Sustainability | March 2010 | By Robin Van Tan

How Going Green Can Hurt Your Business

One unforeseen result of the sustainability movement is the growing consumer backlash against greenwashing. Is your brand guilty?

“Natural.” It sounds like a good choice, but what does it really mean? What about the words “recyclable” or “chemical free”? What do they say about the products that bear them on their labels? As it turns out, not a whole lot. “Natural” is vague at best, “recyclable” refers to anything that could be reused in some way (the possibilities are endless), and most items that claim to be “chemical free,” in fact, contain chemicals—just nontoxic ones. Quick-serve operators can’t really be sure of what is what without doing research that goes well beyond reading the product descriptions suppliers provide.

Welcome to the confusing and even more frustrating world of greenwashing—one of the biggest reasons it’s not easy being green.

The Green Sweep

As consumers have become more concerned with going green, companies have taken advantage of the opportunity to make more green.

“There’s been a clear spike [in advertisements that make environmental claims] from 2007 through 2008, and we know that spike has continued through 2009,” says Scot Case, vice president of TerraChoice, a North American environmental marketing agency. “When you look at the number of ads that reference environmental initiatives, clearly it’s something advertisers see as important.”

But as environmental marketing increases, so do instances of greenwashing.

“Greenwashing is a way of hiding the truth or masking the truth in some way about the environmental attributes or sustainability of a product,” says Joe Pounder, director of product innovation at Georgia-Pacific Professional Food Services Solutions.

Anything that leaves consumers with an incorrect or misinformed impression of a product—even if the claim that causes the confusion is technically accurate—qualifies.

“Often, greenwashing can take a very general statement that to the average consumer sounds great, but with further investigation you find out there’s nothing under the actual fluff,” says Michael Oshman, executive director of the Green Restaurant Association (GRA).

Take, for example, biodegradable cups. While they might biodegrade under specific circumstances and given enough time, landfills often don’t provide those circumstances—so the “biodegradable” cups that end up there will never break down.

In a 2009 report by TerraChoice, more than 98 percent of the 2,219 products examined were guilty of greenwashing on some level, with cleaning products being one of the biggest offenders.

The statistic becomes even more concerning when operators consider the consequences of purchasing one of those items.

Two decades ago, wasting money on something that wasn’t any better for the environment was virtually the only consequence—albeit a serious one—of falling prey to greenwashing.

“There was a sense that a company could put out information claiming to be green, and that was enough to make people feel good,” Oshman says. Now, however, the fallout can be much more damaging.

“The consumer no longer wants to have a nice, touching experience,” Oshman says. “They want: ‘If I buy that organic apple, it had better be organic.’”

The GRA regularly fields calls from customers who want to verify that certified restaurants are complying with all of the necessary standards.

“We do get people calling us saying, ‘Is this restaurant doing this? Is this restaurant doing that?’” Oshman says. “So do consumers really care? Yeah, they do.”

And if a restaurant repeats false claims to its customers, suddenly the supplier isn’t the only one who’s guilty—the restaurant is as well.

“Yes, that’s greenwashing, even though it’s unintentional,” Oshman says. “They get points for not being intentionally deceptive, but at the end of the day it still reflects on their business.”

In the case of GRA-certified restaurants, Oshman can point customers toward concrete and publicly available standards of certifications—as well as proof (in the form of invoices) that restaurants have met them. But if a customer finds out a restaurant can’t back up its environmental claims, the concept’s good name can be at risk.

“Greenwashing destroys trust, and one of the most valuable things a restaurant owner has is the trust of their customers,” Case says. “If you are caught greenwashing, it raises suspicion about your other operations. That’s what makes this truly dangerous.”

“You get one chance with your reputation, and if you blow it, you can’t go back,” Oshman says.

Concerned consumers aren’t the only ones playing the role of greenwashing whistleblowers, either.

The Federal Trade Commission has guidelines that all environmental marketing claims must meet.

“They have been very actively filing enforcement actions,” Case says.

Unqualified environmental claims are a clear violation, as are claims that overstate a product’s environmental attributes or that are overly general. For the full list of regulations, see the FTC’s Guides for the Use of Environmental Marketing Claims, available at www.ftc.gov.

“The FTC says it’s what the consumer believes a claim means,” Case says. “You have to be very careful to be very clear, otherwise customers might misunderstand what you mean. That’s when problems begin.”