Meander the aisles of your local supermarket, flip through glossy mags, or idly surf the blaring television ads and you’ll probably have noticed a green aura radiating from everything from beer to Beamers. The market is awash with ambiguous marketing claims such as ‘environmentally friendly’, ‘green choice’ and ‘low carbon’ amidst a confusing sea of labels, standards and certifications. While the trend may have increased consumer choice, it also risks misleading shoppers.
The rise of the ‘green’ consumer
Consumer awareness is driving demand for less environmentally harmful options across a range of products. Eco-aware shoppers are increasingly concerned about the global impacts of their spending decisions, and are putting their money where their mouths are; the new ‘green economy’ is a booming industry worth US$500 billion globally, and growing at a rate of 20% per year. Surveys show that 32% of consumers rank global warming among their top two concerns and are willing to pay more for low carbon products.
The information divide
While consumers are clearly concerned, there is a lot of confusion and misinformation about the shop. The science behind climate change is complex, and the accurate calculation of product’s carbon emissions—and therefore the effectiveness of offsets—depends on a range of variables and assumptions. Thus, unlike the taste of cola consumers generally cannot verify carbon claims alone, and must rely on the accuracy and credibility of the numerous labels plastered over products.
The business perspective
In response to this demand from consumers, investors and stakeholders, businesses are using claims about their carbon performance to differentiate themselves from the competition. Wall Street gurus have observed that proving a company’s eco-credentials no longer provides a marketing boost, but is necessary to prevent falling behind the competition, such is the rush to tap into the ‘green’ market. Amidst this climate of urgency, some are taking short cuts, such as Coopers Brewery, which published its ‘big beer, tiny footprint’ advertisement before actually measuring its carbon footprint. Other businesses are making bona fide steps, with 37% of small-to-medium enterprises (SMEs) working to reduce their impact through recycling and energy efficiency, while big retailers such as Coles and Woolworths are opening ‘green stores’ that aim to use up to 30% less electricity. However, business appears just as confused as consumers with 44% unsure about the best way to reduce emissions.
So many labels…
There are a number of different voluntary carbon offset schemes and certifications, and multiple methods of offsetting emissions, from biosequestration (tree planting), to investing in renewable energy, to purchasing energy-efficient light-globes. In Australia, there is little regulation of these schemes, and no mandatory standards, meaning that there is a great divergence in quality, environmental effectiveness and cost, depending on how companies calculate and offset emissions. For both consumers and companies, it is difficult to judge the content and relative value of carbon reduction and offset claims.
The consequences?
For the consumer, greenwash fosters distrust, apathy and cynicism, and risks dampening the positive ethics behind consumer concern. It also disadvantages honest businesses by preventing truly ‘green’ products from differentiating themselves. It also diverts dollars to products and services with negligible or negative environmental benefit, as companies can buy the green badge for a cheap, poor-quality environmental initiative. This tends to spiral, producing more greenwash, less competition, and less innovation. Bad news all round.
What you can do
Report shonky ads to the ACCC:
www.accc.gov.au or 1300 302 502
Look out for the Greenhouse Friendly logo:
www.climatechange.gov.au/greenhousefriendly/
Check out the CHOICE Green Watch campaign:
www.choice.com.au
Further info and how I know this:
The value of the market in Australia is estimated to be AUS$12 billion—See National Product Liability Association, ‘Green Marketing and the ACCC’, a presentation by ACCC Deputy Chair Louise Sylvan (8 May 2008, Melbourne).
Nielsen, Consumer Confidence, Concerns and Spending Intentions (July 2007), p 7 [Online] Available:
http://au.nielsen.com/site/documents/GlobalConsumerConfidenceJuly07.pdf
Fosters Group market research claims that 81% of Australians are interested in purchasing products or services that are greener options – Ben Summons, Fosters Group Marketing Manager:
http://www.abc.net.au/news/stories/
2008/06/20/2280890.htm In a July 2008 Herald/Nielsen opinion poll, 68% of respondents said they were prepared to pay more for goods and services to reduce greenhouse gas emissions.
ACCC, Green Marketing and the TPA, p 1
Wall Street Journal, cited in a speech by ACCC Deputy Chair Louise Sylvan for the National Product Liability Association, ‘Green Marketing and the ACCC’ (8 May 2008, Melbourne)
Choice has recently lodged a complaint with the ACCC over claims by Coopers Brewery that it was Australia’s greenest beer, taking exception to the tagline ‘big beer, tiny footprint’ after it was alleged that the brewer had not actually measured its carbon footprint before publishing the advertisement
Sensis, September, available at SmartCompany,
www.smartcompany.com.au
Commonwealth Bank-CC Survey of WA Business Expectations, results reported in Department of Treasury and Finance, Government of Western Australia, Western Australian Economic Summary 2007 No 1 [Online] Available:
http://www.dtf.wa.gov.au/cms/uploadedFiles/
2007_no1_wa_economic_summary.pdf
