100% of the power used is from this source. Instead the company must determine the proportion and is limited to making that assertion.
Truly leading companies will develop their own reporting that is more robust than the standards, perhaps using their framework and intent to guide their own actions and messages. A terrific example is the company that decided to apply safety standards not only to its own employees—as was required—but also to all contractors and subcontractors working on its job sites. The immediate result was an accident rate that seemed to “spike” upwards as they began counting all accidents and injuries, not just those from full time employees who earned a paycheck with their company name on it. In response to the immediate questioning of what had suddenly gone wrong, senior management was in the enviable position of pointing out that the accident rate was still the same for full time employees but that what was wrong was, in fact, an industry standard that did not value all people equally. This set a new standard and bar, above regulatory requirements but, by using the same measurement and metrics, the company was faithful to the regulations.
Exceeding and defining industry standards—or even business standards in general—is one way that forward thinking companies will leverage their efforts from the existing guidelines and do more. Doing so will establish that they are not “toeing the line” but rather “raising the bar.” This can also help serve as a preventive (there is no point regulating a problem that does not exist) and help reduce costs. It also can serve as a marker for the company culture, facilitating human resources efforts to promote sustainability and retain top talent. By reducing risks associated not only with potential environmental damage but also associated with defending against complaints due to false marketing claims, companies that engage in proactive efforts also reduce costs due to potential fines for either.
SUSTAINABLE COMMUNICATIONS STRATEGY
Sustainability and Communications symbolize two complementary areas of an organization's mode of operation. Sustainability represents a “holistic” management approach of re-evaluating the overall corporate strategy and operation, as well as monitoring performance via continuously assessing stakeholder engagement. It is an internal approach aiming at instilling sustainability into the overall management and operations of the organization.
Communications, however, represents a function, which aims at communicating and promoting the strategic direction of the overall organization, department, and operations. It represents an external approach to communicate to stakeholders the progress of the overall sustainability strategy. In addition, it aims at convincing stakeholders of the message's purpose, at validating the corporate objectives and at obtaining support for engagement on sustainability issues affecting the organization's economic, social, and environmental impacts.
The main objective of this complementarity is the ability to transmit the right message, in the appropriate amount, through the suitable communication channels.
Sustainable communications is the process of foreseeing stakeholder expectations, and using a pre-determined set of communication tools, being able to articulate the sustainability direction and objectives within the organization's business operations.
Sustainable communications encompasses a new “breed” of actions within the field of communications that enable for a balanced and a transparent promotion of the organization's business and sustainability responsibilities. The process is composed of five phases.
1. DESIGNING THE SUSTAINABILITY COMMUNICATIONS STRATEGY
Regardless of the overall corporate objectives, defining a communications strategy shows attention to planning, an understanding of the situation, an ability to carry out the work, and clear identification of the goal.
2. CONDUCTING AN ASSESSMENT AND DEFINING THE CHALLENGES/ISSUES
- Internal assessment—Is the current communications strategy effectively communicating the corporate sustainability strategy and progress in a manner that will effectively achieve to integrate it within the working environment? Stakeholder mapping to determine the sustainability needs of internal stakeholders is the current communications strategy supported by employees? Does it motivate employee to get involved in organization sponsored initiatives and events?
- External assessment—External assessment of the organization's impact on the overall society and environment and determining how well the currently implemented communications strategy responds to the needs and expectations of external stakeholders. Stakeholder mapping to determine the sustainability needs of external stakeholders. In this stage, assessment is conducted to determine the level of efficiency achieved using existing communication channels and external partners (e.g., NGOs, Associations). Is there a policy behind partnering with external entities to achieve and implement relative initiatives?
Analyze the results of the assessment and determine what the current strengths of the current communications strategy are and what the areas that need to be improved are.
3. DEVELOPING A SUSTAINABILITY COMMUNICATIONS STRATEGY
For each of the four sustainability pillars of the environment, society, HR, and marketplace, allocate critical internal and external stakeholder groups that need to be targeted in order to assure a sustainable communications approach. Using the results of the assessment, at this stage the organization will already have a viewpoint of their needs and expectation thus in this stage the objective is to design the necessary initiatives and actions that need to be enforced. This step needs to be accomplished in parallel with identifying the type of partnerships that need to be formed in order to design and implement the above initiatives and actions. Again, the results of the assessment regarding the effectiveness and efficiency of the Corporate policies vis-à-vis external partners will work as resources in order to update the terms and condition via which the organization will partner with these external partners. The objective here is to assure that all means of investment (i.e., monetary, HR) are allocated accordingly, and respectfully of the overall corporate and sustainability strategy.
Setting targets and developing an action plan per stakeholder group and per initiative designed in order to monitor and assess performance.
4. IMPLEMENTING THE COMMUNICATIONS STRATEGY
The ability of the organization to effectively implement and sustain its communications strategy depends on the designed internal processes that enable for a continuous monitoring and management of the internal and external communications initiatives.
Implementing the communications strategy involves closely monitoring the formulated key performance indicators (KPIs) (quantitative and qualitative) and being flexible enough to immediately respond in case an issue comes up.
Organizations are now “evaluated” for their philosophies and what they stand for. In our era of sustainable communications, what you do is more important than what you say!
This is one reason why in the past couple of years organizations have turned into cause related and green marketing initiatives as a means to promote “business as usual,” but in social and/or environmentally conscious way.
The portion of stakeholders (consumers, employees, NGOs, etc.) who care about social and environmental strategy is rapidly increasing, and has a direct effect on purchasing patterns based on personal beliefs. Prior to making a purchase, these groups want to check the company's sustainability profile to ensure that certain social and environmental standards are respected.
By responding effectively to stakeholder expectations, the organization is able to communicate issues that matter, achieving active engagement, thus creating business value.
A critical element for the implementation of a successful sustainability communications strategy is the ability to engage with stakeholders in a transparent manner, using clear messages, in a joint dialog.
5. REINFORCING STAKEHOLDER INTERACTION
Once the communications strategy has been drafted and implemented, how can we ensure that it will appeal to stakeholders? Most importantly, how will their feedback be assessed in order to update the communications strategy?
There are innovative ways to interest stakeholders of course as per grasping the issues that do in fact matter to them.
The Importance of Social Media
Social media enables real conversation between the organization and its stakeholders. Organizations have the ability to inform stakeholders of news and events, and be able to receive immediate feedback in a collective manner. Furthermore, social media provide the opportunity to stakeholders to engage with one another and be able to collectively provide their opinions and comments, via virtual “town meetings.”
Furthermore, by using the platforms made possible by social media, the organization can provide incentives to stakeholders to access related web links and reports that further promote the corporate message. Stakeholders can be directed to company websites and/or to online news distribution sources where information pertained to the organization is published and ready to be commented on.
The opportunities provided by social media enable organizations to actively interact with a wider stakeholder base by tapping into the limitless potential of the web.
The Importance of the Company Website
The development of a comprehensive, user-friendly website has the ability to transmit messages in an optimum way.
Most importantly, if the website is designed in mind of the stakeholder groups (internal and external) impacting and impacted by the organization's operations, it can represent the primary platform for real, active, transparent, and bilateral communication.
The web content should be developed to communicate as much information as needed. Providing too little information may leave stakeholder questions and concerns unanswered, exposing the organization to public criticism for lack of transparency.
Having assessed and determined the needs and expectations of stakeholders as they pertain to the sustainability context of operations, the organization can rest assured it will be able to substantially communicate financial, environmental, and social initiatives.
Furthermore, the company website should be developed in such a manner that will transmit information in multiple ways.
- Videos presenting the Corporate Responsibility (CR) or CSR strategy.
- A visual presentation of the sustainability report is a new trend.
- Interviews of executive members.
- Advertisements that demonstrate the sustainability communications strategy.
- Video documentaries of how initiatives evolved from a plan on paper to a real stakeholder success story.
- Testimonials by internal and external stakeholders.
- Videos presenting partnerships with third parties (NGOs, Associations, etc.).
Sustainable communication strategy should reflect those issues that are at the core of organizations, the issues that are most important to the stakeholders. While the sustainability concept is rapidly applied to more organizations, stakeholders are becoming more aware, and concerned about how lack of sustainability influence them.
ISSUES FOR LEARNING AND DISCUSSION
- Which of the two concepts, greenwashing or bluewashing, refers to consumers misleading on human and labor rights?
- Can using the logo of the United Nations and the info graphics of the SDGs, without presenting how they are linked with the organization's initiative and performance, be considered as a form of green/blue washing?
- Which attributes of an organization's products/services are highlighted under the concept of green marketing?
- One of the signs of greenwashing is “just not credible.” Which of the following statements best describe it? “A ‘label’ that looks like third party endorsement … except it's made up,” or “Declaring you are slightly greener than the rest, even if the rest are pretty terrible.”?
REFERENCES
- 1. United Nations. 2015. 25 sustainable development goals. Available at https://sustainabledevelopment.un.org/sdgs.
- 2. FTC. 2012. FTC Green Guides: part 260—guides for the use of environmental marketing claims. Available at http://www.ftc.gov/bcp/grnrule/guides980427.htm.
- 3. EACD. Integrating and Communicating Corporate Responsibility, Service brochure. EACD; 2011. https://www.eacd-online.eu/publications/service-brochure/integrating-and-communicating-corporate-responsibility.