Joel Makower: Two Steps Forward

Earth Day and the Polling of America 2011

It’s become a rite of spring: a bumper crop of data, surveys, polls, and analyses about the green market space. Each year, as Earth Day comes into view, a picture emerges about U.S. consumer attitudes toward green business and green shopping. It’s a murky picture at best.

As I have done for the past several years (see 2007, 2008, 2009, and 2010), I’ve waded through the latest tranche of data — nearly a score of research reports from major agencies (Gallup, Harris, Ogilvy), boutique firms (BBMG, Cone, Shelton) and some lesser-knowns (Mambo Sprouts Marketing, anyone?) — that has come out over the past several months. It’s a tedious, mind-numbing exercise, to be sure. But it’s my self-appointed duty.

Here are three conclusions I’ve harvested from the latest crop.

1. Consumers are taking a harder look at companies, but they’re not impressed. The notion of green business is starting to be eclipsed by the larger notion of sustainable or responsible business, which encompasses social and environmental issues, as well as overall ethical behavior.

As they scan the marketplace, consumers seem underwhelmed. According to the Cone Shared Responsibility Study, three-quarters of Americans assign companies a “C,” “D,” or “F” grade on how well they are engaging consumers around critical social and environmental issues. That’s unfortunate, given the steady parade of progress that we report each week on GreenBiz.com — major commitments and achievements by big companies — though little of this makes it into the mainstream media.

Sustainability seems to be growing as a concept, even though not everyone groks the term. According to the Hartman Group, 15 percent more consumers are now aware of the term “sustainability” compared to three years ago (69 percent in 2010 vs. 54 percent in 2007), though only 21 percent can identify a sustainable product and even fewer, 12 percent, can name specific companies as “sustainable.”

That’s worth repeating: About four out of five consumers can’t identify a sustainable product and nearly nine in ten can’t name a sustainable company.

All of which points up two big problems: One, “sustainability,” for all its use by companies, remains a mystery to many people. And two, companies haven’t yet figured out how to tell their stories in compelling and credible ways.

Companies’ walk-talk gap remains vast — but not in the way many consumers think. The reality is that companies are walking far more than they’re talking — that is, doing more than they’re saying.

That was evident in the Sense & Sustainability study by the public relations firm Gibbs & Soell. It found that 29 percent of executives believe that a majority of businesses are committed to “going green,” compared to only 16 percent of consumers who believe this. Closing that 13-point gap would be a good start, though it would mean that more than two-thirds of the populace still remains unconvinced.

Suffice to say, there’s a vast chasm of credibility. Citizens want to be heard by companies and want to hear what companies are doing, but they don’t necessarily trust companies on either count. According to Cone, 84 percent of Americans believe their ideas can help companies create products and services that are a win for consumers, business, and society. But only 53 percent feel companies are effectively encouraging them to speak up on corporate social and environmental practices and products. That represents a big opportunity for smart companies to differentiate themselves.

To be sure, it’s a risky proposition. Cone found a whopping 92 percent of consumer saying they want companies to tell them what they’re doing to improve their products, services and operations. But nearly as many — 87 percent — believe the communication is one-sided — that is, companies share the positive information about their efforts, but withhold the negative — and 67 percent say they are confused by the messages companies use to talk about their social and environmental commitments.

The takeaway: Companies must walk a tightrope of credibility. They need to get much better at talking about their sustainability commitments and achievements, as well as listening to customers’ ideas and concerns, all the while managing the public’s inherent skepticism about companies’ authenticity in this arena.

2. Consumers aren’t as green as they claim. Talk about a walk-talk gap: Even in a good economy, consumers profess a higher level of interest in environmental shopping and living than they actually demonstrate in their actions. For example, at the beginning of 2011, a survey by Opinion Research for the paper company Marcal revealed that 80 percent of Americans planned to be greener this year. That’s typical of consumers’ irrational exuberance of green shopping, as I’ve noted in the past.

Research by the Natural Marketing Institute, which tracks the so-called LOHAS (Lifestyles of Health and Sustainability) market space, found that four out of five of the consumer segmentations it tracks are “much more involved in the sustainability marketplace and lifestyle than they used to be,” as NMI’s Gwynne Rogers told me earlier this year. Only one segment, the “Unconcerneds,” representing 17 percent of the marketplace, are holdouts.

The high numbers from some research firms belie a continued reluctance by consumers to actually shop their talk. (But it doesn’t stop hyperbole: NMI’s research recently led one green marketing author to tout that “83 percent of consumers … are some shade of green.”)

Consider the countervailing evidence. Brand Sustainable Futures, a report by Havas Media and MPG, found that while sustainability remains a key issue for consumers worldwide, only 5 percent of U.S. consumers always consider environmental/social aspects when making purchase decisions, deterred by confusion, lack of clarity and perceived higher prices.

True, you’d expect only a small sliver of consumers to “always” shop green and responsibly. And you might get to 80 percent if you consider anyone who’s ever made at least one such purchase — a less-toxic cleaner, an energy-efficient appliance, an organic food, or a “natural” cosmetic. But there’s a vast space in the middle, which is what most of the market segmentations attempt to measure and analyze — nearly all of which I find wanting.

Research by the polling firms, as opposed to those selling market research services, seem to be more sober:

• Harris Interactive found a one-year drop in the number of Americans who say they are "going green." U.S. adults “are now less likely to engage in various green behaviors in their daily life,” says Harris, including purchasing locally grown produce, locally manufactured products, and organic products; using less water; and composting food and organic waste.

• Gallup found the widest margin in nearly 30 years in Americans prioritizing economic growth (54 percent) over environmental protection (36 percent). “Americans for the most part have given the environment higher priority since Gallup first asked this question in 1984.”

Here are two noteworthy demographic findings I came across:

• Older men are more skeptical about green marketing, according to the advertising insight firm Crowd Science. People over 55, and men in particular, are almost twice as likely to hold the opinion that shopping for green products makes no difference.

• Lesbian, gay, bisexual and/or transgender (LGBT) adults are accelerating their personal commitment to environmental issues at a higher rate than their heterosexual counterparts, found Harris Interactive. A majority (55 percent) of LGBT adults, say they "personally care a great deal about the current state and future of the environment," compared to just 33 percent of heterosexual American adults.

The takeaway: There’s still a lot of bluster on the part of consumers about their willingness to make good, green choices in the marketplace. The reality comes down to a small handful of products where consumers believe there either is sufficient value proposition (energy savings, health) or acceptable tradeoffs (higher prices, inconvenience). But don’t fall for some marketers’ everyone-is-going-green hype.

3. Consumers aren’t getting any smarter. You’d think that, after all these Earth Days, there’d be a greater consciousness among consumers, and greater confidence about the environmental choices they make. But that just doesn’t seem to be happening.

For starters, there’s climate change. Public confusion about the climate — Is it changing? Whose fault is it? What can be done? — has been well documented. A report by the Yale Project on Climate Change Communication found that 63 percent of Americans believe that global warming is happening, “but many do not understand why.” The study also found important gaps in knowledge and common misconceptions about climate change and the earth system.

It concluded that many Americans lack some of the knowledge needed for informed decision-making in a democratic society. For example, only 57 percent know that the greenhouse effect refers to gases in the atmosphere that trap heat. Meanwhile, “large majorities incorrectly think that the hole in the ozone layer and aerosol spray cans contribute to global warming, leading many to incorrectly conclude that banning aerosol spray cans or stopping rockets from punching holes in the ozone layer are viable solutions." (Ozone-destroying chlorofluorocarbons have been banned from aerosols in the U.S. for a third of a century, since 1978.)

The Shelton Group, while tracking attitudes toward energy efficiency, found several data points indicating that “more Americans than in previous years 1) think that they're doing more than they really are, 2) think that they're doing all that they can, or 3) think that they've done enough already. All three of these perceptions are troubling because they increase resistance to taking on the more substantial home improvements that truly reduce energy consumption.”

The takeaway: Companies have their work cut out for them getting consumers smarter and more motivated about environmental issues. As it stands now, some consumers are losing interest.

All in all, I like the conclusions of BBMG, which recently released a report on The New Consumer — its coinage for that portion of the U.S. adult population it describes as “values-aspirational, practical purchasers who are constantly looking to align their actions with their ideals; yet tight budgets and time constraints require them to make practical trade-offs every day.” BBMG estimates about a third of Americans fall into this category, but only one in three “strongly agrees that it’s important to purchase products with social and environmental benefits, even in a tough economy.”

Let’s see: one in three of 33 percent equals about 10 percent of the population. That seems a more realistic appraisal of who’s really committed to green shopping and lifestyles. By and large, says BBMG, the New Consumer represents U.S. demographics but skews younger, female, and educated. That, too, feels about right.

Says BBMG:

New Consumers are looking for brands that deliver “total value” — products that work well, last longer, cost less and, hopefully, do some good. They want brands that deliver the “triple value proposition” — uniting practical benefits (e.g., cost savings, durability and style), social and environmental benefits (e.g., local, fair trade and biodegradable), and tribal benefits (e.g., connecting them to a community of people who share their values and aspirations).

The jury is out as to whether a third of Americans shop with their tribal members in mind. But I’ll take it on faith that consumers are seeking something to give them meaning and fulfillment during these tough times.

Problem is, no one’s sure exactly what that is.

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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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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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Lifting the Lid on Stonyfield's New Plant-Based Packaging

Today, Stonyfield Farm, the organic yogurt company, is unveiling a new packaging solution: A yogurt cup made from corn.

It's not the first revolution in yogurt cups, or the first packaging innovation made from corn. But Stonyfield's journey to today is a case study in sustainability, innovation, persistence, and systems thinking that I think is worth sharing.

First, the basics. Stonyfield's new cup — now being used in its multipack Yo-Baby products and a few others — replaces polystyrene with a plant-based plastic called polylactic acid, or PLA. Essentially, it's a plastic made from corn.

The PLA is made by NatureWorks in Nebraska, which is owned by Cargill, then sent to Clear Lam Packaging in Illinois, where it is mixed with colorings and other additives and turned into rolls of plastic that are formed into cups at the Stonyfield Yogurt Works. The new package is 93 percent plant-based, with the balance being nontoxic colorings and additives.

The cups offer a number of advantages. Aside from the obvious — substituting plants for petroleum — PLA uses less energy and releases fewer greenhouse gas emissions than polystyrene over its lifecycle. 

PLA is made from corn, which captures carbon as it grows, so PLA releases 48 percent less carbon into the atmosphere than polystyrene does from cradle to grave. For Stonyfield's 200 million-odd cups that translates to reducing its carbon footprint by 1,875 metric tons a year. That's no small number, since packaging represents Stonyfield's second-largest carbon footprint, after cows.

Moreover, the new packaging is stronger than the oil-based plastic it replaces, and offers some other performance characteristics. For example, it reduces breakage during shipping and forms a tighter seal with the lid. The plastic is stronger than polystyrene, so less is needed, making packages lighter. (One downside: PLA's strength dulls industrial cutting blades on packaging machines more quickly.) Because of PLA's higher efficiencies and lower losses, the shift to plant-based plastics can be done at no net cost increase to Stonyfield.

So far, so good.

But it's never that simple.

While PLA can be made from a range of materials, in the U.S. it is made from corn. And 70 percent of U.S.-grown corn contains genetically modified organisms, or GMOs, according to the U.S. Department of Agriculture's Economic Research Service. That means that in using PLA, Stonyfield, a company maniacally committed to organic farming, is supporting GMOs. And therein was a dilemma.

Stonyfield is not the first company to grapple with such issues. Sustainably minded apparel and footwear companies, for example, have looked at using PLA in their products and have become stymied, fearing backlash from consumers and activists for supporting GMO crops.

Many of the objections to GM technology stem from its potential use to create unnatural organisms -- for example, a plant modified with genes from another species of plant, or even an animal. 

Another concern is that genes used to modify crops could escape into wild plants, creating "superweeds" highly resistant to pests, or alter plants in other ways that might cause damage to the environment. It is possible, this argument goes, that plants emitting their own toxins could lead to insects and other pests mutating into bigger, stronger, more resistant beasts. 

A further concern is that GM crops themselves might prove to be harmful to either wildlife or the people who eat food harvested from the crops. Still another key concern is that genes escaping from the crops could pollinate non-GM crops that are being grown organically.

Stonyfield found what it determined to be an acceptable workaround: GMO offsets.

The company worked with the Institute for Agriculture and Trade Policy and its Working Landscapes Certificate program. The goal of Working Landscapes is to reduce the environmental impact of corn and other crops grown for industrial purposes, such as plastic and ethanol production.

Working Landscapes pays farmers who agree to grow the corn we need according to very strict sustainable production standards — things like strengthening soil, protection air and water, and promoting biological diversity. Working Landscapes also ensures that non-GMO corn is used. It's seen as a win-win situation for farmers and the environment, and we hope other companies follow their lead.

This "offset" program means that the amount of corn produced using sustainable corn production practices through Working Landscapes will be equivalent to the amount used for Stonyfield's packaging needs — about 500 acres' worth in 2010 — although the sustainable corn itself may or may not actually show up in the final Stonyfield packaging.

Working Landscape meshed well with Stonyfield's longtime support for family farming.

"It's critical to us that the farmers get most of the money," Nancy Hirshberg, vice president for Natural Resources at Stonyfield, told me recently. "This is using the market to transform farming to what we believe are more sustainable practices."

She added: "We could bring over lactic acid made from non-GMO beets in Europe, or tapioca in Asia, or sugar cane in South America. But we really felt that moving American farmers to more sustainable practices was a better route to go."

Offsets are a decidedly imperfect solution, one not embraced by all environmental advocates, but Gary Hirshberg, Stonyfield's "CE-Yo" (and Nancy's brother), a longtime environmental advocate himself, saw no other viable option. "Obviously, we wish it were not corn," he told me. But, he added, "We can't afford to hang out in the black or white space — we've got to lunge into the gray here."

But there's an even greater good here that Stonyfield is pursuing: growing the market for PLA to reach a volume that makes eliminates the need for corn to make PLA. That's long been the ultimate dream of companies like Stonyfield: sourcing plastics from agricultural waste or high-yield perennial crops grown on marginal land unsuitable for food crops. According to the U.S. Department of Energy, the market for these so-called cellulosic feedstocks will be commercially viable within five years. But Stonyfield thinks it — and its competitors — can accelerate this.

Toward that goal, the company has decided to make this technology, on which it's been working for years — open-source, available to its competitors.

"We had the opportunity for exclusivity on this, and it was not an option that we thought was ethical," said Nancy Hirshberg. "So, we're putting all of our studies on the Internet. We're welcoming other companies to come in to see how it runs. We'll be out speaking to others. We're really encouraging others to do this."

Said Gary: "The big win, as I've come to understand this, is that the only thing that the only impediment to getting to agricultural waste or algal waste PLA is volume. Every chemist I know on both sides of the Atlantic says it's only one thing that makes it five years instead of one year, that's volume. It's simple."

"That's why we're being really open-sourced about this," he added. "If Yoplait wants to do this, we're going to be thoroughly open-book."

It's a book whose final chapters have yet to be written, but the story line is promising: a forward-thinking company combining technical expertise, market savvy, and sustainability commitment to transform an industry, and maybe other industries, by breaking through barriers and taking a risk.

We need many more such stories.

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What the New Green Marketing Guidelines Really Mean

At long last — after 35 months, three public hearings, hundreds of public comments, two presidential administrations, and 17,536 utterings of the phrase, "It isn't easy being green" — they've arrived: The U.S. Federal Trade Commission's proposed "Green Guides," the federal government's definitive guides to green marketing.

The document, released today (a summary can be downloaded here - PDF), is an update to the original "Green Guides," published in 1992, then updated in 1996 and 1998. A lot has happened since then, marketing-wise: claims related to carbon-neutral and other greenhouse gas emissions; biobased materials, including packaging and textiles from bamboo and other plant matter; renewable energy; and the introduction of hundreds of eco-logos and certifications, some highly authoritative and credible, others decidedly less so.

The FTC is seeking public comments on the proposed changes until December 10, 2010, "after which it will decide which changes to make final."

The updating of these guides for the first time in 12 years has been greatly anticipated, seen as a watershed event, one aimed at curbing what some see as a veritable tsunami of greenwashing. (I'm not one of those. See my thoughts on greenwashing here and here.) Nonetheless, “We’ve seen an explosion of green claims,” as FTC Chairman Jon Leibowitz put it in today’s press conference.

In brief: The guides are a common-sense set of rules about what claims a company can and can't make, and what kind of substantiation and disclaimers are required for specific types of marketing messages. The original guides were intended to prohibit or clarify vague claims ("all-natural," "non-toxic," "safe for the environment") and curb the use of claims that, while technically true, were generally misleading — a "recyclable" product or package that hardly anyone could actually recycle, for example.

Some of this has been clarified or more fully defined in the new version. It also adds guidance on three new claims: “made with renewable materials,” “made with renewable energy” and “carbon offsets.”

Like their predecessors, the proposed updated guides represent a low bar, intended to eliminate outright misrepresentation and fabrications. Their updating do not herald a new era of green marketing. Despite some near-hysterical predictions, they aren't likely to "radically reshape how far marketers can go in painting their products, packaging or even corporate images green," as Advertising Age recently speculated.

For green marketers, it is not the end of the world as we know it. They won't likely change the landscape much, and most definitely won't eliminate critics' charges of "greenwashing."

It still isn't easy being -- well, you know.

The new guidelines, while in great need of a freshening up, don't really keep up with the world of sustainable business practices. I had a brief window into this in early 2008, a few months after the FTC first announced that it would update the guidelines. I was invited by the commission to meet in DC. At the time, the commission staff was focusing on packaging, in preparation for a workshop to be held in late April of that year.

In our meeting, FTC staffers described their focus on packaging — how they wanted to update the guidelines to reflect developments since 1998 — things like bio-based packaging, which wasn't addressed in the guidelines, compostable packaging, plant-based plastics, and other newfangled materials.

At one point I asked: "How do you plan to address claims about reduced packaging — or eliminating packaging altogether?" (And where would you put such claims if there's no packaging!)

The FTC folks hadn't considered this — and the proposed guidelines issued today don't mention it.

That brings up another shortcoming of today's guidelines. They don't address some of the more potent claims a company can make about its product or packaging. Cradle to Cradle, a standard that certifies products whose ingredients can be recycled back into nature or industrial processes — it's not mentioned. Biomimicry — products inspired by nature that use less energy and whose designs or materials mimic plants, bugs, sea life, and other critters — you won't find guidance for that. Green chemistry — the next-gen substitutes for some of the world's most toxic chemicals? It's nowhere to be found.

There's no guidance on the word "sustainable" or "sustainably." Or "green."

And so it goes. The FTC guidelines address only a tiny fraction of what companies are doing — the overt, relatively minor improvements companies make to their products and processes.

That's to be expected. The FTC was created to give consumers a voice in the marketplace. It's principal mission is consumer protection. And so the guidelines reflect only what companies choose to share with consumers.

But that's far from everything. There are 1,001 other things — the behind-the-scenes innovations that variously, and sometimes significantly, reduce water, energy, and materials intensity of so many of the everyday products we buy, sometimes far disproportionately to the relatively minor enhancements claimed by green marketers. The FTC offers no map for that.

Some activists and consumer advocates will no doubt be celebrating the new guidelines, while others will be bemoaning its low-common-denominator perspective. That's all fine. Both parties are right. It's not likely to alter the lives of green consumers much.

The "Green Guides" are finally out. Now, let's get on with our lives.

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Behind Procter & Gamble's Sustainability Vision

Procter & Gamble's announcement today of a new "sustainability vision" is a noteworthy moment — not just for the world's largest consumer packaged goods company, but for the world of sustainable business.

It represents another yardstick of how major corporate players view their place on the sustainability landscape: being "socially responsible," of course, but also seizing the global business opportunities that can inure to companies taking leadership roles in environmental and social well-being.

P&G's CEO Bob McDonald and VP of Global Sustainability Len Sauers announced the goals today on a webcast that I had the honor of hosting. (My participation was part of a business relationship between P&G and GreenBiz.com, though neither I nor any of my GreenBiz colleagues played any role in the substance of the announcement.)

"We don't treat environmental sustainability as something separate from our base business," said McDonald, who also holds the title of Executive Sponsor of Sustainability at P&G, a rarity among CEOs. "When we operate sustainably, we earn gratitude, admiration and trust that lead to opportunity, partnerships and growth." He explained that among P&G's goals is to reach five billion consumers over the next five years. "This is roughly a billion more consumers than we're reaching today. But, we must reach and serve these consumers responsibly. It does us no good to grow our business today at the expense of tomorrow."

At first glance, P&G's four new commitments — powering its plants with 100% renewable energy, using 100% renewable or recycled materials for all products and packaging, having zero consumer and manufacturing waste go to landfills, and designing products "that delight consumers while maximizing the conservation of resources" — closely resemble the three broad environmental goals set by Walmart in 2005 ("to be supplied 100 percent by renewable energy; to create zero waste; and to sell products that sustain people and the environment.")

But there are big differences. For starters, unlike Walmart's goals, which have no specific timeline, Procter & Gamble — which makes everything from Pampers to Pringles to Pepto-Bismol to Prilosec — seems to have mapped out milestones. Today it announced several, including committing by 2020 to replace 25 percent of petroleum-based materials with "sustainably sourced renewable materials," reduce consumer packaging by 20 percent, reduce manufacturing waste to less than one-half of 1 percent, use 30 percent renewable power for its manufacturing plants, and reduce truck transportation 20 percent. The company says it will report progress on these goals annually.

It's also significant that unlike Walmart's unveiling of its goals in 2005 (or GE's ecomagination announcement that same year), P&G's announcement wasn't a bolt from the blue — that is, an audacious goal from a company that had previously been largely silent on sustainability issues. Today's announcement seems the logical extension of a series of steps the company has been taking. For example, in just the past six months, P&G:

• introduced to the U.S. its Future Friendly campaign, born in Europe, a multi-brand and multi-platform effort to raise awareness about greener products and greener practices;

• created a high-profile panel of sustainability experts to advise on its Future Friendly efforts;

• launched a scorecard to measure the environmental impacts of hundreds of suppliers;

• reformulated a bestselling shampoo to reduce toxins;

• announced concentrated versions of powder laundry detergents that significantly reduce packaging and energy use; and

• introduced sugarcane packaging to three of its shampoo and makeup brands.

All of which follow the company's 2009 commitment to sell $50 billion in "sustainability driven" products by 2012, a goal that the company says it is on target to meet.

Just last week, at the Clinton Global Initiative, P&G launched a Children's Safe Drinking Water program with the intent "to provide enough clean water to save a life every hour." It plans to do this by delivering more than 2 billion liters of clean drinking water a year by 2020, which it says will help save an estimated 10,000 lives and preventing 80 million days of diarrheal illness annually. Clearly, this is not window dressing.

Indeed, it's that link between the developing world and the developed that is becoming a key source of business value and growth for the company. As P&G aims to ramp up its customer base by a cool billion people, it is turning to its culture of innovation to create products that benefit those not just at the base of the pyramid, but also the rest of us.

Consider something called Downy Single Rinse. "Normally, in the developing world a woman would need maybe four buckets of water in order to wash her clothes -one for washing and then several rinses," Len Sauers explained to me recently. "Through technology that we've put in Downy Single Rinse, she only needs to do one rinse, not three." The result: saving water, perhaps enough to pay for P&G's product in the first place. In fact, its marketing pitch for the product included "Downy for free!" The company used a similar approach with its Tide Coldwater (and, in Europe, Ariel Cool Clean), which claims to save consumers enough in their hot water bills to pay for the detergent.

This isn't just clever marketing, it's a solid green value proposition — a money-saving product that has an environmental benefit. We simply haven't seen enough of those.

"I have a firm belief that all issues of sustainability will be solved by innovation, says Sauers. "And at P&G, one of our core strengths is innovation, so as we go down this path to tackle these issues that the world is facing, I believe it'll be our innovative solutions that are very helpful there. I see this as business opportunity for the company."

(Sauers will be discussing the company's approach to product creation as one of the featured speakers at our upcoming GreenBiz Innovation Forum.)

It's encouraging to see a big company that understands that success in sustainability comes from actually improving lives, not simply selling people more stuff.

Of course, P&G's business is decidedly about "stuff." And not all of it is universally beloved. For example, reasonable voices will disagree on whether introducing disposable diapers in emerging economies like China promotes hygiene (and, according to one study, extends babies' sleep an extra 30 minutes per night) or promotes wastefulness in a world of limited resources. Business case studies are built of such debates.

And so time will tell whether and how much P&G's self-described "purpose-inspired growth strategy" — of "touching and improving more consumers' lives in more parts of the world... more completely" — actually changes lives. But it's pretty clear that the company is going to try.

Either way, P&G's "sustainability vision" represents the culmination of a major turnaround. It doesn't seem that long ago that P&G wasn't held in high regard in sustainability circles. Suddenly, it seems like the newest corporate good guy.

I asked Sauers, who's been with the company for nearly 24 years, how he sensed the shift. "I think it's a wonderful and exciting time for the company because I really do believe we can make a meaningful difference in environmental sustainability," he responded. "We have so many smart people in our R&D organization who I know are going to come up with these great innovations that enable consumers to be sustainable. I have the good fortune of having a full commitment from our CEO, which enables things to happen so much more easily within the company."

Sauers concluded: "It's just a great time to be in the company. It's going to be very interesting over the next few years here at P&G."

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ULE 880 — The World Weighs In

We've just reached the halfway point in the public comment period for ULE 880 - Sustainability for Manufacturing Organizations — the company-level sustainability standard my colleagues and I helped develop — so it's a good time to take stock.

First, some background. Three weeks ago, GreenBiz.com and UL Environment (ULE), part of the venerable standards organization Underwriters Laboratories, publicly released a draft of the above-named standard, which rates large and midsized manufacturers across more than 100 indicators covering environment, workforce, community, governance, and supply chain. ULE 880 is intended for use by companies, public agencies, and institutional buyers to assess themselves and their suppliers and trading partners.

As I've previously written, this is a project on which a small group of us have been toiling for as long as eight years. When we joined forces with UL Environment last year, it elevated the project to a new level, leveraging UL's long history of credibility and integrity. UL is a household brand that's historically been synonymous with "safety," its logo appearing on 20 billion products a year. In 2009, it entered the sustainability realm with the creation of UL Environment.

July 29, when the standard was released, was a rather anxious moment for the ULE-GreenBiz team. For the first time, this standard — the first-ever comprehensive company-level sustainability standard from an independent, global certification agency — would be available for review and detailed comment. Friends, colleagues, and outright strangers could have at it.

The commenting process, as previously described, takes place online (via a ULE Web-based tool), is open to everyone (you must register in order to receive access to the commenting tool), and is transparent (all comments and their authors are publicly viewable).

So, as we reach the halfway mark on the 45-day comment period, how's it going?

To date, nearly 600 individuals have registered to comment — the largest public stakeholder response Underwriters Laboratories has had on any standard in its 116-year history. The registrants have come from 25 countries and six continents. (Apparently, no one in Antarctica is interested.) They represent a diverse range of organizations, including large companies (about 20% of the Fortune 500), smaller firms, national and subnational government agencies from around the world, nongovernmental organizations, academics, trade associations, and others.

All in all, a terrific turnout.

"It's generated a huge amounts of interest," says Craig Coulter, one of the project leads at UL Environment. "There's a great demand both for the content of what we're trying establish in the sustainability realm, and the excitement around UL's involvement in this space."

Of course, the record-breaking registration figures don't reflect the actual number of comments received. That is far smaller but is expected to grow as the September 14 deadline approaches.

I talked with two of the early commenters to get their feedback — not necessarily about the standard, but about the commenting process.

"To be frank, it was a tad bit onerous because the standard is very detailed," said Sarah Brooks, Senior Advisor and Acting Senior Manager, Sustainable Business, at The Natural Step Canada. "That's, of course, to the benefit of the standard, but it puts the onus on the reviewer to be focused and to stay with it. I did it over two days."

Brooks' diligence paid off. She left a number of very insightful comments throughout the document.

"I think the standard is very ambitious," she told me. "I think it's something that will be both challenging and inspiring to those organizations that are ready. For those that aren't ready, it may be a little bit frightening for them but also perhaps a very necessary kick in the pants."

For the record, the standard will have three levels of certification: an entry level, a mid level, and a high level. The highest level, which might be likened to the "Platinum" level of the LEED green building standard, will be extremely hard to attain, while the entry level should be accessible to companies that have a solid sustainability framework in place and are proactively implementing it.

Bruce Klafter, Managing Director, EHS, and Head, Corporate Responsibility & Sustainability, at Applied Materials, Inc., had a positive experience with the online tool. "Mechanically, it was very easy," he told me. "The [tool] was set up very well. It took me just one or two tries before I figured it out."

Klafter appreciated that he was able to see everyone else's comments. "You could quickly pick up the flavor of where they were coming from and what sorts of issues they had. That was very useful."

Both Brooks and Klafter commented on the size of the standard — more than 60 pages when printed out — and the challenge that presented in providing detailed comments. "It's a very extensive document," said Klafter. "I first printed out portions, marking them up, then going back into the tool. I think you could easily get fatigued trying to march through the entire thing. So, I concentrated on sections that were of greatest interest to me."

I asked Klafter what he'd advise those who haven't yet dived in — or weighed in — on ULE 880. "I think you ought to read it through as carefully as you can before you jump in and start commenting on particular sections," he counseled. "The initial sections describing the intent and definitions and all the sections together give you a better understanding of where particular sections are going, and if you looked at just a few sections in isolation you might not get that."

Thanks to both Brooks and Klafter for being pioneers (and for their frank feedback). We'll be looking forward to more comments and feedback on the standard — and the commenting process — in the coming weeks. As I said, the comment period ends September 14.

What happens after that? Lots! Starting September 15, the ULE and GreenBiz teams will review the comments and make changes, then issue a revised draft. In mid November, we'll convene a Stakeholder Advisory Panel, at which a couple dozen or so individuals will hold a facilitated discussion about the more complex issues that arose from reviewers' comments. A final draft will follow.

Meanwhile, we're already holding conversations with major accounting and environmental auditing firms about providing verification services for ULE 880, and with major companies about piloting the standard and certification. We're talking with both companies and public agencies about serving as demand drivers — that is, integrating ULE 880 into their procurement and supply-chain management processes.

But for now, it's all about hearing from a rich diversity of voices. I strongly encourage you to weigh in on the standard by registering to comment. I promise an educational and enlightening experience — one that will give you deeper insight into the many facets of what it means in 2010 to be a sustainable business.

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