Companies turn to 'greenwashing' to mislead consumers, sell products

As the organic industry makes the shift from niche to mainstream, a debate has developed in regard to “greenwashing”--the alleged misleading of consumers by companies regarding the environmental benefits of a “green” product or service.

“Consumers are inundated with products that make green claims,” stated Scott McDougall, president of Philadelphia-based TerraChoice Environmental Marketing Inc., in a press release. “Some are accurate, certified and verifiable, while others are just plain fibbing to sell products.”

“Green” is a broad term that has come to mean placing a high importance on changing one's behavior in order to promote environmental sustainability.

The terms green and organic are naturally tied. The term “organic” refers to the way agricultural products are grown and processed. The organic label is given to products produced without the use of toxic pesticides and fertilizers, antibiotics, synthetic hormones and genetic engineering. Organic foods are minimally processed and without artificial ingredients or preservatives.

According to a survey by the Organic Trade Association, by 2025 it will no longer be considered fringe to “go organic.”

From organic Twinkies to organic water, organic surrounds us, and is expected to become so commonplace that everything could have an organic version.

In a 2007 survey, TerraChoice determined that 99 percent of 1,018 products sampled, ranging from toothpaste to printers, were guilty of greenwashing. The company uses its six “sins of greenwashing” as a gauge of measurement, such as the sin of hidden trade-off.

An example of a hidden trade-off would be not taking into account the impacts of transportation, manufacturing, packaging and all other elements that go into production of a sustainable good. As defined by the Environmental Protection Agency, sustainability refers to “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”

Organic mattress wholesaler Custom Rest Bedding Inc., which operates as Vivetique, is aware of the environmental effects of transporting goods from its Arcadia, Calif. warehouse across the country. The company has plans to open a new 33,000-square-foot warehouse in Lucas, Iowa, that will “lower our overall carbon footprint,” said Vice President Scott Carwile.

With the growing presence of greenwashing, consumers are becoming skeptical, noted Suzanne Shelton, president and CEO of Skokie-based Shelton Group. There is a backlash to green messaging out there and “we have to shake some stuff out,” she declared.

In a recent survey by Burlington, Mass.-based Burst Media Corp., 23 percent of respondents said they seldom or never believe green claims made in advertisements, while 65 percent said they “sometimes” believe.

To encourage standardization, and therefore credibility, the Federal Trade Commission has developed guides for environmental marketing claims, also known as the Green Guides, which apply to labeling, advertising, promotional materials and any other form of marketing. However, the guides are not rules and therefore are not enforceable.

The Green Guides were last revised in 1998, yet with the increase in environmental claims flooding the market, guidelines need to be redefined. In late April the FTC hosted a public workshop to examine developments in green packaging claims and the consumer perception of the claims, part of a series of reviews of its Green Guides.

A popular trend among environmental marketing and research firms is to separate the organic consumer into different segments. London-based Mintel International Group Ltd., with offices in Chicago, uses its own “shades of green” to define consumers in four main groups: Super Greens, True Greens, Light Greens and Never Green.

Super Greens are completely committed to a green lifestyle and almost always purchase green products, while the Never Greens appropriately never buy green products. But based on an August 2006 survey, the Never Green category shrank by half and the True Green/Super Green categories tripled in size in a 16-month period.

Those truly committed to green can turn to Web sites like GreenWashingIndex.com and Greenwashing.net for an open forum to share thoughts and concerns about the increased presence of allegedly environmentally- conscious products in the mainstream marketplace. GreenWashingIndex.com, for instance, allows its users to submit an advertisement for a greenwashed product, and then rank it on a scale from “total greenwashing” to “good ad.”

The debate about greenwashing has been propelled by the increasingly large presence of eco-friendly products. In April 2007, Wal-Mart Stores Inc. established the Live Better Index, which follows the adoption rates of environmentally conscious products based on sales data in its stores.

Based on April 2008 Live Better data, Illinois is the fifth “greenest” state in regard to consumption of the five sustainable products measured, with Indiana as the 21st “greenest” state. Compact fluorescent bulbs, organic milk, extended-life paper products, organic baby food formula and reduced-packaging liquid laundry detergent were used as measurements.

As a whole, adoption rates of the five products increased 66 percent in April 2008 as compared with April 2007.

Echoing Wal-Mart's findings in its own studies, the Harleysville, Pa.-based Natural Marketing Institute reported that across six product categories, total organic household penetration was up 59 percent in 2006 as compared with 57 percent in the year-prior period.

And based on data released by the Organic Trade Association, mainstream retailers represented roughly 46 percent of total organic food sales in 2005. That same year, the U.S. organic industry grew more than 17 percent to $14.6 billion in retail sales, and nonfood organic products (household cleaners, clothing, bedding, and pet food) soared 32.5 percent to $744 million in sales.

Nevertheless, Senior Marketing Partner Paul Travis of Seattle-based OneAccord Corp. considers the organic industry as a whole “still on the verge.” Green apparel for example, is an area that has seen buyers purchasing less because of limited penetration, according to a February report by Mintel.

Yet in order for the organic industry to fully flourish in the mainstream, proponents say, government support for farmers, both in education and funding, is needed as a way to advance organic agriculture. The proponents fear, however, that with lack of enforcement and increased presence of “greenwashing,” the term “organic” could be reduced to nothing more than a marketing claim.