Green Product Purchasers Beware

Sept. 1, 2007

By Scot Case

Greenwashing is still prevalent and savvy purchasers should know how to spot environmental claims that are meaningless. 

The growing demand for more environmentally preferable goods and services has led many manufacturers to find cost-effective ways of improving their environmental performance and the environmental performance of their offerings. As a result, safer products of every kind are available.

Unfortunately, not all manufacturers have made the investments necessary to provide more environmentally preferable products. In order to compete in a market that demands "green" products, some manufacturers have resorted to creative advertising instead.

The practice of inflating a company's (or its product's) environmental benefits is known as "greenwashing." The practice appears to be growing, and purchasers are learning that they must carefully examine all environmental claims to ensure the environmental benefits they seek are reflected in the products and services they buy.

HISTORY OF GREENWASHINGIn the late 1980s and early 1990s when professional purchasers and individual consumers first became interested in buying green products, the following kinds of claims began appearing on products:
  • Essentially non-toxic
  • Earth-friendly
  • Eco-safe
  • 100 percent natural
  • Environmentally safer
  • Made with non-toxic ingredients
  • Earth smart
  • Ozone safe

Manufacturers were using the terms indiscriminately and without any attempt to clarify their meaning. Purchasers were rightly confused about the meaning of the claims.

Following numerous consumer complaints, the U.S. Federal Trade Commission (FTC), which enforces a wide variety of consumer protection laws, began investigating what the FTC Chair at the time referred to as "advertising pollution."

As part of its investigation, the FTC identified a variety of deceptive advertising practices, including manufacturers making unsubstantiated environmental claims and misleading consumers about the environmental benefits of their products. Following its investigation, the FTC issued its Guides for the Use of Environmental Marketing Claims in 1992 outlining acceptable and unacceptable environmental marketing practices. The guidelines were revised and updated in 1998.

FTC guidelines require manufacturers to provide specific details explaining any environmental claim without overstating an environmental attribute or benefit. According to the guidelines, generic claims of "environmental preferability," "environmentally friendly," or "Earth smart" are to be avoided because they do not provide purchasers with any specific information that can be used to compare products. Such claims are unacceptable without an accompanying explanation detailing the specific environmental requirements necessary to justify the claim.

THE NEW FACE OF GREENWASHINGWhile greenwashing decreased following the release of the FTC guidelines, it did not completely disappear. In fact, as demand for more environmentally preferable products rises, greenwashing appears to be reemerging as an important concern for purchasers and other supply chain professionals. A forthcoming study of modern greenwashing practices identifies the following six greenwashing "sins":SIN OF FIBBING - While rare, some manufacturers do mislead customers about the actual environmental performance of their products. Some manufacturers have claimed that their products meet the environmental standards developed by EcoLogo or Green Seal when it is clear they do not. The EcoLogo program even has a fraud advisory section on its Web site warning purchasers about misuses of the EcoLogo certification mark. SIN OF UNSUBSTANTIATED CLAIMS - Also known as the sin of "just trust us," some manufacturers are unable to provide proof of their environmental claims. Others use words like "green" or "eco" in their corporate or product names and hope no one asks for details. All environmental claims should be verified by an independent certifying body or auditor, or the manufacturer should be willing and able to provide the necessary documentation to prove a claim when it is requested. Purchasers should be able to easily verify the recycled content of a product or to learn whether it contains any ingredients of concern.SIN OF IRRELEVANCE - Some manufacturers make factually correct environmental assessments that are no longer relevant for the particular product category. As an example, many aerosol products continue to make "CFC-free" claims even though CFCs have been banned in these products since 1978. These accurate but irrelevant environmental claims can confuse even savvy purchasing professionals.SIN OF THE HIDDEN TRADE-OFF - Many products make bold claims about a single environmental attribute, which can lead purchasers to mistakenly believe that it is the only environmental attribute of concern for a particular product category. A cleaning product manufacturer, for example, is currently displaying an environmental certification mark documenting that its cleaning products are manufactured in a facility powered by renewable energy, which is clearly a beneficial environmental feature. The product makes no claims, however, about the potential human health or environmental hazards of the product itself. Purchasers could easily be misled by the certification mark to believe that the product is safer or uses safer ingredients than its competitors when that may not be true. Review products with single attribute claims carefully.SIN OF VAGUENESS - Broad, poorly defined environmental claims continue to challenge purchasers seeking high-quality environmentally preferable products. A vague claim such as "100 percent natural," for example, can be very misleading because some naturally occurring substances such as arsenic and dioxin can be very harmful to human health. Legitimate environmental claims are not vague.SIN OF RELATIVISM - A product can be the most environmentally preferable product in its class, but still be an appropriate choice. The most fuel-efficient sport utility vehicle (SUV), for example, is still less preferable if a mid-sized passenger car will suffice.AVOIDING THE PERILS OF GREENWASHINGThe big challenge for professional purchasers and other supply chain management professionals is determining which environmental claims are meaningful and relevant, and which ones should be avoided.

The most powerful tool in the professional purchasers' arsenal is the power to ask good questions. When presented with an environmental claim about a product or service, the following questions can be useful for determining the
accuracy and relevancy of the claim:

  • What type of environmental claim is  being made?
    Is the manufacturer making a claim about a single environmental attribute, such as energy efficiency or recycled content, or is the manufacturer making a broader claim that the product meets an environmental leadership standard? While incredibly valuable, single-attribute environmental claims do not address other potentially important human health and environmental issues.

    Environmental leadership standards such as EcoLogo and Green Seal examine all of the environmental impacts of a product category along with the products currently available in the market when developing a standard. Leadership standards generally are designed so that only the top 20 percent of products in a category can meet them. This allows sufficient competition within the leadership category to help keep prices competitive while still being protective of human health and the environment.

  • Is a copy of the environmental standard or   testing protocol available for review?
    If a manufacturer can not provide a copy of the environmental standard or testing protocol, one might suspect that the claim is only a marketing ploy. When manufacturers do provide a copy of the standard, review it carefully to determine if it references appropriate national or international environmental and performance standards.

    Standard and testing protocols should have a clear and consistent meaning. They should be meaningful and verifiable. Good standards and protocols are designed so that anyone unaffiliated with the standard should be able to read it, interpret it, and know how to evaluate products against it. They should also be designed to ensure consistent evaluation results, meaning that different reviewers would likely reach the same conclusion about whether a product meets the standard or not.

  • How was the environmental standard or testing protocol developed?
    It is preferable that standards and testing protocols be developed in an open, public, transparent process similar to the way ANSI, ASTM, or other public standards are developed. The standard setting organization should make records of the standard development process available for review.

    In addition, multi-attribute environmental leadership standards should be based on human health and environmental considerations throughout the life-cycle of the product from raw material extraction, manufacture, use, and ultimate disposal of the product. The life-cycle stages considered and covered by the standard should be explicitly stated.

  • Who developed the environmental  standard or testing protocol?
    The most trusted standards are those developed in a consensus-based process by broad stakeholder groups. Purchasers tend to be less trustful of standards developed by an individual manufacturer or trade association fearing potential conflicts of interest.

  • What process is used to verify that products actually meet the standard or passed the testing requirements?
    There are a variety of procedures to verify that a product meets a standard. Some are more rigorous (and can be more expensive for the manufacturer), but provide a greater degree of assurance. They include:SELF CERTIFICATION - Individual companies certify that their products meet the environ-mental standard.SELF CERTIFICATION WITH RANDOM AUDITS - Individual companies certify their products, but the standard setting organization conducts random audits to ensure compliance.INDEPENDENT THIRD-PARTY CERTIFICATION - An independent organization verifies that the products meet the standard based on information provided by the manufacturer.INDEPENDENT THIRD-PARTY CERTIFICATION WITH ON-SITE AUDITS - An independent organization verifies that the products meet the standards based on information provided by the manufacturer and after an on-site visit to verify the accuracy of the information provided by the manufacturer.

    It is important to note that a stringent verification process is relatively meaningless if the standard itself is not meaningful.

    Given the growing uncertainty associated with the rising number of environmental claims, purchasing professionals are increasingly relying on a few well-respected environmental standards. Based on a review of recent contracts, Energy Star is the most frequently cited single attribute program. EcoLogo and Green Seal are the most frequently cited multiple-attribute programs.

    Some of the most frequently cited environmental programs include: Chlorine Free Products Association; EcoLogo; Energy Star Program; EPEAT; Forest Stewardship Council; Green-e; GREENGUARD; and Green Seal.

    By relying on legitimate environmental standards and certification organizations, and asking appropriate questions, professional purchasers can ensure they are buying the highest quality green goods.

    Scot Case has been researching and promoting responsible purchasing issues for 14 years. He has consulted with the world's largest purchasers and the world's largest companies. He is currently vice president of TerraChoice Environmental Marketing, which manages the EcoLogo program. He can be reached via e-mail at [email protected].

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