Marketers are desperately trying to give every brand a green makeover, but AMITA TANDUKAR warns that being passionate about the environment is no defence against breaking the law.
By Amita Tandukar
Marketers are desperately trying to give every brand a green makeover, but being passionate about the environment is no defence against breaking the law.
The prize for companies that get the green marketing message right is an eager new consumer market, which has been dubbed “The Awakening Consumer” by specialist advertising agency Green Team Australia.
Heather Rose, Green Team’s chairman, says up to 50% of Australians will now investigate the origins of a product or service, and will pay more for a product from a sustainable source.
However in the race to capture that market, some companies have been caught out engaging in “greenwashing”, or marketing false environmental claims.
A 2007 study by North American consultancy TerraChoice found that of 1018 products reviewed, almost all products engaged in one form of greenwashing.
Hugh Wareham, chief executive of not-for-profit certification body Eco-Buy, thinks that similar results could be expected in the Australian market and marketing departments could unintentionally be putting a company’s reputation at risk. “They are unwittingly deceiving people by not doing their homework,” Wareham says.
And there is more than reputation at stake, after the Australian Competition and Consumer Commission launched a crackdown on green claims with the release of its guidelines, Green Marketing and the Trade Practices Act, in November 2007. Under the act, the maximum fine is $1.2 million for companies engaging in misleading and deceptive conduct.
The ACCC is already taking court action against car manufacturer Saab. And Woolworths has changed its packaging of Woolworths Select tissue products after an ACCC probe. An ACCC spokesman says that while large companies have been targeted so far, smaller businesses will be the subject of future investigations.
The Green Team’s Rose says a common question from clients is when is the right time to take their green message to market. She says the important thing to remember is to be transparent to staff and customers. “The early marketing message should state a commitment that comes from redefining the business. It may be a cliché, but companies need to be honest that there is a journey towards sustainability.”
She says people will forgive some inconsistencies if they see you are on a journey. For example, Starbucks now serves “fair trade” coffee, but still uses paper cups. Companies should also wait to advertise improvements until hard data is collected.
An environment strategy, and the accompanying marketing, should be tailored to each business, according to Rose. She urges business owners to conduct an audit of their own business to identify where the business has the greatest impact on the environment and where small changes can make a big difference.
For example, office-based businesses could print documents on double-sided paper, turn off all lights at the end of the business day, and encourage staff to walk or ride to work.
“If you are making claims, they must be backed up with scientific fact,” says Grant Anderson, partner at law firm Allens Arthur Robinson. He recommends companies make note of evidence that relates to each individual claim in advertising.
However Anderson says expensive audits and environmental studies do not need to be carried out to make a legitimate claim. A company could claim reductions in electricity use after completely shutting down the office at the end of a business day by showing the comparison between two electricity bills from similar periods.
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Companies should identify the exact product or process related to the environmental claim to avoid advertising puffery, says Anderson. “It really comes down to commonsense.”
Kay Jones, principal and marketing director of Sustainable Living Fabrics (SLF) says it is worth separating the green brand from the main brand. “To take just a small part of the product line and make it green is not a sustainable strategy for the environment, although it certainly helps to market the company as green,” she says.
The SLF principals bucked the trend in the fabric industry and invested 10% of turnover in a sustainability program for two years to overhaul its entire fabric range from 2005-06. Ongoing costs add about 12% to 15% to the company’s costs, but Jones says the strategy has raised market profile and increased market share.
At one stage, SLF spent money running ads combating greenwashing by rivals. But Jones soon realised the campaign was a waste of money: “Greenwashing is really fraud, but it is so prevalent that consumers just accept it.”
The ACCC warns against scientific language that is not likely to be understood by a member of the general public.
Make sure the claim explains the benefit of the product to the environment. The claim should not be irrelevant to the production process or be required by law. For example, all aerosols are now chloro fluoro carbon free by law, so “CFC-free” is an irrelevant claim.
The ACCC guidelines warn against using vague phases, such as green, safe for the environment, environmentally preferred, energy efficient and recyclable, which could mislead consumers.
Car manufacturer Saab is currently subject to Federal Court action by the ACCC over ads stating “Grrrrrreen”, “Every Saab is green” and “carbon emissions neutral across the entire Saab range”.
“It’s not just words that are getting people in trouble – it is also images like pandas, forests and dolphins,” says Anderson. He recommends companies review all packaging so there is no confusion – for example, that the image of a panda infers the production process will not harm panda habitat.
The company website is the best place to provide extra environmental information that does not fit on packaging or on advertisements, according to Rose. She says Saab failed to back up the Grrrrrreen campaign with details of its significant investment in bio-ethanol research and development in Europe.
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Submitting products and services to certification by third parties is one way to substantiate environmental claims once substantial improvements are achieved, but choosing the right third party in Australia is difficult.
Some industries have internationally recognised standards already in place. Sustainable Living Fabrics has gained a Greenhouse Friendly accreditation and the Good Environmental Choice Australia (GECA) eco-label for all its fabrics.
Jones says the GECA process is a pass/fail benchmark. It is similar to the best practice European Union standard for fabrics and gives consumers evidence to make an educated decision.
“They can go to the GECA website, look at our results and see what our fabrics have been assessed against and how they performed,” she says.
Other companies such as Demountable Office Technology (DOT) are finding it hard to choose relevant accreditation bodies.
DOT co-founder Jane Otto says the company was conceived in the late 1990s after the founders saw the waste created by companies moving offices. DOT designed reusable work station screens so companies can rearrange or move offices easily. The company also runs a buy-back scheme so screens never need to be dumped.
At the moment the company is certified with Ecospecifier, aimed at the construction industry, and Eco-Buy, which targets government and commercial procurement. But she thinks a broader, low-cost national scheme is needed to boost green purchasing. “If you are genuine, I don’t believe the company should not have to pay to be listed,” according to Otto.
Wareham from Eco-Buy says his group is considering extending the program to general consumer items, but leadership really needs to come from the Federal Government on setting standards.
The Federal Government runs the Greenhouse Friendly program. Currently it only certifies carbon neutral products and services, and carbon offset providers, which represent a small proportion of all environmental claims. However the Climate Change Department is reviewing such programs.
The ACCC is set to release additional guidelines in the coming months for claims relating to carbon offsets, representing a reduction of greenhouse gases, and carbon neutrality, where the carbon emissions of the company or a product or service are negated by offsets.
Anderson from Allens Arthur Robinson says issues include the integrity of carbon offsets and measurement of the initial carbon emissions. A common mistake, he says, is the claim of carbon neutrality for a product when the company has only considered emissions during manufacturing and not the total life cycle, which includes use and disposal.
The design and print company Mystique was forced to rethink the total life cycle of its services when it became carbon neutral in 2006. Mat Eldred, Mystique’s environmental manager, was prepared to discuss the soy-based, biodegradable inks in the printing factory in Melbourne when measuring the company’s environmental footprint, but he was surprised that the source of the paper was also questioned.
Mystique chose to become the first SME to be accredited under the rigorous Greenhouse Friendly program even though the increased cost has been added to the company’s pricing.
“Some customers will only purchase print based on price, and we do lose print jobs based on this, even if we come up against a competitor who has not made the same or any of the sound environmentally friendly choices that we have,” Eldred says.
“However, we feel that we are making the right decisions for the environment and we have put our money where our mouth is.”
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Smart Company is a sister publication to The Mandarin, catering to Australia’s entrepreneurs, small and medium business owners and business managers.
