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Behind the label

Corporations around the world are growing businesses based on sustainable initiatives, but beware of those that are simply riding the green-wave coattails.

Lara Ryan's picture
by Lara Ryan

As more and more advertisers are looking to green their brands and products, and consumers are being cautioned to beware of “green washing” (false or misleading environmental marketing claims), one might wonder how we’re supposed to distinguish the authenticity of the messages we receive.

In an effort to describe, understand, and quantify the growth of green washing, Ottawa–based TerraChoice Environmental Marketing Inc. conducted a survey of big-box stores and identified 1,018 consumer products bearing 1,753 environmental claims. The bad news: of the 1,018 products examined, all but one made claims that were either false or misleading.

 Advertising Standards Canada (ASC) is currently addressing concerns about environmental claims and offering guidance to advertisers. While complaints from consumers about advertisements they believe are making erroneous or misleading environmental claims is new to the ASC, the issue is old hat in many other countries.
 
For example, the United Kingdom’s Advertising Standards Authority is dealing with a slew of large corporate claims. One is an energy company that suggests the impact of planting trees offsets the carbon emissions produced by its customers; another is an automobile manufacturer that maintains the carbon emissions produced by its vehicles are lower than those of other vehicles.
 

My personal favourite: laundry detergents that tout being “CFC free.” I should hope they are; CFCs were banned from use in all Canadian products more than 30 years ago, so it hardly seems a legitimate advertising claim. Of course we want businesses to move toward environmental sustainability and to be good corporate citizens. In fact, more and more often we reward companies that practice sustainability with our consumer choices. As a result, they’re building their reputations on the strength of their corporate social responsibility (CSR) branding.

 Consumers want to feel good about the products and services they choose, and advertisers know that. Companies such as Toyota, General Electric, Virgin Airlines, The Body Shop, Google, Unilever, and GlaxoSmithKline (GSK) have made tremendous strides in growing their businesses based on socially responsible initiatives and the subsequent branding of those initiatives.
 

As an early adopter, Toyota gained a huge competitive advantage with its Prius hybrid vehicle and left its rivals playing catch-up for years for a share of the environmentally friendly auto market. The Body Shop has built its empire on sustainable procurement and manufacturing practices; its brand is synonymous with ethical business practices.

 Unilever’s ongoing Dove Campaign for Real Beauty has been credited with a new wave of self-esteem for women of all ages, creating a backlash at traditional advertisers who dare to airbrush their models. The Dove Self-Esteem Fund has earned the company consumer goodwill, advertising awards, and much positive press.
 
CSR bodes well with employees too. When U.S.–based Business Week magazine published a story about GSK’s record of providing HIV drugs to developing countries at cost, most of the comments posted on the magazine’s website were from GSK employees who were proud of their employer. Staff loyalty like that is hard, if not impossible to buy.
 
It’s important to distinguish between those who have created marketing campaigns and those who have integrated other CSR strategies into their operations. And the other challenge for those genuinely doing well is how to tell the story without seeming self-serving. In today’s open environment, companies are finding it necessary to take the wraps off information they once considered private or proprietary. With relentless pressure from watchdog groups, “need to know” restrictions tend to fall away. So, visibility is best met with a continuous exchange of information, or transparency.

One of those watchdog groups is The Global 100. It’s a list of the most sustainable publicly traded companies in the world, based on the research and analysis of 1,800 corporations by the Canadian publisher Corporate Knights Inc. and Innovest Strategic Value Advisors, an investment company in New York City. The companies on the list are deemed to have the best developed abilities, relative to their industry peers, to manage environmental, social, and governance risks, and to take advantage of new business opportunities in this area. Of the 2008 Global 100, only three are Canadian: The Royal Bank of Canada (RBC), Nexen Inc., and Transcanada Corp.

 All three are leaders in their sectors for integrating CSR (sustainability, community and environmental responsibility, employee heath and safety, and good governance) not only into their operations but also into their core values and strategic decisions. They have invested heavily in adapting to changing global expectations and have realized the positive return on investment for doing the right things for the right reasons. For example, RBC recently launched its RBC Blueprint for Doing Better, a new corporate-responsibility strategy and framework that features two focus areas: diversity and the environment. It was also the first Canadian bank to launch its own mutual fund for socially responsible investors and to introduce environmentally sustainable product options for retail consumers.

I’ve said before (and I’ll likely say it again ) that CSR is not a short-term fix.

It requires a significant investment of resources that sometimes makes it daunting. Of course, all small steps toward true sustainable practices should be applauded—just be careful about hanging your hat and your brand on them too soon.

 
 

 

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