 Sixty percent of people say business is not a reliable source of environmental information. Basically, they think business says more than it actually does. What are the key principles for avoiding greenwash and creating credibility in corporate environmental messages?
Background
Low community trust is a serious issue for any business concerned about its reputation. The 10th Edition of the Concise Oxford English Dictionary recognised the word 'greenwash', defining it as 'Disinformation disseminated by an organisation so as to present an environmentally responsible public image'. The Australian Competition and Consumer Commission ensures compliance with the Commonwealth Trade Practices Act 1974 (TPA). Section 52 of the TPA contains a general prohibition on 'conduct that is misleading or deceptive or is likely to mislead or deceive.' Section 53 prohibits a corporation from (amongst other things) representing that 'goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have.' Greenwash becomes an issue under law where any false or misleading representations are made about a product or service, such as false environmental claims that are 'self declared'.
Self-declared environmental marketing claims (ACCC)
The Debate
Business often claims that the power of the market is what will drive sustainability if harnessed for that purpose. Surveys of consumer intentions show that people want to 'buy green' while market share results reveal that a much lower proportion actually do so even when the choice is available. The gap is in part due to people's distrust of environmental claims. After all, why would you pay the green premium if you don't believe it really is green? This confusion of the marketplace applies equally to business consumers as to individual consumers. When people lose trust in the environmental messages from business, they also loose trust in the ability of business to address their environmental impacts. If an example of greenwash is exposed, the business can suffer enormous reputational damage. Even if consumers don't react all that badly, investors, business clients, shareholders and community groups may react negatively. Reduced trust undermines 'values based marketing' and decreases brand loyalty. Greenwash makes reputations less valuable.
TEC Position
TEC has a wide definition of greenwash and some suggestions about how to avoid it in, Greenwash: Reputation or Reality? (604k)
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