Can General Motors Save the Planet?

Today is a watershed day for General Motors — and I’m not talking just about the historic and record-breaking initial public offering marking the company's return to the stock market, and away from majority ownership by the taxpayers.

Today, Chevrolet, the company’s largest brand, announced it would invest $40 million in 8 million tons of carbon offsets — equivalent of roughly a year’s worth of driving the cars it will sell next year.

It may not be the most innovative move — dozens of other companies have made significant investments in planting trees, building renewable energy plants, weatherizing buildings, and other things that reduce energy and greenhouse gas emissions. But it’s a bold move, both in its size and its timing.

Consider: On a day when of America’s most iconic companies has come back to life as a public company after going through bankruptcy and government bailout, its first gesture is an environmental one.

Clearly, something different is going on here.

I’ve had a opportunity to track GM’s road to this announcement over the past few months, through the window of my relationship with the consultancy GreenOrder, and through my friend Sue Hall, founder of the Climate Neutral Business Network, which shepherded the project through GM. Last week, I attended a small brainstorming session convened by Hall at GM headquarters in Detroit to look at how the announcement and its messaging were shaping up, and to provide feedback.

And over the weekend, I spoke with Joel Ewanick, GM’s vice president of marketing, the principal driver of this initiative, as he was — well, driving a Chevy Volt from Detroit to Los Angeles, where today’s announcement was made, at the L.A. Auto Show.

First, the basics. GM today stated its intention to “invest $40 million in various clean energy projects throughout America” with the aim of offsetting 8 million metric tons of carbon. The company estimates that the goal equates to the emissions in 2011 from driving the 1.9 million vehicles Chevrolet is expected to sell in the United States over the next year. Chevy will be making the investments through third-party organizations such as the Bonneville Environmental Foundation, a nonprofit organization based in Portland, Ore.

The project began with Ewanick, who joined GM in May by way of Nissan and Hyundai. “When I first started, we began talking about the direction the company was going to take, and fact that there was a real need over the long haul to balance our portfolio,” he told me about 1,700 miles through his 2,300 Detroit-Los Angeles trek, just outside Moab, Utah. “For at least the past 25 years, we’ve been heavily dependent on trucks. We haven’t put as much emphasis on fuel-efficient sedans. And our Japanese and Korean competitors did.” The company had begun to turn the corner, creating the electric-gas Volt, a 42 mpg Cruze, greening up its operations — roughly half of its manufacturing plants worldwide are now zero-waste facilities — and taking other efforts.

“But we said, ‘There must be more we can do.’ We need to show that we’re no longer that company that’s going to send a legion of lobbyists to Washington to say climate isn’t important, because it is. As a company that produces cars, we can go a long way to making people aware of our responsibility, both from a corporate standpoint and an individual standpoint. And that’s where this whole thing started.”

“This whole thing” took a variety of twists and turns. A wide range of bold and audacious ideas were tossed around by Ewanick and other members of the senior leadership. The idea of offsets rose to the top, though the company understood that offsets can be a dicey proposition, for several reasons. One, they’re not that easy to explain to the general public. Two, they’re complicated and controversial as to whether they really reduce emissions. And three, GM’s demand for offsets might be sufficiently large that it could outstrip supply.

In the end, the notion of offsetting a year’s worth of driving got the green light. GM acknowledges that it doesn’t know exactly how it will achieve its goal — that is, where it will invest money to buy, at an average of $5 per ton of offsets, enough quality projects that it will truly reduce emissions, and not simply write a check for something called "renewable energy credits" and be done with it. The projects it has eyed include providing energy-efficient technology such as smart energy sensors and solar panels to schools, supporting wind farms and solar projects that help family farms increase their revenues per acre, and capturing flammable methane from community landfills to deliver clean energy to the grid and improve local air quality and safety.

Pulling all that off might be relatively simple, compared to explaining all this to the American masses.

I asked Ewanick, “What did you hear in the research that convinced you that offsets were the way to go, that people would understand what they were and that this would move the needle on people’s perceptions of GM as a result?”

“It’s going to be a difficult challenge,” he conceded. “A lot of people don’t understand this issue -- that we can do something about CO2 by doing other things, by finding more efficient ways of producing energy, weatherizing schools or finding things we can do with the methane gas [from landfills].

“In our research, we found that people don’t believe in ‘being green.’ But if you ask them if they do things that help the environment, just about everyone we talked to said, ‘Of course.’ A lot of people feel they’re doing good things by buying more fuel-efficient cars. Others recycle. But the unifying thought that happens is that they feel helpless as individuals, that what they do as individuals doesn’t really make that much difference. There’s no way to make people feel collectively that they’re making a huge difference. So, here’s a way through Chevrolet where we can say, ‘Collectively, you and us are making a huge difference.’ And we can quantify that difference and they don’t feel helpless.

“They constantly told us, ‘As an individual, I can only do so much. Companies need to do more, the government needs to do more.’ They said that ‘If a company did something good for the environment, I would support them.’”

GM plans to push the story out to the mainstream, seeking that support. Full-page ads will show up soon in major U.S. daily newspapers. Starting Sunday and over Thanksgiving week, TV watchers will see a series of commercials touting the carbon commitment. Additional ads will follow, though less intensively. There's a new website devoted to the initiative.

“It’s a really great time to do it over Thanksgiving,” said Ewanick. “Families are home together. There’s a lot of conversation at the dinner table. With any luck at all, maybe Chevrolet will be part of that conversation. People can talk about what we’re doing.”

Can General Motors truly change the conversation on carbon and climate? It’s an audacious, almost unfathomable notion, particularly when you think about where GM has come from: suing state carbon regulators, lobbying against federal action, stonewalling activists, selling Hummers, and all the rest.

I, for one, will be anxious to see how that works. Certainly, there will be critics on both sides -- environmentalists who blindly charge greenwash, because that’s what they do; and conservatives who will rail against this somehow as a misuse of taxpayer bailout money — because that’s what they do.

Personally, I wished the company’s messaging had taken this head-on. I would have preferred that GM had said, “America, you invested in us. Now that we’re back, we’re returning the favor. We’re going to invest in schools and communities around our 3,100 showrooms. We’re going to put people back to work -- not just making greener cars, but making greener buildings and greener energy. We're going to invest in a more sustainable future, in clean air, in energy independence. We’re going to turn the tables on that old adage: ‘What’s good for GM is good for America.’”

As he cruised along U.S. 191, passing some of America’s finest scenery, I asked Ewanick what success looked like -- “What’s the story you’ll get to tell five years from now if you get this right?”

He responded, “We’ll look back and say, ‘Finally a car company stepped up and signaled to the world that cars are part of the issue when it comes to CO2.’ And as the car industry grows around the world, that we got together and started doing initiatives like this together. In the end, it can’t be just Chevrolet. A lot of our competitors need to join us on this.”

Can GM really move the needle on climate change — and on its own image as a responsible company? It’s a long, long journey, filled with potholes at every turn. The destination is far off, at times elusive.

But for at least a day, we should celebrate what’s at minimum a symbolic shift by America’s largest automaker, and very possibly much more than that.

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Sustainability Still Wins Elections

Sometimes, the voters get it right. For sustainability advocates, desperate to find something positive in this week's election, here's one: Proposition 23, the California voter initiative to undo America's most aggressive climate program, was soundly, roundly defeated.

It wasn't even close: More than 60 percent of California voters chose to stay the course on California's nation-leading green-economy march. The opponents of climate action didn't just lose, they were trounced.

Prop. 23, for the uninitiated, aimed to reverse California's sweeping greenhouse gas legislation, known as AB32, signed into law in 2006 by Governor Arnold Schwarzenegger. It requires a reduction in state greenhouse gas emissions to 1990 levels by 2020. The law will engage a broad-based effort by just about every business entity in the state, along with government at all levels -- and, of course, individuals in their roles as shoppers, drivers, and homeowners — in dramatically reducing California's climate impacts.

Reaching the law's mandates involves a low-carbon fuel standard for vehicle fuels as well as regulations for tires, engine oils, paints, window glazes, and vehicle insurance. It involves new regulations that affect housing, trucking, refrigerated vehicles, cargo vessels, rail freight, chemicals, and many other parts of the economy. It is, simply put, the most comprehensive climate legislation enacted, at least in the U.S.

Which is why some big companies hated it. Fossil fuel companies in particular. Valero and Tesoro, two Texas oil companies, provided the majority of funding in support of Prop. 23. The proponents took the stance that California simply couldn't afford to address climate change during a recession, with state unemployment at more than 12 percent. Proposition 23, had it passed, would have mandated that AB32 efforts be back-burnered until the economy greatly improved — until such a time that unemployment hit 5.5 percent for four consecutive quarters. That is to say, until never.

Proposition 23 was significant for one principal reason: It was the first time that action on climate change had been put to the voters.

And the voters spoke, resoundingly: Californians overwhelming agreed that this is no time to stop California's leadership on energy efficiency, renewable energy, clean technology, and greenhouse gas reductions.

And they shook off the claims that this would be a job-killer, agreeing instead that AB32 represented a tremendous opportunity for the state to build on its existing foundation as a leader in new technologies, companies, and industries. Indeed, it was the new-economy companies, investors, and entrepreneurs -- and the occasional large company, like HP — that stood on the side of climate action.

"Evidence says 'As goes CA so goes the nation,'" Sunil Paul, a clean-tech investor and entrepreneur, and creator of an initiative called the Gigaton Throwdown, told me last week. "It's true not just for food -- McDonalds to California cuisine — but for environmental laws. Environmental regulation in other states and at the federal level often starts here in California. But so can dismantling the laws. California policy instability in the early 1990s lead to the collapse of the U.S. wind turbine business and those anti-clean energy attitudes took root elsewhere in the country."

Another clean-tech VC, Rodrigo Prudencio of Nth Power, put it this way: "Prop. 23's biggest impact on California's clean-tech economy would not have been in the direct impact of killing AB32 — only a few cleantech companies rely on a price of carbon in their economics," he told me. "Rather, it would have been the surreptitious attack on the many laws and regulations that underpin California's environmental leadership, many of which, arguably, could be sidelined by passage of Prop 23. The proposition was a legitimate Trojan horse."

In this case, the big wooden horse of economic recovery was quickly seen for what it was: an diversionary insurgent effort by some of the biggest contributors to climate change to maintain the status quo in order to protect their narrow interests.

And so it went: Californians said, in effect: "Climate change is both a threat and an opportunity. The threat is to our homes, communities, and children. The opportunity is to reinvent our economy toward a low-carbon future — even if it takes significant changes in our economy and our lives. The promise of a green economy, and all of the companies and jobs that will create, is greater than the risks of change."

And just in case you think Californians were smoking something, consider that another initiative, Prop. 19, which would have essentially legalized marijuana, was similarly quashed by voters. Today, the sweet smell in the air is that of rational, progressive thinking.

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Is TerraChoice Greenwashing?

I’ve been holding back on laying into the third and latest Sins of Greenwashing report — in part because I’m feeling too much like a broken record — but I’ve got to weigh in.

The report, if you’re not familiar with it, is published by TerraChoice, a Canadian-based environmental marketing agency. (Earlier this year, it was acquired by UL Environment, a division of Underwriters Laboratories. GreenBiz is engaged in a partnership with UL Environment that is wholly unrelated to TerraChoice.) TerraChoice’s report aims to take stock of the state of greenwashing — that is, false and misleading environmental marketing claims made by companies — based on a survey it conducts in 24 stores in the U.S. and Canada. This year’s survey covered nearly 5,300 products that made some kind of environmental claim. All told, more than 12,000 claims were evaluated.

TerraChoice uses a seven-part screen to judge the claims. Any product that failed to pass any one of the seven screens — “sins,” as TerraChoice calls them — was deemed to be greenwash.

The verdict: 95% of the products failed the test. Nearly everyone, according to TerraChoice, is a sinner.

This, believe it or not, is an improvement over last year, when over 98% (of about 2,200 products) were greenwash, according to TerraChoice. In 2007, the first year of the report, 99% (of about 1,000 products) failed. That, it could be said, is progress.

So, what’s my beef? Simply put, the report may be as much of a greenwash as the products and companies it is criticizing.

Want proof? I put the report to its own test. Here is my assessment of the report weighed against three of TerraChoice’s seven “sins.”

• The Sin of No Proof “is an environmental claim that cannot be substantiated by easily accessible supporting information or by a reliable third-party certification,” according to TerraChoice. By that measure, the report fails the test. Its findings do not include supporting information — it offers only high-level, unsubstantiated findings — and were not vetted or verified by an independent third party. You have to take the authors' word for it. Any marketer who takes that approach with their products is dubbed a greenwasher by TerraChoice.

• The Sin of Vagueness is committed when a claim "is so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer.” You know: generic, meaningless words that sound good but lack a legal or generally agreed-upon definition, like "natural" or "nontoxic" — or "greenwash." So, is it an overly broad misuse to cry “greenwash” if a company, say, made a valid marketing claim but failed to adequately back it up? (Fully 70% of all products examined by TerraChoice committed this sin.) After all, "greenwash" was originally coined to describe much more egregious practices — e.g., the "dissemination of misleading or false information designed to make an organization or product appear more environmentally friendly than it actually is" or "the unjustified appropriation of environmental virtue," to cite two reasonable definitions. Neither describes the aforementioned “sinner” that simply failed to provide adequate proof of a valid claim. Hence, TerraChoice is using the same kind of sensational but vague terminology it rails against in its report.

• The Sin of Irrelevance results from an environmental claim “that may be truthful but is unimportant or unhelpful for consumers seeking environmentally preferable products.” This irrelevance cuts both ways. Did TerraChoice apply the greenwash label to companies whose product claims are factually true but insufficiently substantiated? We don't really know, because TerraChoice won't say, but to the extent that it did, this seems unimportant and unhelpful to consumers trying to make good, green choices. In a word: irrelevant.

The tally: I’ve found reasonable grounds that the TerraChoice authors violated at least three of the seven screens it set for green marketers. According to its own rules, a commission of even one “sin” qualifies as “greenwash.”

I’ll admit to some subjectivity here, but that’s partly the point. Many of these things aren’t clear-cut, despite TerraChoice's seemingly definitive pronouncements. For example, I’m guessing that SC Johnson’s Greenlist labels have been deemed by TerraChoice to be greenwash, because they’re self-certified, not verified by an independent third party. True, but SCJ’s Greenlist program — an environmental classification system designed to systematically measure, track, and reduce environmentally problematic ingredients across the company's entire product line — has won a Presidential Green Chemistry Award and accolades from environmental and industry groups. It does not mislead or cover up. I don’t consider it to be greenwash. I’m pretty sure TerraChoice does, however, because it likely commits one of its “sins.”

I say I'm “pretty sure” because TerraChoice won’t say. There are no names named about what specific sins were committed. (See “Sin of No Proof.”)

I asked Scott McDougall, TerraChoice’s president, why his company — which is so critical of those who fail to be accountable or transparent — is itself unwilling to name companies or products, or give examples of companies or products that fail to meet its test?

“Our desire is to be constructive, to improve the understanding and quality of claims-making and to focus on shared lessons,” he responded. “It is already difficult enough to get media to use the study this way. To name names would distract entirely and would encourage, we suspect, a witch hunt.” He placed the burden on others — the U.S. Federal Trade Commission, for example — to “identify culprits.”

Naming “culprits” is one thing. Giving concrete and instructive examples that illustrate what TerraChoice considers greenwash is another. Even anonymous or disguised real-life examples would help readers understand what greenwash looks like, and would provide a level of confidence that what TerraChoice calls greenwash meets some reasonable standard. (Did I mention that the word has no legal definition?)

It’s also worth pointing out that there’s more than a little self-interest going on here: TerraChoice (and UL Environment) is in the business of both creating green product standards and selling claims verification services to product manufacturers. As such, the company is not an innocent, independent bystander here. It has a vested interest in fanning the flames of what it dubs the “significant problem” of greenwash. To the extent that marketers get spooked, they’ll need TerraChoice’s help.

Of course, I don’t really consider the “Sins” authors to be greenwashers. I know McDougall and the other principals behind the report and consider them to be earnest, ethical, and committed individuals. The “sins” they have committed, at least by my reckoning, don’t brand them as evil. They are, at worst, publicity-seeking entrepreneurs seeking to differentiate their brand in an increasingly competitive environmental marketplace.

That is to say: They are green marketers.

I’m afraid that those who read TerraChoice’s report won’t be quite so charitable when it comes to rendering judgment on the universe of green-marketing “sinners” that have been universally tarred by TerraChoice’s brush.

I wouldn’t blame shoppers for ending up more confused and cynical than ever. And I wouldn’t be surprised if some companies thinking about touting their green innovations and achievements decide to go back into their shells, keeping mum.

And that would be the biggest sin of all.

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