Shoppers are seeking out greener products, energized by the prospects of healthier alternatives, higher quality, preserving the environment and saving time and money. But the "greenwash" phenomenon threatens the green-marketing revolution.
The potential to confuse consumers with misleading green claims is high. Green issues are highly technical, complex and fast moving. When claims are unclear, marketers can be labeled as greenwashers and their marketing as greenwash.
Being perceived as a greenwasher seriously can damage a company's credibility. Unfair or deceptive advertising can expose marketers to legal risks and accompanying expense. The impact of greenwash can hit the bottom line if disillusioned customers shift their purchases to more trustworthy competitors.
Paying close heed to the FTC Green Guides is one significant way to underscore credibility and avoid greenwash. Other strategies reflect the larger context in which green marketing occurs. The following five strategies give businesses steps to win their stakeholders' trust.
1. Walk your talk
A company perceived as committed to sustainability and sound environmental policies gains the good graces of consumers. Companies in the vanguard of corporate greening have many of the following attributes in place:
• A visibly committed CEO. Only a chief executive with a clear vision can make environmental soundness a corporate priority and forge an emotional link between a company and its customers. CEOs at corporate-sustainability pioneers Patagonia (Yvon Chouinard), Stonyfield (Gary Hirshberg), Timberland (Jeff Swartz) and Tom's of Maine (Tom and Kate Chappell) maintain high profiles. Projecting a personal commitment to the environment, CEOs win their stakeholders' trust.
• Empower employees. Bring employees up to speed about climate change, clean technology and green consumer behavior. Identify ways to get involved.
• Be proactive. It projects leadership and sends a message to investors that risks are minimized. Regulators are less likely to impose restrictions on companies whose actions transcend minimum standards. Proactive companies can help define those standards, and discover opportunities for cost-effective eco-solutions.
In 2005, HSBC became the first major bank to address climate change by becoming carbon neutral. By instigating an industry-leading carbon-management plan, HSBC gained the credibility to launch its Effie Award-winning "There's No Small Change" U.S. retail marketing program in spring 2007.
• Communicate your values. Many sustainability leaders, including Patagonia ("Don't Buy This Jacket"), Stonyfield and Tom's of Maine, communicate core values to establish emotional connections. Also called "purpose marketing" or "pro-social marketing," values-based marketing avoids hard-sell ads in favor of soft-sell campaigns.
• Green your marketing practices. Paper with recycled and/or sustainably harvested content and printed with soy-based inks reduces environmental impacts, as does the use of electronic media to replace printed marketing. But media is the fifth-largest industry in the U.S., and with its growth comes attention to the environmental impacts of server farms, networks, computers and mobile devices.
Some brands work with organizations such as the Institute of Sustainable Communication's Strategic Advertising Partnership to explore ways to develop lifecycle-analysis product-category rules that would enable standardized reporting and verification of environmental impacts.
2. Be transparent
Provide access to the details of products and corporate practices and actively report on progress.
Respected nonprofit Global Reporting Initiative works with the United Nations Environment Programme, the ISO and other global groups. Its voluntary global standard and framework measures and reports on economic, environmental and social performance. More than 1,500 companies, including Coca-Cola, GM, IBM, Novartis, Philips and Unilever, have adopted this reporting standard.
• Get radical. Sustainability pathfinders such as Patagonia with its "Footprint Chronicles" are reporting with "radical transparency." Get a jump on competitors and regulators — and score points with consumers — by disclosing as much as possible.
• Don't hide bad news. Consumers get angry when they suspect that companies have hidden information.
Sigg, makers of eco-trendy aluminum bottles, learned this lesson the hard way. Thought to be BPA-free, Sigg's bottles came under fire when an open letter to customers from CEO Steve Wasik disclosed that bottles produced before August 2008 contained trace amounts of BPA — and that the company had known about it since 2006.
3. Enlist the support of third parties
Popular and credible forms of third-party support include eco-labels, environmental product declarations and cause marketing.
• Eco-labels. A handful of eco-labels — the chasing-arrows recycling logo (93 percent), Energy Star (93 percent) and USDA's Certified Organic (75 percent) among them — have gained purchase influence.
If no eco-label exists in your industry, you can help develop one. Commercial furniture manufacturers did this under the guidance of industry trade organization Business and Institutional Furniture Manufacturers Alliance, developing the BIFMA e3 standard and level certification in line with American National Standards Institute standards-development protocols.
Create demand with marketing consistent with eco-label guidelines. Energy Star enjoys strong awareness thanks largely to the promotional efforts of manufacturers of labeled products, public service advertising and retailer efforts.
• Environmental product declarations. EPDs provide detailed, third-party-verified explanations of a product's life-cycle impacts. Steelcase issued an excellent one for its Think office chair per ISO 14025. The EPD shares the results of three separate life-cycle assessments to assess impacts in North America, Europe and Asia, and describes the certifications from different countries.
• Endorsements and awards. Credible third parties can halo brand imagery. When launching the Prius, Toyota touted the fact that the Sierra Club, the National Wildlife Federation and the United Nations each had bestowed some type of award or endorsement on the car.
But Sierra Club and Clorox learned a hard lesson when what was perceived as a paid endorsement of Clorox's Green Works incited widespread criticism. Negative press ensued and sparked a change in leadership at the Sierra Club.
• Cause marketing and beyond. Best known as promotional efforts in which a business donates a portion of product revenue to a relevant nonprofit, cause-related marketing can distinguish brands in a cluttered marketplace.
Procter & Gamble's Dawn dishwashing liquid leads one high-profile brand-specific campaign. The brand donates $1 to the Marine Mammal Center and the International Bird Rescue Research Center for every specially marked package bought. This cause-related marketing campaign capitalizes upon Dawn's role in cleaning oil-despoiled waterfowl.
Cause marketing is not without risk. In response to consumer outrage over unethical cause-related marketing and false claims of philanthropic support, New York's attorney general in 2012 issued transparency guidelines stating that companies should clearly and prominently disclose key information, including the amount donated to charity from each purchase. Companies using ribbons and similar symbols also must make clear if a purchase triggers a donation or if the symbols are merely for awareness of a cause.
Several brands support environmental causes in creative ways. Levi's "Water<Less" products reduce water use, and brands such as Patagonia, North Face and H&M engage consumers in reuse and recycling. Eileen Fisher opened Green Eileen stores that sell gently used company-brand clothing and donate proceeds to innovative programming for women and girls. These practices ensure that environmental efforts are authentic, aligned with business goals and in step with consumers' desires to do good via their shopping.
4. Promote responsible consumption throughout the life cycle
It's one thing to design greener products, but minimizing their life-cycle impact requires responsible use and disposal. Consider that more than 90 percent of the energy associated with laundry detergent takes place in the use stage, when water is heated.
Nearly all consumers (90 percent) agree that it's their responsibility to properly use and dispose of products, and 85 percent acknowledge the corporate role in providing such information, according to Cone Communications.
Start at a product's label, because 45 percent of consumers report looking there for information about a product's environmental claims, according to Cone's survey.
Some companies attempt to design responsible consumption into their products, such as the dashboard device in Toyota's Prius that gives real-time information on fuel efficiency, and Tide Coldwater laundry detergent.
5. Focus on primary benefits
As discussed in Ottman and colleagues' article "Avoiding Green Marketing Myopia," the surest route to avoiding a greenwasher label may be to avoid using green claims altogether. Eco-aware or not, consumers want to know how products can benefit them personally.
Focusing on primary benefits in a story that incorporates environmental responsibility as a desirable extra is preferred. Does your product save consumers money? Ads for Sears' Kenmore HE5t Steam washer, which uses 77 percent less water and 81 percent less energy than older models, grabs readers with a promise: "You pay for the washer. It pays for the dryer."
Does your product appeal to the style-conscious? American Apparel provides excellent working conditions and uses organic cotton. But in 2004, when "sweatshop free" didn't score big, CEO Dov Charney switched to promoting a sexy, youthful company image. Three years later, the company had 180 stores and revenue estimated at $380 million. That same responsible clothing is sold with all the same benefits to society and the environment.
Embracing the FTC Green Guides
Understanding the FTC Green Guides and learning from examples helps reduce the risk of legal trouble for false or misleading advertising. But there's more to marketing than staying out of trouble. Combined with a smart, forward-thinking approach, the Green Guides can be a useful tool for building credibility — the key to effective and responsible green marketing.