GreenBiz and GreenYour: Something Old, Something New
Something old is new again. GreenBiz.com, of which I am executive editor, has just relaunched with a new, improved format. The new site — the result of a revamping of the somewhat antiquated technology platform on which the site was originally built in 1999 — now reflects the topics you deal with daily: energy and climate; the various aspects of daily operations, from purchasing to cleaning to fleets; the design of products and packaging; the more efficient use of energy, water, and materials; and the way you communicate all of this through marketing, PR, and reporting. There are also sections for smaller businesses and on green careers.
Kudos to the team, headed by Matt Wheeland and Carlie Peterson, for making it all happen.
The new look represents the beginning of a forthcoming wave of new products and other enhancements we'll be making in coming months. Look for new newsletters and sites, and a few surprises.
And while we're on the topic of GreenBiz, please check out Greener by Design, our forthcoming conference on the mainstreaming of green product design at both big companies (Clorox, Dupont, GE, GM, IBM, Nike, Procter & Gamble, Wal-Mart, Xerox, and others) and smaller ones (Method cleaning products, TerraCycle garden products), as well as insight into how green innovation happens inside big organizations. There will also be some features that are not your usual conference fare — such as Green Gurus @ Play, during which conference participants will engage in small consulting sessions with select speakers and panelists (on a first-come, first-served basis); Innovative Flashes; and other experiential opportunities that get past conventional talking heads.
(Also, per my style: almost no speeches or presentations — rather, conversations facilitated by pro's, such as Marc Gunther of Fortune.)
Registrations are rolling in nicely, and the event — June 12 and 13 — is likely to sell out. Don't say you weren't warned.
Meanwhile, my colleagues at GreenOrder have launched a new site that offers a world of green possibilities. GreenYour.com is a smart and information-packed site offering tips and products on the greening of just about everything.
The site features more than a dozen categories of topics — appliances, personal care, energy use, lawn and garden, clothing, car, food and drink, travel, etc. Each category drills down further into subcategories and sub-subcategories — for example, under "Office and School" there are business operations (building, business travel, career, company values, lighting, mail, staff commuting) and office supplies and equipment (batteries, cell phone, computer, copier, copy paper, mobile device, printer).
Under each are clearly written tips, fact, and products. If you register (free), you can register your own tips, products, and resources — the wisdom of crowds.
It's a work in progress, but off to a promising start. For all of the hundreds (thousands?) of consumer-facing websites out there, no one offers such clear, no-nonsense, and accessible information on life's basics. The fact that experts can add their own two cents will no doubt make the site richer and richer over time.
As they say, none of us knows as much as all of us.
April 28, 2008 in Green Marketing, State of the Art, Trendwatching | Permalink | Save This Page | Comments (2)
Earth Day, Green Marketing, and the Polling of America, 2008
It's time for my (second) annual survey of surveys — the bounty of public opinion polls on green topics that seems to sprout every spring in time for Earth Day. A half-dozen or so years ago, there were perhaps a couple such surveys. Today, there are more than a dozen, ranging from substantive to silly to self-serving.
All told, they paint a portrait that hasn't changed much over the past twenty years: The public wants to buy green products and support good companies. Of course, what this means — and how to define both "green" and "good" — is where the devil meets the eco-details.
But there's something slightly different about this year's bumper crop of data. A shred of realism seems to be creeping into the mix. Whereas such polls traditionally were pretty enthusiastic, a few now acknowledge that the green marketplace is no bed of organic roses, thanks in large part to consumers' lack of understanding of key environmental issues, and their innate distrust of companies' green proclamations.
The overly enthusiastic tone of some polls is understandable, once you scratch the surface. Market researchers proffer tantalizing sketches of the various eco-minded personalities, hoping to entice corporate clients to pay the big bucks for more in-depth and customized data. And then there are the fairly blatant self-serving surveys. A provider of videoconferencing technologies reports that a significant number of workers would prefer to participate in an important meeting by phone or web conference! Well, of course.
So, what did this year's surveys reveal? Here are highlights:
- Almost four in 10 Americans are preferentially buying products they believe to be environmentally friendly, though almost half (48%) erroneously believes such products are beneficial for the planet, as opposed to simply being less harmful, according to the 2008 Green Gap Survey from Cone LLC and the Boston College Center for Corporate Citizenship. It also found that Americans are pretty open to companies' green messages: 47% trust companies to tell them the truth in environmental messaging; 45% believe companies are accurately communicating information about their impact on the environment; and 61% say they understand the environmental terms companies use in their advertising.
- Gallup's annual environment poll found that 28% of Americans say they have made "major changes" in their lifestyles to protect the environment. Forty percent say they worry "a great deal" about "the quality of the environment," ranking far below the 60% who worry about the economy and the 58% who worry about the availability and affordability of healthcare.
- Almost 200 million Americans buy green products, reports the market research firm Mintel, which also found that the number of new products with an environmentally friendly claim has grown substantially over the past five years — from five such product launches in 200 to "a staggering" 328 in 2007. "Price, perceived value and convenience drive these purchases as more and more people take on a green lifestyle," the company reports. "Thanks to manufacturers' recent moves, consumers can now find more choices of environmentally friendly products than ever before." (Mintel doesn't put these 328 new green products into perspective, one of my pet peeves. So I will: There are about 20,000 new product introductions a year in just the food and beverage category.) Another Mintel study reported that "over one-third of adults (36%) claim to 'regularly' buy green products," triple the number 16 months ago.
- Consumer recall of advertising with green messaging is very high, with more than a third (37%) of consumers saying they frequently recall green messaging and an additional third recalling it occasionally (33%), according to Burst Media. (Again, some perspective would be helpful here: How does 37% compare with overall add ad recall?) One in five (23%) respondents say they seldom or never believe green claims made in advertisements. Two-thirds (65%) of respondents say they "sometimes" believe green claims made in advertisements, and 12% say they "always" believe green advertising claims. More than 40% of consumers frequently or occasionally research the claims made in green advertisements.
- Consumers expect to see significant company commitments to environmental leadership before they buy the green marketing hype, according to marketing firm EcoAlign. Seventy-seven percent of consumers think that an operational commitment to energy efficiency or green energy is the single most important quality of a corporation trying to be an environmental leader. When respondents asked which of 12 major companies they thought were most committed to using or providing renewable energy. GE dominated with 81%, while Toyota came in second at 65%. However, 54% of consumers had difficulty naming any company that supplied renewable or green energy. GE and BP received the most mentions, but only represented 4% to 5% of responses. (In reality, neither firm supplies much if any green energy, though both manufacture solar panels and GE manufactures wind turbines; BP has a tiny renewable energy division, representing less than 1% of its total revenue.)
- One in ten Americans say that they have looked up their personal or household's carbon footprint, according to Harris Interactive. Younger Americans are more likely to have done so. Almost one in five (18%) Echo Boomers (aged 18-31) say they have looked up their carbon footprint, compared to 11% of Gen Xers (aged 32-43), 9% of Baby Boomers (aged 44-62), and 6% of Matures (63 and older). Regardless of whether they are calculating their carbon footprint, Americans claim that they are doing things that will reduce it and their carbon emissions. Almost two-thirds say they may have reduced the amount of energy they use in their home, 43% have purchased more energy-efficient appliances, 27% they have started purchasing more locally grown food, and 21% have stopped drinking bottled water.
- Only 3% of consumers "always" buy green products and 66% said that they "sometimes" purchase them, according to the Shopper Environmental Sentiment survey from corporate real estate giant Jones Lang LaSalle. The survey was taken across 34 Jones Lang LaSalle-managed shopping malls. Around 40% said that they were willing to "do what it takes" to protect and improve the environment, and more than half always recycle at home. Almost two thirds of respondents were interested in learning more about simple ways to save energy.
It's a mixed bag of data, to be sure — and more than a little bewildering. Are consumers really making "major changes" in their lifestyles and purchases, as Gallup reports? Are individuals' carbon footprint numbers on their way to becoming as ubiquitous as cholesterol numbers, as Harris suggests? Are we making more environmentally conscious purchase decisions, as Cone and others report? Will four in ten consumers really "do what it takes" to solve our environmental problems, as Jones Lang LaSalle found? As I have stated so many other times (see here, here, here, and here), I'm a tad skeptical.
One thing is clear: The din is growing. A Nielsen BuzzMetrics report, Sustainability through the Eyes and Megaphones of the Blogosphere, found that the "buzz around sustainability" grew 50% last year. Given the dozens of new books, TV specials, Earth Day events, and green advertising campaigns abounding this April — with more of all of these to come — it's safe to say that the buzz will continue for a while.
The question, as always, is whether (or when) the frenzy will yield to fatigue.
April 20, 2008 in Green Marketing, Trendwatching | Permalink | Save This Page | Comments (9)
Green Corporate Communications: The Unstoppable Urge to Talk the Talk
I've spent the past few weeks on the road talking about the State of Green Business, listening to the questions and concerns of audiences at the companies and conferences I've addressed. There's one constant query: In a world gone green, how does a company make itself heard, credibly and authentically? And how does it do this in a way that minimizes the risks of being charged with greenwash, or worse?
The questions themselves represent a sea change. For years, companies have been satisfied to walk more than talk — that is, do more, environmentally speaking, than they'd publicly disclose. It's not that these companies were being virtuous, or that they didn't care about the world knowing of their green commitments and achievements. Far from it. But the corporate risks of sticking one's neck out, calling attention to what a company is doing right, often unwittingly illuminates environmental problems about which the public wasn't aware. (You're using 10% organic cotton? Why? Oh, because growing cotton requires intensive pesticides, harming groundwater, farmworkers, and wildlife? Gee, why only 10%? Why not 20%?)
So, being humble was a virtue. Of course, companies maintained hope that some enterprising reporter or activist would catch them in the act of being good and lead to positive press or word of mouth. It happened from time to time, but not often enough.
Now things are changing. As the conversation has ratcheted up in recent months, being quiet is no longer an asset. Companies are being pressed to talk about what they're doing — and not doing — by customers, employees, investors, activists, and others. Previously reclusive companies are rethinking their taciturn strategies.
Suffice to say, shyness isn't something that becomes a lot of companies, many of which have no problem shouting their stories from the rooftops. Some of these stories are worthy of attention; many aren't. Unfortunately, there's no correlation between signal and noise, as a recent study by the U.K. firm Genesys Conferencing found out:
U.K. companies are failing to match fine words with positive action in implementing green policies throughout the business, with fewer than one third of respondents believing that they are moving strongly or very strongly to adopting 'green' policies in their organisations.
"Visitors to any company's website today are almost certain to find a stated commitment to the environment," says Jerona Noonan, sales director, Genesys Conferencing. "Yet, as this survey shows, to-date in most businesses this has not been put into practice in the form of positive environmental initiatives.
The need to align the walk-talk ratio has caught the attention of those in the business of helping companies tell their stories. They, in turn, are sharing their insights with the rest of us. A sampling of what's crossed my in-box in recent weeks:
confirms the existence of a green gap between the communications and language commonly used by companies and stakeholders in the energy and environment space and customers' understanding, acceptance and perceptions of value around terms such as energy efficiency, energy conservation, demand response, smart energy and clean energy. The green gap in communications contributes to a growing misalignment between customers' stated intentions, e.g., their desire to be more green or frugal with energy consumption, and their actual behavior
Translation: When it comes to energy and environment, companies don't speak to consumers in a language they understand, undermining green behavior.
For example, most consumers can't articulate the difference between the "energy conservation" and "energy efficiency" and only one in three Americans understands the term "smart energy." Four in ten don't know what "demand response" refers to (and the rest are probably lying — it's pretty geeky terminology).
What does it all mean? The sum of all of these reports is pretty clear: Talking the green talk is no simple matter, what with the lack of definitions, the high expectations, and the countless critics and watchdogs ready to pounce if you don't get it right. The public is hungry for companies to look up to, but they don't trust what they hear. Like an oft-spurned lover, they are cautious and wary of being seduced — though always hoping that this time it just might be the real deal.
February 18, 2008 in Green Marketing | Permalink | Save This Page | Comments (10)
Clorox Aims to Show that 'Green Works'
Can a major consumer packaged goods company with a name indelibly associated with household bleach become a leading light in the green marketplace? That's the hope of Clorox, the Oakland-based company, which this week is launching its first new brand in twenty years: Green Works, a line of cleaning products that are, in the company's words, "at least 99 percent natural" — made from coconuts and lemon oil, formulated to be biodegradable and non-allergenic, packaged in recyclable bottles, and not tested on animals. The initial launch includes five products: an all-purpose cleaner, a glass cleaner, a toilet bowl cleaner, a dilutable cleaner, and a bathroom cleaner.
It's an intriguing moment. Green Works enters the marketplace with a near perfect storm of market conditions: growing mainstream consumer demand for green products that don't require compromise or sacrifice; significant interest from Wal-Mart and other big retailers in pushing greener products to the masses; a product that seems competitive with the leading green brands; and endorsement from Big Green.
That last item comes in the form of an "alliance," just announced, with the Sierra Club, which has endorsed Green Works and whose logo will appear on Green Works labels starting around Earth Day. Sierra Club will receive an unspecified financial payment. Sierra Club doesn't often endorse products, especially ones from big companies. The last one I can recall was Ford's Mercury Mariner Hybrid SUV, back in 2005.
The idea of Clorox as a green leader may strike some as odd. The company is known mostly for its flagship product, Clorox Bleach, which is seen by some as a stain from an environmental perspective, though the company says the product is misunderstood and safe. (Green Works products do not contain bleach.) Household bleach, it explains, is a water-based solution containing six percent sodium hypochlorite, whose chemical symbol, NaOCl, is essentially table salt (sodium chloride, or NaCl) with a molecule of oxygen. That is, bleach comes from, and degrades into, salt. (You wouldn't want to drink it, but you wouldn't want to eat a cup of salt, either.) Moreover, the company points out, bleach's disinfectant properties are essential to public health — endorsed by the World Health Organization and others.
Some environmentalists warn against using bleach, pointing out that it is toxic and corrosive and can create suspected carcinogens in the water supply. Suffice to say, Clorox refutes this. "The bleach cycle — from production to use to environmental fate — is simple and sustainable," it maintains.
So, can The Clorox Company become a green brand leader? I spent some time last summer talking with the company about Green Works, part of a small consulting project. I was asked to help Clorox think through how it was positioning both Green Works and the company itself in advance of the product launch. I met with the Green Works brand and marketing managers, as well as the company's corporate responsibility staff — a relatively new function there.
What I found was that the company — whose brands include Glad, Formula 409, Liquid-Plumr, S.O.S. Pads, Kingsford charcoal, Ever Clean kitty litter, Brita water filters, Hidden Valley salad dressings and, as of about ten weeks ago, Burt's Bees personal care products — had a relatively blank slate from an environmental perspective. It did not have any significant skeletons. It enjoyed a solid compliance record, has joined several voluntary programs to reduce waste and emissions, and has received modest recognition for its performance. Except for concerns about bleach, it has been largely off activists' radar. From an environmental perspective, it was neither a leader nor a laggard.
Under CEO Don Knauss, who joined the company in 2006 from Coca-Cola, Clorox began to recognize that environmental and social sustainability are of growing importance for the company. By the time I showed up in July, Clorox had undertaken efforts to reduce its packaging and had begun to inventory its carbon footprint across its North America operations. (Among other things, the company is working to make the Green Works manufacturing process carbon neutral.)
Green Works seems to have potential to be a breakthrough brand — a line of cleaners competitive, environmentally speaking, with the leading green brands like Seventh Generation and Method, effective enough to wear the Clorox label, priced less than other green cleaners, and enjoying widespread distribution; Wal-Mart, for one, will be featuring the products in its stores. If one of the goals of the green consumer revolution is to get brand leaders to create greener products at affordable prices, this seems a significant step in the right direction.
Green Works' roots go back about three years, when a small group of individuals within the company began investigating the green-cleaning market and conducted market research. Through a market-segmentation exercise, they identified a slice of the consumer market they dubbed "Chemical Avoiding Naturalists," consumers who wanted greener cleaners but felt the incumbent products didn't work well, came from brands they didn't know or trust, were too expensive, and weren't always available where they shopped. These are the folks who want strong, effective cleaners, but worry about their health effects — the ones who say, "Let's open the windows and send the kids outside — we're going to clean now!"
As the team developed and tested products with real consumers, they recognized they had a potential hit. "We were actually in a perfect position as a company," Jessica Buttimer, Green Works' director of marketing, told me last fall. "We have the Clorox brand. We have these distribution channels and great relationship with Wal-Mart. We have the science to make an efficacious product. And we have the scale to charge just a 20 percent premium, not a 100 percent premium." Moreover, Buttimer and her team found that consumers trusted the Clorox brand and the fact that a greener cleaner was coming from a company they'd known for years.
But the kicker was that the product actually did what it was supposed to do. "We did blind testing versus the market leaders," says Buttimer. "We were at parity or better in performance, which as a chemical company, you can imagine, was a huge surprise — that these things, with 99% or more natural ingredients, work as well as Lysol, 409, and Pine-Sol."
Time will tell whether Green Works will be a game-changer — whether it will make green cleaning more affordable and accessible to the masses. But the potential is there. Clorox doesn't launch a new brand unless it sees a $100 million or greater market opportunity.
But there's a potentially bigger story here. Clorox — a 95-year-old, relatively stodgy company — seems to have discovered its green gene. CEO Knauss has identified sustainability as one of three core consumer trends with which he wants to align Clorox products. The combination of Green Works, Burt's Bees, and Brita give it a toehold in that market space, a foundation on which it can build more offerings. Already, additions to the Green Works line are being planned.
All of which has invigorated the company, says Buttimer, a thirtysomething mother of two who has become the corporate face of Green Works. "I can't keep my calendar clear of associate marketing managers, our entry-level positioning and marketing people, asking, 'How do I work on this project?' Or people coming to me and announcing, 'My parents are members of Sierra Club.' Everyone wants to be involved."
Moreover, she adds, "What's really exciting is that we're building knowledge and confidence within the rest of the company that we can do the same things with a lot of our other product lines."
A green Clorox? Anything's possible.
January 13, 2008 in Business Practices, Green Marketing | Permalink | Save This Page | Comments (18)
News Flash: 110% of Consumers Shop Green!
This just in: pretty much every consumer is concerned about the environment and is thinking conscientiously about what they buy — how it's made, under what conditions, and by whom. All you have to do is make good, green stuff and they'll buy it! We've reached the tipping point!
Sound too good to be true? It is, of course. But you wouldn't know it from the marketing studies I've been seeing — and the breathless headlines that result. As they continue to invade my in-box, I find myself getting increasingly irritated. Can market researchers be accused of greenwash? I'm beginning to wonder.
Two examples:
I don't profess to have studies that refute these, but you don't need to be a social scientist to know that neither of the above conclusions is on the money. Half of consumers do not consider sustainability when buying packaged goods — everything from cosmetics to cleaners, Rice-a-Roni to razor blades. (Do half your friends and family members shop this way?) And to think 90% of us are "conscious consumers" when it comes to the planet? C'mon. Half of us aren't even conscious about what we put into our bodies.
Such studies aren't new. They have been coming out for years, boasting about the high percentage — usually, a significant majority — of consumers that say they are integrating environmental and social considerations into their purchases. I've written about some of these in the past (see here, here, and here).
I don't mean to suggest that any of these research firms are misleading us. I know many of these people, and they are as earnest and diligent as the day is long. They ask questions, get answers, and crunch the numbers. But common sense — or simply looking around — shows us how far reality is from these numbers. Walk the aisles at your local supermarket or big-box retailer. How many of the products you see reflect sustainability values? How about the companies that make them? How about the stores that sell them? How many shoppers are bothering to ask such questions?
Things are changing in ways that make some of these reports more sinister than seductive. Over the past six months, the G-word — greenwashing — seems to have risen from the dead to become a vibrant part of the conversation. There's now a Greenwashing Index, a Greenwash Brigade, greenwash lists, and lots of handwringing. And, of course, the Six Sins of Greenwashing.
It's all good. As the number of companies making green claims grows — by the way, has anyone actually measured that growth? — we need vigilant watchdogs, even though there's far from unanimity about what is, and isn't, greenwash. (Ad Age's list of 2007's best and worst is telling — note that GE (via NBC Universal), Toyota, and Wal-Mart all showed up on both the good and bad lists.)
In that light, these green consumer studies seem something of a sucker punch. "Come on, jump in. There's a vast audience waiting to buy what you sell. But it better be damn green, and your messaging better be pitch perfect in both tone and content. And your company better not have any skeletons, or be doing anything environmentally untoward or selling other products that don't seem green."
We want it both ways. We want companies to do better, to green up their products, and to distribute them far and wide. We have high hopes and higher expectations. But we lack standards and basic agreement about how good things have to be — the products as well as the companies that make them.
How does a company operate in an world of hyped-up market research, few norms or standards, and sky-high expectations from consumers and activists who monitor their every move?
I'm not suggesting that we take whatever companies dish out. We need to shift products and markets in significantly greener directions. And they need to be good-quality, affordable products. Anything less is wasting our time and money — both limited resources, one of them nonrenewable.
What do you think? Should we be flaunting studies that don't jibe with societal or market realities, then punish manufacturers that seek to tap those markets if they are less than perfect? How do we accelerate the growth of the green economy and still maintain high standards? How do we encourage companies that are trying, while pushing them to aim even higher?
To what standards should we hold companies? To what standards should we hold ourselves?
January 10, 2008 in Green Marketing | Permalink | Save This Page | Comments (8)
Introducing . . . The Eco-Friendly Cigarette?
What would you say if I introduced you to an environmentally friendly cigarette — one made of organically grown tobacco, with organic cotton filters, rolled in eco-friendly paper, all manufactured with renewable energy, with a portion of proceeds going to environmental charities?
I'm guessing you would call it greenwash. And you'd be right. After all, a cigarette is a cigarette, in terms of the health effects on its users. No green manufacturing techniques would render it "good." At best, it would be "less bad," but not by much.
Given that, I'm bemused and bewildered by the recent efforts by bottled water companies to aggressively market a less-bad product. Two examples:
At a recent conference at which I spoke, attendees were given bottles of Ice Mountain Natural Spring Water, with signs promoting its "New Eco-Shape™ Bottle." Among its green characteristics: it is made with 30 percent less plastic than the "average" bottle of its size. And it features a label that is 30 percent smaller.
That's not all. It is "100 percent recyclable" . . . "Easy to carry" . . . and "flexible so it's easier to crush for recycling."
It doesn't take a PhD in marketing to see that these claims are pretty thin. A label that's 30 percent smaller?!? If that's the pinnacle of environmental achievements, we should all give up now.
And then there's the latest blast from Fiji Water, which is trumpeting that in 2008 it will introduce "the first 'carbon negative' consumer product." According to the announcement:
As one of the fastest growing, leading premium bottled water brands in the world, Fiji Water's new aggressive environmental program — Fiji Green — aims to "green" every step in the life cycle of its products, from packaging and shipping to the use of renewable energies and land preservation efforts. As a result, Fiji's will lessen its environmental impact by actually reducing carbon in the atmosphere with every bottle of Fiji Water produced and sold. No other major beverage brand has ever made a similar commitment to help mitigate the effects of climate change.
And there you have it: the eco-friendly cigarette — two bottled-water brands that are attempting to "green up" their products, and their images, by doing less bad.
Bottled water isn't a cigarette, of course. It doesn't cause cancer, emphysema, birth defects, and the like. So, my analogy is, admittedly, a bit dramatic.
But bottled water causes plenty of problems. Its production taxes the water tables of the communities where bottling plants are located, according to the Earth Policy Institute. Farmers, fishers, and others who depend on water for their livelihoods suffer from the concentrated water extraction when water tables drop quickly.
And then there's the energy use. EPI notes that:
In contrast to tap water, which is distributed through an energy-efficient infrastructure, transporting bottled water long distances involves burning massive quantities of fossil fuels. Nearly a quarter of all bottled water crosses national borders to reach consumers, transported by boat, train, and truck.
Or consider the fact sheet I received recently from the Pacific Institute, one of the most authoritative sources on water issues, and author of the biennial reference work, The World's Water. It cites data from the Beverage Marketing Corporation, which reports that
Americans bought a total of 31.2 billion liters of water in 2006, sold in bottles ranging from the 8-ounce aquapods popular in school lunches to the multi-gallon bottles found in family refrigerators and office water coolers. Most of this water was sold in polyethylene terephthalate (PET) bottles, requiring nearly 900,000 tons of the plastic. PET is produced from fossil fuels - typically natural gas and petroleum.
Based on this, the Institute estimates that in 2006:
- Producing the bottles for American consumption required the equivalent of more than 17 million barrels of oil, not including the energy for transportation
- Bottling water produced more than 2.5 million tons of carbon dioxide
- It took three gallon of water to produce one gallon of bottled water
Given all this, should we be touting an eco-friendly plastic water bottle, or a carbon negative product shipped roughly 7,000 miles to market? Is this a valid environmental claim? Is that the best we can do?
It all brings to mind that age-old question: If a cannibal eats with a fork, is that progress?
I think not.
December 17, 2007 in Green Marketing | Permalink | Save This Page | Comments (21)
The Six Sins of Greenwashing
Is green marketing just a series of lies?
That's one conclusion to be drawn from a new study that examines hundreds of environmental labeling claims and found pretty much all of them wanting, suffering from sins of either omission or commission.
Is it any wonder that consumers are overwhelmingly wary of green marketing and view it as "just a sales tactic"?
Or that while market researchers swear that majorities of consumers want to make green choices, most green products garner only small slivers of the market?
This past spring, TerraChoice Environmental Marketing, which consults on green marketing and administers its own labeling and certification program, sent research teams into six category-leading "big box" stores with orders "to record every product-based environmental claim they observed." TerraChoice instructed the teams that, for each environmental claim, they should "identify the product, the nature of the claim, any supporting information, and any references offered for further information."
The products studied included a wide range of offerings, from air fresheners to appliances, televisions to toothpaste. In total, the team identified 1,018 products making 1,753 claims. Of those products, "all but one made claims that are either demonstrably false or that risk misleading intended audiences."
That's right. Only one — a house-branded paper product sold by one Canadian retailer — came through unscathed.
The result of this exercise can be found in a new report, "The Six Sins of Greenwashing", a sobering and slightly depressing look at today's green marketplace. Over the past two weeks, I've had a chance to review the report and discuss it with Scot Case, vice president of TerraChoice and the report's principal author. (You can hear an interview I did with Case on GreenBiz Radio.)
I'll be honest. As skeptical and critical as I've been on green marketing in recent years, I didn't believe TerraChoice's findings at first. When Case first told me what he and his team had found, I assumed they had set an impossibly high standard for green claims.
In reality, TerraChoice simply wanted some basic facts: "What proof is there that a product actually meets this claim?" Case asked. "What we found was that a vast majority couldn't answer simple questions."
Case explained to me the evaluation process:
We actually pulled out all of the different environmental marketing guidelines. We looked at what the Federal Trade Commission says about environmental marketing claims. We looked at the U.S. Environmental Protection Agency's recommendations. We looked at ISO's recommendations. We looked at what Consumer Union, the publisher Consumer Reports, said about it.
And we said, Okay, these are going to be the standards to evaluate environmental claims. So we took these 1,018 products. We squished them through these different environmental claims and only one popped out the other side as not having committed what we're now calling one of the "six sins of greenwashing."
The "sins" identified by TerraChoice include:
- Sin of the Hidden Trade-Off — claims that suggest a product is "green" based on a single environmental attribute (the recycled content of paper, for example) or an unreasonably narrow set of attributes without attention to other important, or perhaps more important, environmental issues (such as the energy, climate, water, or forestry impacts of paper). Such claims aren't usually false, but paint a misleading picture of the product than a more complete environmental analysis would support. This was the most frequently committed "sin," made by 57% of all environmental claims examined.
- Sin of No Proof (26% of all claims examined) — any claim that couldn't be substantiated by easily accessible supporting information, or by a reliable third-party certification. TerraChoice determined there to be "no proof" if supporting evidence was not accessible at either the point of purchase or at the product website.
- Sin of Vagueness (11% of all claims examined) — any claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the intended consumer, such as "chemical free" or "all natural."
- Sin of Irrelevance (4% of all claims examined) — claims that may be truthful but are unimportant and unhelpful for consumers, such as CFC-free products, since ozone-depleting chlorofluorocarbons have been outlawed since the late 1980s.
- Sin of Lesser of Two Evils (1% of all claims examined) — environmental claims that may be true, but that risk distracting the consumer from the greater environmental impacts of the category as a whole, such as organic tobacco or green insecticides.
- Sin of Fibbing (less than 1% of all claims examined) — claims that are simply false, typically by misusing or misrepresenting certification by an independent authority, when no such certification had been made
I'm not sure all of these "sins" qualify as greenwashing, which I define as an intentional effort to misrepresent a product, service, or company as being environmentally responsible or improved. True, some of the claims TerraChoice examined represent outright fabrications. But much of this is less sin than sloppiness -- marketers' efforts to place a green sheen on a product, perhaps rightfully so, but without offering some basic proof points.
Either way, it's a pathetically poor performance for marketers.
And it's all too reminiscent of the early 1990s, when the modern green consumer movement began, at least in the U.S. Many of the products introduced at the time — recycled paper towels, green cleaners, biodegradable trash bags, energy-efficient lights, and more — were similarly poorly documented or misrepresented by their manufacturers and marketers. The ensuing reprimands by government agencies, environmental groups, and enterprising journalists did a great deal to sour consumers' appetite for green products, some of which still lingers today.
None of this bodes well for the growing green marketplace. As major retailers like Wal-Mart, Home Depot, and Staples stock their shelves with a steady stream of environmentally preferable products, and thousands of both big and small manufacturers introduce environmental improvements and innovations into their product lines, the need for accountability will multiply. And without even a modicum of scrutiny, we'll see a Wild West of Green, in which marketers can make pretty much any green claim with impunity.
What will it take to bring honesty, accuracy, accountability, and transparency to the marketplace? Who will pick up where TerraChoice left off, scrutinizing products making green claims? Who will hold companies accountable?
The obvious answer, of course, would be for a trusted environmental label to emerge — a Green Housekeeping Seal of Approval, or some such. But there already are a myriad of eco-labels — Consumer Reports lists 147 of them — and none (including TerraChoice's own labels) has made significant inroads. Except for the government-controlled organic certification and the Energy Star label, you'd be hard-pressed to find more than a handful of green-labeled products in a typical store.
Who will step up? In the 1990s, in the wake of the greenwashing claims of the day, the U.S. Federal Trade Commission chimed in, issuing environmental marketing guidelines that, while weak, still make basic sense today. The FTC also took on a small number of product purveyors, essentially slapping their corporate wrists for their marketing misdeeds. A task force of state attorneys general, headed by Minnesota's then AG, Hubert H. Humphrey III, rode into town, held hearings, and issued two reports, disappearing soon thereafter.
One of those reports, issued in December 1990 (downloadable here - PDF), recommended that:
Environmental claims should be as specific as possible; not general, vague, incomplete or overly broad. Environmental claims relating to the disposability or potential for recovery of a particular product (e.g., "compostable" or "recyclable") should be made in a manner that clearly discloses the general availability of the advertised option where the product is sold. Environmental claims should be substantive. Environmental claims should, of course, be supported by competent and reliable scientific evidence.
That seems like Ethical Marketing 101. Why, all these years later, isn't it being followed -- or enforced?
This time, the stakes are far bigger than in 1990, with bigger companies and retailers entering the green marketplace, bigger environmental challenges confronting us, and bigger portions of the world's citizenry ramping up consumption. The need for products that deliver substantive, if not radical, reductions in their environmental impacts couldn't be greater.
So, TerraChoice should be lauded for its findings, however painful they may be to read. If the misrepresentation in the green marketplace is even half as bad as its report suggests, marketers need far more than wrist-slapping.
Says Case:
I think the real danger is if people are successful with their greenwashing efforts, then the truly green, the truly innovative companies — the ones that have really figured out how to reduce their carbon footprint, how to produce a nontoxic product, how to make products out of renewable materials that can be reused — the truly innovative products are going to lose out.
As will we all.
November 18, 2007 in Green Marketing | Permalink | Save This Page | Comments (14)
NBC's "Green Week": Not Media Business as Usual
This is "Green Week" at NBC Universal, a seven-day revelry of environment-themed content spread across the company's various TV channels and other properties. The 150 hours of programming — integrated into everything from news and sports to soaps and entertainment — is certainly a first for a major media company.
What, really, is NBC doing? Is this a one-off stunt intended to "green up" its image before it returns to, as they say, regularly scheduled programming? Or is this something more substantive, more integrated, longer-term — a milestone in the greening of the mainstream media? (Disclosure: NBC Universal, like its parent company, General Electric, is a client of GreenOrder, with which I am affiliated.)
I've watched the process unfold, reviewed strategy documents, and talked to the company about its efforts. My only-slightly-biased conclusion: There's more going on here than meets the eyeballs that NBC is trying to attract.
First, the basics. Green Week involves the full spectrum of NBC properties, including its eponymous TV network as well as CNBC, MSNBC, NBC News, NBC Sports, SciFi Channel, Sundance Channel, Bravo, USA Network, and Telemundo — plus Universal Studios and its related theme parks, and the company's websites, including female-focused iVillage. Dozens of shows will have environmental themes or messaging, from Sami and Lucas' green wedding on "Days of Our Lives," to MSNBC's examination of green issues in the 2008 presidential campaign, to "The Office" (based at a fictional paper company) considering recycled paper, to CNBC's broadcast from a clean-tech conference. Tom Brokaw, Matt Lauer, Bob Costas, and other heavyweight talents have been conscripted into the effort. Local NBC stations will incorporate green-themed stories into their newscasts and some will run a half-hour special on "Going Green at Any Age!" Universal Pictures will run environmental public service announcements as part of its online movie trailers and as ads in theater lobbies.
There's more. You get the idea. Suffice to say it's a full-court press.
The whole endeavor no doubt makes great fodder for cynics: What is the company's actual environmental commitment? Is it walking it's talk, or just preaching? Is this just another way to tap into the growing wave of advertisers' green(washing) pitches? Will consumers even care? And why only one week — shouldn't it be a year-round commitment?
In a nutshell: What's really going on here?
"The time became right to recognize that green is a rapidly growing cultural and business phenomenon and is presenting brand new opportunities and challenges," Lauren Zalaznick, president of Bravo Media, who heads NBC Universal's Green Council, told me last week. "And that, as a company, we should be the green media market leader, and be ready."
Zalanick says the company identified three key "customers" for this effort: consumers of its programs, movies, theme parks, and other properties; advertisers, of course; and the company's 16,000 worldwide employees. Regarding that last group, she says, "We want college grads coming into the marketplace — 80 percent of whom say they want a job with positive environmental impact — we want them here. We want to be best in class in every way as an employer of choice."
Interestingly, when I asked Zalanick where she anticipated the most push-back about Green Week, it was this same internal group. "There's no one more cynical than a disgruntled group of large conglomerate employees. They have had many, many, many mass e-mails and initiatives. The longer they're here, the more they say, 'I've seen things come, I've seen things go.' So we have a great challenge to be very real."
"Very real," explains Zalanick, includes various efforts to reduce the company's environmental impacts, including replacing a fourth of its vehicle fleet with hybrids by the end of 2007, evaluating its paper suppliers for environmental content (the company's office paper currently contains one-third recycled content), and conducting an environmental audit of its facilities worldwide. (NBC Universal will work with GreenOrder to provide an independent, quantitative analysis and verification of its environmental footprint.)
What about consumers? Will the typical viewer of college football care that next Saturday's Air Force vs. Notre Dame match-up will include a segment featuring Notre Dame student's and faculty's quest to capture carbon dioxide from power plants?
Zalanick believes they will. She cites research conducted last month in which NBC Universal measured viewers' environmental awareness, habits, and expectations. "We heard loud and clear that there was a very high expectation that consumers have about companies. Over two-thirds believe that businesses have some responsibility for the social good. That's a lot." She says the company plans to track audience awareness and actions over time. "We'd like to hear back that we've had an actual impact — that we caused viewers to buy a hybrid, to not buy plastic water bottles, to turn off their power strip instead of the on-off-standby switch. We want those kinds of activation results." It will be a big challenge "activating" mainstream consumers, as most environmental groups and others have learned over the years, but every little bit helps.
Green Week will no doubt rankle some critics as, variously, being too commercial, not green enough, not serious enough, not entertaining enough, or whatever. Says Zalanick: "We're going to be under a microscope. We're going to plead for a lot of attention, and we're going to get it, and we're really going to try to do everything right. What I hope is that the shoutdown of our perceived imperfections doesn't scare anyone else from trying to do it."
Viewed in its entirety, NBC Universal's approach, imperfections and all, strikes me as a substantive — and welcome — contribution from the mainstream media: a synergy of internal programs to reduce the company's footprint and engage its employees and talent, with an external focus on the company's massive, hydraheaded audience reach. And to do so in a wide range of styles, voices, and depth. One internal document positions the approach as "hopeful, empowering, and pragmatic, not moralistic or preachy." Sounds about right.
A big question, of course, is what happens after Green Week is over. Zalanick agrees that environmental content "should become part of the fabric and rhythm of our every day" and that this, indeed, will be the company's long-term goal. (Internally, this has been described as a "multi-year, ongoing initiative.") "I think it's like any pro-social initiative that starts with some particular mandate," she explains. "It starts out as something conscious, something you have to point to. And the road is filled with potholes and cynics. It would be like saying, 'Was our goal in 1987 to hire a woman, then never do that again?' No, the goal was to have it become the fabric of medical schools and law schools and board rooms and everything in between. The goal was to stop talking about it, for it to be part of the everyday."
No one says it will be easy. "We're learning how to walk," admits Zalanick. "In a few years, we won't have to think about walking any more, and our commissaries are going to be right, and our lighting is going to be right, and our corporate car fleet is going to be right. And we're going to know how to do it. What I found is that we were already doing a tremendous amount of stuff that, for a media company, we were not particularly good at communicating. We never took it on as something we needed to prove to the world. I actually think we were incorrect on that."
Will Green Week help position NBC Universal as "the" green media company, attracting new viewers and advertisers, delighting its employees, and luring the next generation of talent along the way? How will all this affect, or infect, its competitors? What will Wall Street think? The rumor mill has GE selling off its media business in order to better focus on its core industrial products. Will being seen as green enhance NBC Universal's market value?
As they say on TV: Stay tuned.
November 4, 2007 in Business Practices, Green Marketing, Trendwatching | Permalink | Save This Page | Comments (9)
The Greening of Travel and Tourism, from Asia to Alabama
My travels over the past month have included speeches to two very different audiences on the same topic: The future of travel and tourism, as seen through an environmental lens. Based on these and other calls I'm getting, it seems that this industry is starting to pay attention . . . but only starting.
The two speeches -- in Bangkok, to the Incentive Travel & Conventions, Meetings Asia/Corporate Travel World conference; and in Gulf Shores, Alabama, to the Gulf Coast Convention and Visitors Bureau -- were striking as much more for their similarities as differences. Both audiences are just beginning to come to grips with a new reality on travel and tourism.
That reality is this: Up to now, the conversation taking place on the environmental front has basically to do with "the impact of travel and tourism on the environment." Increasingly, however, it's turning around: there's a growing awareness of "the impact of the environment on travel and tourism."
(The New York Times wrote on a similar topic this week, in an article on climate change and tourism.)
Indeed, both of my audiences' regions had experienced the tragic ravages of nature: Hurricane Katrina, which swept through the Gulf Coast (though 2004's Hurricane Ivan made more of a direct hit on Alabama's coast); and the 2004 Indian Ocean earthquake and tsunami. Both events decimated their respective tourism industries for a time, and both regions are still grappling with lingering effects, including a more cautious tourist market sensitive to disruptions born of natural disasters.
The two events at which I spoke were different in one key respect. The Asian conference was more business-to-business -- the audience included airlines, hotel operators, corporate travel buyers, meeting planners, and the like, mostly focused on conferences, events, and the "incentive travel" industry -- while the Alabama event was more consumer facing -- Alabama's Gulf Coast attracts largely families and retirees from the South and Midwest, with relatively few conventions or business meetings.
Those differences are significant, and they mirror what's going on in the larger marketplace of green goods and services. There's far more, and more substantive, action on the B-to-B front, as companies in most sectors are leaning lean on upstream suppliers and service providers to reduce costs and environmental impacts and offer their downstream customers less-toxic, better-packaged, and more energy-efficient goods and services. Corporate and some government policies are mandating venues and travel options that include at least some environmental considerations, and a growing number of conferences and meetings are calling themselves "green," whether from reduced waste, lower carbon footprint, or other activities.
Meanwhile, the green consumer marketplace is more of a slog, as I've noted in the past, with fewer genuine success stories among environmentally improved products and services. With the exception of ecotourism -- tours and travel packages that combine some sort of ecological theme, often aimed at well-heeled travelers -- green leisure travel hasn't yet caught on.
As I said, the industry as a whole is just waking up to the realities of a more eco-conscious world. And, to a large extent, they seem to have at least one foot firmly planted in denial that their world will somehow be affected by the world's environmental woes.
They couldn't be more wrong, of course. As the Times made clear, everyone from ski resorts to dive shops are feeling the heat, as it were, from climate change, as tourist-attracting natural wonders -- snow-packed slopes, vibrant coral reefs -- shrink or disappear altogether. In the developing world, where a much greater portion of the economy depends on tourism, this can be particularly devastating. As the Times noted, "In much of Africa, for instance, tourism is the major source of income and often the only source of foreign currency."
It's not just ecotourism spots that are vulnerable. Any destination that depends on visitors arriving by air -- whether tourists or business travelers -- could be hit hard, especially more remote locations like Australia and New Zealand, as well as U.S. hotspots like Las Vegas and Orlando, Fla. Droughts could be another factor crimping the industry, if water rationing limits showers, pool use, water park operation, etc. Don't even think about another SARS-like outbreak of infectious disease, which, some experts say, will be another all-too-frequent manifestation of climate change, and which could dampen people's willingness to travel for both business and pleasure.
Here's one small but significant example of what we're up against. In Bangkok, I gave an hour-long keynote speech that, among other things, challenged the Pacific Rim travel industry to consider how it will remain competitive in an eco-conscious or carbon-constrained world, especially as destinations in Europe and North America increasingly embrace recycling, energy efficiency, sustainable foodservice, carbon offsets, and other practices aimed at reducing the impacts of travel, meetings, and events.
For about two minutes of that hour I spoke about how some companies are starting to use a new, improved generation of teleconferencing technology as a means of reducing business travel, if only by a fraction. For example, I told them, Vodafone has adopted a policy in which employees are now required to justify why they need to fly somewhere, as opposed to using one of the company's 200 teleconferencing centers (or, presumably, simply telephoning). The policy reduced the company's air trips by 20 percent in one year.
"How do you compete in a world in which a portion of business travel is replaced by teleconferencing?" I asked them.
Simply asking, it seems, was a no-no. "Makower Raises Delegate Ire at IT&CMA Meet", trumpeted one industry publication, noting that
His speech prompted a walk out by two Jet Airways executives and upset other suppliers, many of whom were there representing hoteliers and airlines.
Lianne Kelly-Maartens, marketing manager for Sun International in India, said it was the wrong audience for a reduced travel argument. She said she couldn't believe her ears when he started to advocate reduced travel and more video conferencing (with its implied reduced role for hotels) as the way of the future.
“I am well aware of the need to embrace change for the sake of the environment but many people in the audience sponsored the keynote speakers’ attendance through their delegate fees,” said Kelly-Maartens. “It’s like the Rifle Association presenting at a gun control convention.”
Did I mention denial?
(Quick aside: Was it my imagination, or has it been reported that airlines are starting to create teleconference centers inside their major hubs as a nifty means of accommodating both travelers and telecommuters? I swear I'd heard that, but can't find a reference. Anyone?)
It strikes me, as I told both the Asian and Alabaman audiences, that amid these challenges lie opportunities. The Alabama Gulf, fiercely competing with a host of Atlantic and other Gulf beach destinations, might create a competitive advantage by forming a regional commitment to green excellence. That would likely be appreciated by, among others, the growing Boomers population frequenting its towering condos. The region is well on its way, with impressive recycling, biodiesel, land use, and other initiatives already taking place. Such efforts might even help to create new markets for green weddings, business meetings, and other events they're not yet attracting. Meanwhile, Pacific Rim countries, needing to attract Japanese, Australians, and North Americans to remain economically viable, have similar opportunities to compete among themselves to create more environmentally conscious hotels, exhibition halls, and the like, which these travel buyers have increasingly come to expect.
Of course, none of this may stave off the devastation some regions may face in spite of their greenest efforts, should nature wipe out their prime attractions, or should energy markets crimp long-distance travel. Even without an apocalypse, the industry could be in for a tough time.
November 2, 2007 in Business Practices, Climate Change, Green Marketing, Trendwatching | Permalink | Save This Page | Comments (2)
Green Business, in the Land of the Prius
If you had asked me even a week ago whether Japan or the United States was further along in the greening of mainstream business, I'd likely have answered Japan. That country is, after all, the birthplace of the Prius and other eco-efficient vehicles and advanced technologies. It's the homeland of Sharp, the world's largest manufacturer of solar panels. It is a society known for longer-term thinking -- quarters of a century, not quarters of a year -- and for imbuing its citizenry with a sense of national purpose and commitment.
But after my visit to Tokyo over the past few days, meeting with companies and thought leaders in the green business sphere, I'm not so sure. Japanese companies, like their counterparts in the U.S., are engaged and involved in environmental issues like never before. But the conversations I had were strikingly similar to those I have regularly with American firms. Japanese companies are struggling to make the business case for integrating sustainability into core business activities, often working ardently to make what appear to be only incremental improvements. They're frustrated at the lack of government leadership on the topic and trying with only moderate success to turn green commitments into competitive advantage in the marketplace, encountering consumers who say overwhelmingly that they are deeply concerned about the environment, but who seem less than willing to channel that concern into purchases of greener products and services.
Sound vaguely familiar, Americanos?
During my brief visit to Tokyo (en route to Bangkok for a speaking engagement), I had the opportunity to sit down with representatives of Panasonic, the electronics manufacturer, and Sekisui Chemical Co., which makes among other things makes eco-friendly pre-fab modular housing. Both companies are engaged in some form of green marketing campaigns. I spoke at a meeting of the Frontier Network, a consortium of some of Japan's leading corporations working jointly on sustainable supply-chain management and other "frontier" issues, operated by the consultancy E-Square, my Tokyo host.
And I met with two of Japan's green business thought leaders: Tachi Kiuchi, formerly CEO of Mitsubishi Electric America and now chairman of Future 500 and CEO of E-Square; and Kazunori Kobayashi, co-founder of Japan for Sustainability, an NGO promoting Japanese companies' green initiatives, as well as a consultant to many of these companies.
As in America, interest in the greening of business in Japan has accelerated over the past year or so. Al Gore's movie seems to have played a leading role: Just about everyone I spoke with brought it up. "The movie changed the whole atmosphere," Kobayashi told me. One global food company based in Tokyo made it required viewing for all company executives, he said. "They said that those ninety minutes were more important than all of the lectures they'd be hearing for years."
I was six thousand miles from home, but I could have been anywhere in the U.S., given the stories I was hearing. The company efforts and struggles sounded very familiar. One technology company (the Frontier Network event was off the record, so I can't name some names) had developed an e-learning module on environmental issues that it was rolling out to its employees worldwide to make the issues personal and relevant, but the company hadn't done any studies to determine whether the program was having an effect. A financial services firm had launched a socially responsible investment fund, but was struggling to define what stocks should qualify. Panasonic described an "Eco Ideas" label it was applying to its green products, claiming that more than ninety percent of its products qualified. (Katsumi Tomita, from Panasonic's Environmental Planning Group, told me that the company will be rolling out the label in the U.S. in the coming weeks.)
Japanese consumers, for their part, sound just as confounding as Americans. A survey released last week by Accenture -- based on responses from more than 7,500 consumers in seventeen countries in North America, Europe, and Asia -- showed the Japanese even more concerned with environmental issues than the carbon crazy Brits. Accenture asked, "Are you concerned by climate change?" Ninety-five percent of Japanese said they were "extremely" or "somewhat" concerned, compared to 81 percent of Brits (and 73 percent of Americans). Panasonic told me their research found 77 percent of Japanese saying they'd like to buy from environmentally responsible companies, comparable to U.S. numbers. But, Tomita said, while Panasonic's research showed that Japanese consumers are more aware of environmental issues than those in most other countries, his company was uncertain about whether and how much environmental concerns weigh on Japanese purchase decisions.
And so it goes. The mainstreaming of green in Japan, as in America and elsewhere, is far from simple or easy.
Tachi Kiuchi told me how clean technology is on the march in Japan. It's no longer simply a matter of taking others' technologies -- such as American-invented solar panels -- and making them cheaper and better. Now, Japan is creating its own innovations. "From that standpoint, I'm pretty optimistic," he said. "In two or three years time, we'll have things other countries will want."
But Kiuchi isn't as optimistic about the greening of Japanese business. He said change inside companies is coming "gradually, very gradually. Our biggest obstacle is indifference. It's a gradual process and we have to wake them up."
He might as well have been speaking about companies in my country, and in many others.
October 21, 2007 in Business Practices, Green Marketing, State of the Art | Permalink | Save This Page | Comments (12)
Wal-Mart’s Sustainability Summit
Last week's Live Better Sustainability Summit, held just outside of Bentonville, Arkansas, was yet another in what seems to be an accelerating series of "whoda thunk" moments. Bentonville, of course, is hometown to Wal-Mart, which sponsored the event, a daylong conclave that brought together more than a thousand people to a nearby convention center. It was all part of Wal-Mart's latest crusade: to "drive profitable product innovation" into its supply chain.
I had the opportunity to attend, not as a participant but as an observer, one of a small handful of media and bloggers admitted to the event. (Another was Sami Grover of Treehugger, who's report can be found here.)
The event was divided into two parts: a meeting of about 400 chief executives of Wal-Mart suppliers, and an exhibit hall featuring tabletop displays from roughly seventy companies and organizations, mostly consultancies (BluSkye, Domani, GreenOrder, McDounough-Braungart Design Chemistry, Natural Logic), nonprofits (Alliance to Save Energy, Business for Social Responsibility, Organic Exchange, Rocky Mountain Institute, TransFair), and some corporations that have worked successfully with Wal-Mart (BP, General Mills, 3M, Interface, S.C. Johnson). It was remarkable seeing all these entities (see the entire list here) side by side, with relatively uniform exhibit space, somewhat more egalitarian than your typical exhibition floor.
The other part was a half-day conference, including a two-hour presentation and panel discussion led by Wal-Mart CEO Lee Scott, followed by breakout sessions on "engaging your organization in sustainability," "sustainability and product innovation," "making sustainability work," and "driving business value through sustainability."
What was the point? Wal-Mart, it seems, has discovered what a growing number of companies have learned. Being a greener business isn't just about being more efficient or increasing sales. It can be an engine for innovation in products and packaging, even delivery systems. And it wants to help its tens of thousands of suppliers move in that direction.
The context, of course, is somewhat more complex. As Wal-Mart continues down the road to environmental improvement, it needs help from its suppliers to meet its ambitious goals. And in the manner that only a $348 billion retail giant can command, Wal-Mart is pressing its suppliers to improve their packaging, reduce waste, reduce toxicity, and create offerings aimed at Wal-Mart's new mantra: "Save Money, Live Better."
Wal-Mart isn't exactly asking suppliers to think and act more proactively on the environmental front. It's using its considerable clout to create almost a competitive atmosphere around "green." In coming months, for example, Wal-Mart will be judging all of its suppliers on packaging, using metrics governing the quantity and environmental friendliness of suppliers' packaging as a buying criterion. Last month, the company announced that it would measure the energy use and emissions of the entire supply chain of seven product categories, with the likely goal of using climate impact as another buying criterion. And the company has integrated sustainability in the performance evaluations of the stores' buyers and their managers, which in turn help determine their raises and promotions.
It's all rather confusing, in the sense that one must keep reminding oneself that this is, after all, Wal-Mart (and Sam's Club, the company's other U.S. chain), the company with a reputation for squeezing suppliers until it hurts in order to achieve the goals of its old mantra, "Always Low Prices." Can these same companies now become effective partners toward the goal of reducing everyone's environmental footprint while bringing to the mass market a growing number of innovative, or at least improved, green products?
Lee Scott seems to think they can. Some excerpts from his remarks to the gathering of suppliers as well as executives from his own company:
Sustainability is here to stay. It is not a fad, it is not a marketing ploy. . . . It is in fact a part of what all of us are going to be doing with our businesses from here on out. It is not about higher margins and higher prices. It is about the elimination of waste. It is about making our businesses more effective. It is about transferring those benefits on to the consumer. And it is about taking chemicals and things we know aren't good for the environment and finding alternatives to those chemicals so we make products safer.
I think for Wal-Mart one of the key roles for sustainability is it is going to cause us to have better products. Because we're going to be thinking about the quality in those products: what is the defective rate . . . what are the life-cycle costs of that product . . . . Ultimately my view is that because of sustainability, we also will be dealing with the best companies. Let me talk about sourcing from someone who is willing to compromise on the environment -- maybe destroy waste in an inappropriate way, or use chemicals that they shouldn't. What in the world would make Wal-Mart think that the person who is willing to compromise the environment, knowingly, wouldn't also be willing to compromise on quality to meet a price point? . . .
My belief is that we're going to find that sustainability and all of these social context issues are all related and all end up showing up in the quality of the products. And that as we use sustainability as a driving force, we will have better suppliers . . . and it will enhance the reputation that we have as a company.
High-minded words, to be sure. And they will likely rankle Wal-Mart's many detractors, for whom the words "Wal-Mart" and "sustainability," used together, are simply discordant. The doubters are not irrational. For years, Wal-Mart has been an aggressive, sometimes arrogant, leviathan, seemingly out of touch with progressive social and environmental ideas and ideals. In its single-minded pursuit for growth and dominance, it played rough -- with competitors, communities, suppliers, politicians, and anyone who got in its way, notably (or especially) activists. How can this sudden embrace of sustainability be anything other than a cynical ploy?
I'm pretty sure that it's not. In recent months, Wal-Mart has put itself out there in ways that few other companies have done. It is spreading the green gospel to its 1.3 million employees, teaching them how to live greener lives. It is inviting activists into its offices, and commanding suppliers to meet new, green goals, and parading its CEO in front of audiences and the press to talk the sustainability talk.
To the extent the cynics are right, it's that Wal-Mart's mission is to sell more stuff to more people in the pursuit of profitability and growth, an arguably unsustainable proposition. And that's a problem.
But along the way, the behemoth from Bentonville stands to move hundreds, perhaps thousands of suppliers toward a more sustainable path, and help to fuel consumer demand for things organic, nontoxic, and efficient, among other attributes. And, perhaps, engender everyday environmental habits among the citizenry in ways that even the most committed environmental activists have failed to do.
As Scott put it last week:
We have simply started. We make no claims of being a green company. We're not saying we're better than anyone, we're not saying we're doing it right. What we're saying is that we recognize an opportunity to make a difference in this world, make a difference for our customers, for our shareholders, for our associates, and it is worthwhile to do.
It's a messy affair, this sustainability thing. And Wal-Mart has made more than its share of the mess. But maybe, just maybe, that same company, in its dogged pursuit of productivity and profits, can create more than its share of the solution, too.
October 14, 2007 in Business Practices, Green Marketing | Permalink | Save This Page | Comments (8)
Cooler and the Quixotic Quest for Carbon-Neutral Consumption
The notion of carbon-neutral shopping looms large for many in the environmental world. If only we could shop without guilt, knowing unquestionably that the global warming impacts of our purchases were being rendered harmless, we'd all feel that we were being part of the solution to climate change.
It's a compelling and nearly rational notion.
Of course, an even better bet is to buy less stuff, and to make sure the stuff we buy is made using materials and processes that minimize harm to the environment (and, especially, to the people who make the stuff). And to use the stuff we buy for as long as we can, repairing and refurbishing it when possible, or making sure the stuff has another useful life. And to ensure that the stuff is disposed of in ways that ensure it will have nutritional value in the earth or in industrial materials cycles.
But, inevitably, we'll still end up buying more (and more) stuff. So, the quest for carbon-neutral shopping continues.
It hasn't been easy. Consumers interested in neutralizing the carbon impacts of their purchases -- by purchasing, either directly or indirectly, carbon offsets -- quickly find themselves in an informational morass. Carbon-neutral products and services have been coming fast and furious: credit cards that invest a portion of your purchases in offsets, services that allow you to offset your driving or air travel -- or just about anything else. Some of these have been roundly criticized for their methodology, resulting in geeky debates over technicalities about which even the experts don't agree.
And so, into the fray, comes Cooler, an Oakland, Calif-based start-up founded by a veteran environmental leader, in partnership with some of the largest environmental groups, using a pioneering methodology incubated at one of the nation's leading universities. It's partnering with 400 online retailers -- an impressive list, including Apple, Bloomingdales, Circuit City, Dockers, eBay, Florsheim, Godiva, and on down through the alphabet to Zales, Zappos, and Zones.
Suffice to say, it caught my eye.
Actually, Cooler first caught my eye two years ago, when its founder, Michel Gelobter, then head of the nonprofit Redefining Progress, invited me in to show me his green shopping idea. I'd heard the pitch before -- not from him, but from probably a dozen others: a means to help consumers make a difference with every purchase. At the time, Gelobter's budding company was planning a climate-neutral credit card. I was dubious about its prospects, and said so.
Fast-forward two years. The service, launched this week, has come a long way. The credit card idea has disappeared, at least for now. The service allows consumers to have all purchases made through any of its 400 online retail partners rendered carbon neutral.
As the company describes it:
Consumers who shop through ClimateCooler.com pay the same prices they would going directly to the retailer. The company uses a product-level carbon calculator that is the first global warming solution to address the impact of almost any consumer good or service sold in the U.S. Fees paid back to Cooler by the stores on its site are invested in renewable energy and pollution prevention projects approved by some of the world's best known environmental organizations.
That's half the story. The other half is a service launched by Cooler to help retailers -- online or off -- to more easily create carbon-neutral offerings for their customers, not just for a few products, but all of them.
What's makes Cooler -- well, cooler -- is that it utilizes an innovative database developed at the University of California at Berkeley. Called LEAPS (for Life-cycle Environmental Assessment of Products and Services), it provides an economic model, rather than an engineering-based one, for determining the climate footprint of a given product.
In the engineering model, companies conduct a life-cycle analysis (LCA), a costly and time-consuming methodology that examines all aspects of a product's environmental impacts, from the sourcing of its raw materials, through its manufacturing and use, to what happens to it at the end of its useful life. LCAs are comprehensive in their findings, but can take thousands of hours and many months to complete.
LEAPS -- which Gelobter calls "the country's only product and service carbon calculator" -- uses economic data, a blunter instrument yielding less-precise data, but doing so far faster and more cheaply, and with reasonable accuracy, maintains Gelobter. Analyzing the economic flows -- not just of the materials and processes that go into a product, but also including other related business activity, such as business travel or office operations -- LEAPS has created data for 1,100 product categories.
There are limits to LEAPS. Because it provides data only for product categories, not for individual products, there's no way to compare, say, Coke versus Pepsi. But it may be the best thing currently available to help consumers understand the impacts of the widest possible spectrum of their purchases.
On the offsets side, Cooler has partnered with Environmental Defense, the National Wildlife Federation, and the Natural Resources Defense Council, as well as Gold Standard, a European organization just now entering the U.S. scene, widely regarded as the international marker for high-quality carbon offsets. Gold Standard projects must meet very high criteria to ensure that they contribute to the adoption of additional sustainable energy projects, rather than simply funding existing projects. The four nonprofits monitor Cooler's offset projects to ensure a high level of integrity.
All told, Cooler is a compelling business. I've poked and prodded a bit to find the greenwash potential, the thing that critics will zero in on to show that it isn't all it's cracked up to be. I haven't found it, though I'm sure others will; they always do.
Of course, there's that whole consumption thing. Gelobter is quick to say that, "We don't want people to have any excuse for buying. We don't want to help people absolve their sins. We actually want to solve this problem." But, he adds, "People are going to continue to shop. And forty percent of Americans' carbon footprint comes from everyday consumer products and services." Cooler, he says, can mitigate much of that.
Gelobter says his principal concern is getting business on board. "Our biggest challenge is helping companies understand that getting to their carbon footprint is not all that hard. The people who have been leading the way, to their credit, have been digging deep into their operations and to where their products and supplies come from. And that's really important work. But we have to do that more quickly and in so many arenas that there actually isn't the manpower to do it all that way for the next five to ten years."
Can Cooler get companies and consumers to act, and act responsibly? That will be the acid test. And while shopping will never likely be truly carbon-neutral, Gelobter and his team are proving that it can come close.
And that's probably good enough for most of us.