Green Consumers' Irrational Exuberance

What is it with pollsters and green consumers? Why do nearly all of the surveys seem so gushingly optimistic, even during pessimistic times? That's a question that's been nagging me the past few weeks.

I typically wait until near Earth Day in April to digest the current wave of surveys about green consumers in the U.S. (see here and here, for example), but the trickle of survey results has turned into a gusher much earlier this year than I can recall. Nearly a dozen surveys have crossed my in-box over the past three months, a period that includes a recession, a presidential transition, and the December holidays.

A sampling:

• Four out of five people say they are still buying green products and services today, even in the midst of a U.S. recession, according to a study commissioned by Green Seal and EnviroMedia Social Marketing and conducted by Opinion Research Corp.

• Despite the dire economy, 34% of American consumers indicate they are more likely to buy environmentally responsible products today, and another 44% indicate their environmental shopping habits have not changed as a result of the economy, while only 8% say they are less likely to buy, according to the 2009 Cone Consumer Environmental Survey.

• Thirty-three percent of consumers say they expect to make some type of green consumer electronics purchase within the next two years, according to a survey by the Consumer Electronics Association. More than half (53%) say they would be willing to pay some type of premium for televisions with green attributes, and 89% said that energy efficiency would be a factor in choosing their next television — even as less than half of the 960 people surveyed said they're generally able to make sense of the environmental attributes attached to electronics on the market.

• An overwhelming majority of Americans believe that safer, cleaner and more energy-efficient production are the most important manufacturing issues in today's economy, according to a survey by Opinion Research Corp. When considering a manufacturing company, Americans chose product and employee safety, and environmental issues as the most important attributes. Among the top answers chosen include "provide safe, quality products" (86%); "provide a safe workplace" (84%); "use natural resources efficiently" (80%); and "produce minimal waste" (71%).

• Three-quarters (77%) of consumers describe themselves as green — that is, actively living their lives consciously of their health and environment, according to a survey by Yahoo! More than half of survey respondents (57%) say they have made a green purchase in the past 6 months.

• Americans see a golden age for green investing, according to a survey by Allianz Global Investors. Seventy-eight percent of investors say we are likely to see more policies to promote business investment in new environmental technologies in the first year of the Obama Administration than we did under eight years of the Bush Administration. Further, 74% believe the new Congress will be more supportive of policies to promote business investment in new environmental technologies than the old Congress.

There's more, but I'll spare you. Did I mention that they tended to be a tad optimistic?

Many of these surveys begin to wilt when exposed to sunlight — that is, when you read beyond the headline and first few paragraphs of the press release or executive summary. And some are more than a little self-serving. For example, the survey on Americans wanting "more energy-efficient production" by manufacturers was commissioned by Rockwell Automation, a manufacturer of equipment to make factories more efficient. The survey on consumer electronics was issued during holiday shopping season by the electronics industry's trade group. The one on green investing came from a major asset management company. The study concluding that "About one in three consumers say they don't know how to tell if green product claims are true" came from Green Seal, a purveyor of eco-labels.

Beyond that, there's the slant of some surveys that doesn't hold up to scrutiny. For example, according to the Green Seal/EnviroMedia study:

Half of the 1,000 people surveyed say they are buying just as many green products now as before the economic downturn, while 19 percent say they are buying more green products. Fourteen percent say they are buying fewer environmentally green products.

The way I read this, if I wasn't buying green products before the economic downturn, and am still not doing so, I'm therefore "buying just as many green products now as before" — and fit right in with half the population. Maybe it's just bad writing, but such ambiguity undermines the authority of these studies.

I'm not suggesting that these surveys are frauds, or that their creators are anything but well-intended. But you don't need a degree in market research to conclude that during a time when consumption is down and the people are pinching pennies as never before, the unbridled buoyancy of these findings is suspect. Are green-minded shoppers really going forth into the marketplace as idealistic as ever? Are they immune to premium prices? Clearly, some green purchases may fall into the category of small indulgences whose sales often rise during tough times, but probably not to the extent reported by these findings.

As I've asked in the past: Can researchers be charged with greenwashing?

What, in the end, is the purpose of all these studies? Are they marketers' efforts to convince wary consumers that everyone else is keeping green purchases on their shopping lists in the hopes that it will become a self-fulfilling prophesy? Is that a realistic expectation in a time where layoffs and foreclosures are mounting by the week?

Or are American consumers, and probably those elsewhere, simply telling pollsters what they want them to hear: that they continue vote for a cleaner, greener world when they shop? And if consumers are being misleading, shouldn't sophisticated researchers ferret that out?

What's the truth behind consumers' seeming irrational exuberance for green? I'd love to know.

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Will Green Jobs Become the New Greenwash?

If you were to believe the hype — from politicos, the mainstream media, the blogosphere, academics, activists, and countless green gurus — you'd think that President Obama and Congress are readying to unleash small armies of green workers across the USA. "Green jobs" has become a rallying cry for activists and politicians alike. They're soon to arrive, and in big numbers — right?

Well, maybe. The fact is, we don't really know what a green job is, let alone how to count them and measure their growth. In some cases, a new green job isn't even a new job but rather a "retained" job — one that might have otherwise disappeared if not for its greenness. In the coming weeks and months — and maybe years — we'll be hearing a growing chorus of green-job claims made by companies, industries, states, politicians, and others interested in showcasing the job-creation potential of the green economy (a phrase that similarly has no definition, despite its broad use — including in the title of my recent book).

In a relatively short period of time, "green jobs" has become part of the national discourse. (We ran a session on the topic at our recent State of Green Business Forum. In late January, I moderated an event on the topic at the Commonwealth Club of California, podcast here.) A broad coalition of big business, labor, investors, mayors, and nonprofits have seized the green jobs message to lobby Congress and the new administration that green jobs are a pathway out of the recession. Labor unions such as the United Steel Workers, Communications Workers of America, and Service Employees International Union have teamed up with environmental activist groups like the Sierra Club to promote a green jobs agenda. Venture capitalists have been using the lure of green jobs as they lobby Congress to grant subsidies to spur cleantech investments. Last week, more than 2,000 labor, environmental, and business leaders convened in Washington, D.C. at the Good Jobs, Green Jobs National Conference to share ideas and solutions for forging a green-centric economic agenda.

Everyone, it seems, is getting worked up over green jobs.

Many of these advocates have brandished recent studies by think tanks and research groups extolling the virtues of green investments that will, they say, produce copious employment opportunities. A sampling:

• The Apollo Alliance's New Apollo Program proposes an investment of $500 billion over 10 years to create 5 million green-collar jobs in a range of industries including renewable energy; energy efficiency; transit and transportation; and research, development, and deployment of cutting-edge clean-energy technologies.

• The Center for American Progress and the Political Economy Research Institute call for spending $100 billion over 2 years to create 2 million jobs in building retrofitting, expansion of the transit and freight rail grids, construction of a "smart" electrical grid, wind and solar power, and next-gen biofuels.

• A report prepared by Global Insight for the U.S. Conference of Mayors forecasts that renewable power generation, building retrofitting, and renewable transportation fuels will together generate 1.7 million new jobs by 2018 and another 846,000 related engineering, legal, research, and consulting positions. That total jumps to 3.5 million jobs by 2028 and 4.2 million by 2038.

• A study by the American Solar Energy Society asserts that the renewable energy and energy-efficiency industries represented more than 9 million jobs and $1.04 billion in U.S. revenue in 2007, 95% in private industry, and could mushroom to as many as 37 million jobs by 2030 — more than 17% of all anticipated U.S. employment.

• A report from the Information Technology & Innovation Foundation predicts that a $50 billion investment in the smart grid over 5 years "would create approximately 239,000 new or retained U.S. jobs for each of the 5 years on average."

This last claim — in particular the phrase "approximately 239,000 new or retained" jobs — underscores one of the problems with green-job claims, and is a source of concern: We don't really know how to define a green job, let alone measure when one is created or "retained."

The ambiguity of language has long dogged the environmental movement. So many vague words and terms have been tossed around as if they have specific meaning and shared understanding, even within serious business, political, and academic circles. When such words are used commercially, they can lead, rightly or wrongly, to charges of greenwash. Along the way, well-intentioned organizations and activities can become tarred with the brush intended for the relatively egregious few.

I fear that the fervor over green jobs could lead to the same kind of misuse and malignment, engendering cynicism and dampening Americans' enthusiasm for the whole subject.

What, after all, is a green job? People stereotypically point to manufacturers and installers of solar panels and wind turbines, and those jobs certainly qualify. Others have focused on sectors — renewable energy, for example. Still others have tried, with varying degrees of success, to circumscribe a basket of sectors and job types.

Example: The aforementioned report by the economic forecasting firm Global Insight claims to have "identified to the finest precision possible the number of workers employed in green activities."

We define these as: any activity that generates electricity using renewable or nuclear fuels, agriculture jobs supplying corn or soy for transportation fuel, manufacturing jobs producing goods used in renewable power generation, equipment dealers and wholesalers specializing in renewable energy or energy-efficiency products, construction and installation of energy and pollution management systems, government administration of environmental programs, and supporting jobs in the engineering, legal, research, and consulting fields.

That's a start, but hardly complete. Aside from some potentially too-narrow definitions (what about jobs creating transportation fuel from agricultural waste or municipal trash?) there are other job types worth considering. Should the truck driver who delivers wind turbine parts to a wind farm qualify as a green job? What about an architect or developer of green buildings? Or an auto worker who last year was making SUVs and this year is making hybrids or electric cars? I could go on.

A United Nations Environment Programme report offers a different, broader and arguably more complete definition:

We define green jobs as work in agricultural, manufacturing, research and development (R&D), administrative, and service activities that contribute substantially to preserving or restoring environmental quality. Specifically, but not exclusively, this includes jobs that help to protect ecosystems and biodiversity; reduce energy, materials, and water consumption through high-efficiency strategies; de-carbonize the economy; and minimize or altogether avoid generation of all forms of waste and pollution.

Of course, figuring out exactly which jobs fit into this broad definition won't necessarily be easy. And some would point to an even broader range of jobs, particularly those that strengthen the social fabric of a community, such as builders or restorers of low-cost housing, or green grocers in traditionally underserved urban neighborhoods, among many others.

Meanwhile, how do you measure a "retained" job — one that would have been lost but was saved due to some kind of shift into more environmentally friendly work? I'm guessing it's not easy or clear-cut — there can be a myriad of circumstances why a job was kept or cut. But I'm also guessing that won't stop a lot of souls from trying to measure these workers.

All of this may seem like splitting hairs, but it's not without purpose. The squishiness of green job definitions is troubling, reminiscent of so many other poorly defined aspects of the green vocabulary — words and terms like "natural," "nontoxic," and "environmentally friendly" — whose use and misuse in the marketplace ultimately led to public skepticism over all green product claims. The use of these words — none of which has a legal definition — is discouraged by green marketing specialists, and by the U.S. Federal Trade Commission in its Green Marketing Guidelines. As the FTC states:

Unqualified general claims of environmental benefit are difficult to interpret, and depending on their context, may convey a wide range of meanings to consumers. In many cases, such claims may convey that the product, package or service has specific and far-reaching environmental benefits. . . . Unless [substantiation] can be met, broad environmental claims should either be avoided or qualified, as necessary, to prevent deception about the specific nature of the environmental benefit being asserted.

Will the broad, unsubstantiated phrase "green jobs" similarly be problematic? Will it lead to a public backlash as people come to assume that green jobs are just another meaningless marketing claim bandied about by corporations and politicians seeking to green up their images? Will green jobs be seen as greenwash?

Should it matter? That's an open question. Some, including me, have argued that the intense scrutiny of greenwashing has needlessly dampened the appetite of companies to talk publicly about their environmental goals and achievements for fear that doing so will open them up to unwanted (and often unwarranted) scrutiny and criticism. Still others (such as Hunter Lovins) have suggested that greenwashing isn't inherently a bad thing, as it indicates that companies are engaged in ways they previously hadn't been. By extension, exaggerated employment claims may be less problematic if they indicate that companies now view green jobs as a benchmark of corporate leadership.

Could it be deemed a good thing that everyone is talking about green jobs, even though they don't necessarily know what that means? Or do we need standards and definitions that help us gauge how well we're really doing?

I'd be grateful for your thoughts.

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The State of Green Business 2009

Today marks the release of our second annual State of Green Business report, our assessment of how, and how well, companies are doing from an environmental perspective. The free 62-page report (download here) offers 10 trends of the past year as well as our GreenBiz Index, a set of 20 indicators that, in aggregate, provide a picture of U.S. companies' environmental achievements.

This is an auspicious time to be taking a measure of corporate environmental performance. On the one hand, the past few years has seen an acceleration of green activity — most of it behind the scenes, only a small part of it actively promoted by companies. The corporate sector — all of us — have been roiled by a litany of energy and environmental challenges: climate change, fuel prices, global security, and growing concerns about the availability of water, the toxicity of everything from food to toys, and the backwash of technology in the form of their skyrocketing energy consumption and e-waste. All of which creates an environment ripe for innovation, from both a technology and policy perspective.

On the other hand, there are tectonic shifts: the once-in-a-generation economic turmoil, the new regime in Washington talking about "green jobs" and a "green economy."

We find ourselves in uncharted waters.

One could reasonably assume that amid these shifts, the greening of mainstream business would have fallen off the map. Companies, after all, are flailing financially, struggling to get through the economic trough — and trying to figure out when it will occur and how deep it will be. So, too, with the changes in Washington. There are endless questions: How will regulations and policy shift? What green laws will appear or disappear? How will the economic stimulus package change the shape and slant of the playing field? When will carbon regulation — taxes or a cap-and-trade system — come to fruition and how will that affect operations, investments, and strategy?

During such times of turmoil and transition companies typically sit on their hands, paralyzed or simply waiting until things settle down. As such, green should fall by the wayside.

But it hasn't. And that's a sea change by itself. In past recessions and political upheaval, companies have stopped in their tracks, cut their budgets, and laid off their environmental professionals until better times or greater certainty. They're not doing so this time around. Even as others around them lose their jobs or see their staffs and budgets shrink, environmental professionals are holding on.

Consider that since November 4 — Election Day — we've reported on the following stories on GreenBiz.com:

• Bank of America plans to phase out loans to companies that use mountaintop extraction as their primary means of coal production.

• Clorox has expanded its year-old Green Works line of eco-friendly cleaners, which has met with such success that the company raised its sales projections six times in twelve months.

• Coca-Cola Enterprises, the largest bottler of Coke beverages, will more than double the size of its fleet of hybrid vehicles. It will soon have 327 green trucks on the road in the U.S. and Canada.

• Underwriters Laboratories, the venerable, 115-year-old testing lab whose "UL" safety logo is on nearly every electronic item ever made — has launched an environmental testing service to help manufacturers bring credibility to their green claims.

• Heinz, Sodexo, Sysco, and Unilever are among 30 large growers, food buyers, and environmental groups that formed the Stewardship Index for Specialty Crops, a coalition to incorporate sustainability from the field to the table for specialty crops.

• Wal-Mart plans to partner with the World Environment Center to help more than two dozen suppliers in El Salvador and Guatemala improve energy and water savings and reduce waste, raw material use and emissions.

That's just a sampling, of course. There's a lot more where that came from.

It's all good. But is it good enough?

That's the question we set out to answer 18 months ago, when we began creating the first State of Green Business report, released a year ago. And in the spirit of continuity, this year's conclusion isn't all that different from last year's: For all the green initiatives and achievements made by companies large and small, they aren't really moving the needle on the problems that matter most: climate change; toxics in our air, water, and food chain; and transformations in economic activity toward a more sustainable economy.

Consider climate change: Absolute greenhouse gas emissions grew 1.4 percent in 2007 over 2006 (the most recent data available) though it shrank 0.6 percent as a unit of GDP — the smallest annual decrease since 2002. The U.S. has steadily reduced the amount of greenhouse gases produced per unit of GDP since 1990, when the greenhouse gases per GDP were roughly 28 percent higher than in 2007, largely because of strides in energy efficiency. But overall emissions are going up — the opposite direction from where President Obama — and most scientists — say we need to be to stem the worst impacts of global climate change.

Or consider electronic waste: Despite widespread discussions in boardrooms and legislatures about the dangers of e-waste, we recycled only a tiny fraction more e-waste in 2007 than the year before, even as the amount of toxic electronic equipment entering the waste stream grew substantially. In 2007, the most recent year for which data are available, we collected only 18 percent of the 1.32 billion tons of computers available for recycling, according to federal data.

To be sure, there are things worth celebrating. We're using an ever-shrinking amount of energy, water, and toxic materials to produce a unit of GDP. Green building is on the rise, spurring new technologies that save energy and money while creating more healthful workplaces. There is a green race taking place in the automobile industry, with every major manufacturer planning to introduce electric vehicles. The leading consumer product makers and retailers are starting to rigorously assess the environmental impact of their products using sophisticated metrics, sending signals along the supply chain that tomorrow's products will need to hew to higher levels of environmental responsibility.

But, as we found in our research, we're barely scratching the surface from an environmental perspective. As much as companies have done to clean up their act, they've got a long, long way to go.

You probably knew that intuitively, as did we. But our State of Green Business report aims to bring some rigor to those assessments. Is there truly a fundamental shift taking place in business — one that will have a lasting salutary effect on planet Earth? Or are companies simply nibbling at the edges of these problems?

Optimistic as I am most days, I fear that the answer tends more toward the latter.

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