The Green Marketing Machine

By MoneyShow.com AAA

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A television commercial begins. A lush green forest comes into focus. Water drips and sparkles from the tips of healthy leaves. Somewhere, a bird is singing in the crisp dawn air. Then a beard - a scraggly, devil-may-care beard - drifts from the underbrush. The beard is worn by a young, fit environmentalist. He's here protecting this pristine wilderness. As the commercial continues, you learn he works for an oil company. You learn the oil company is doing all sorts of wonderful things to protect the planet. Somewhere deep in the pit of your stomach this incongruence registers - oil company, environmental protection - that can't be right, can it? But it's so hard to disbelieve. Look at those plants, the water, the beard. Maybe an oil company can change? Maybe it does care about the environment?

No, it can't. No, it doesn't. The truth has just been "greenwashed".

What is greenwashing?
Greenwashing is an advertising and public relations spin designed to make a corporation look more environmentally friendly than it actually is. The practice has become so popular that the term even made it into the tenth edition of the Oxford English Dictionary. Corporate greenwashing is an issue that everyone should be mindful of. No one wants to be lied to, and lies that affect the environment - and possibly human health and survival - are particularly heinous. In a world where going green means big money to corporations, it's not surprising that some cut corners.

In this article we'll explore why corporations greenwash their activities, provide some prime examples of greenwashing and show you what you can do to ensure that you are not the latest greenwashing casualty.

Why Companies Use Strong-Arm Tactics to Bend the Truth
Asking a corporation to go green solely on the basis of ethics is a bit like asking a shark to stop eating because the other fish are getting upset. It is simply unequipped to make a moral choice. Sharks eat fish; corporations make money - it's what they do. Increasing sales of their goods and services, cutting costs and increasing efficiency all play a role in making a company - and its shareholders - more cash.

The interests of the shareholders always come first - always. Corporations, and by extension corporate executives, are legally bound to make as much money for their shareholders as possible. This isn't a bad thing. It's a system of rules that guarantees that when you invest your money into a company, you can be confident that the people running it will do their best to ensure you see a return on your investment.

This is where another concept of the corporate world comes into play: cost-benefit analysis. Cost-benefit analysis tells corporate executives that sometimes it's cheaper (and therefore better) to say you are going green, than to actually go green. (To find out more about cost-benefit analysis, read our Economics Basics tutorial.)

Overall, people like green companies. Being perceived as a friend of the environment can mean big money in a world where perception is reality. If lying has the same result as telling the truth, and costs less money, corporate executives are duty bound to do a little greenwashing. (To read about how going green benefits companies, read For Companies, Green Is The New Black.)

Let the Greenwash Flow
If you go to any corporation's website you are bound to find a "corporate responsibility statement" or "sustainability policy". These statements reassure us that the company really does care about the environment and social issues. Often the worst offenders have the best spin, admitting past discretions and, like a reformed criminal, promising to do better this time - honest. Let's have a look at some greenwashing all-stars:

  • British Petroleum (NYSE:BP)

What it says: In July 2000, BP launched a massive $200 million public relations and advertising campaign with the new slogan "Beyond Petroleum". It changed its logo to a green and yellow sun, and started spouting green-tinged comments.

What it does: In March 2006, BP spilled 200,000 gallons of crude oil in Alaska. The spill happened because BP failed to perform routine maintenance on its pipeline. In October 2007, BP was ordered to pay more than $60 million by the U.S. Department of Justice for breaking environmental laws in Texas and Alaska. According to the Environmental Protection Agency, this was the largest fine ever handed out for breaking Clean Air regulations. In addition, BP has lobbied continuously to open up the Alaska National Wilderness Reserve for oil drilling and to block legislation to introduce a mandatory curb on greenhouse gases in the U.S. In August 2007, The Washington Post reported in its article "Pollution Fight Pits Illinois Vs. BP, Indiana" that BP received a permit to dump more toxic discharges (including 50% more ammonia) from its Whiting refinery into Lake Michigan.

  • DuPont (NYSE:DD)

What it says: "We are guided by our core values: Safety and Health; Environmental Stewardship; Respect for People; Ethical Behavior. DuPont has a 204-year legacy of core values, rooted strongly in safety, health and environmental stewardship. For almost 20 years, we have been reducing the environmental footprint of our own operations" (DuPont website, accessed November 4, 2007).

What it does: DuPont is the largest corporate producer of air pollution in the United States, according to the Political Economy Research Institute at the University of Massachusetts Amherst. The company continued producing chlorofluorocarbons (CFCs) throughout the 1980s even though research in the ‘70s showed these chemicals contributed to ozone layer depletion.

In January 2005, DuPont reported a study on the chemical PFOA (a chemical used in Teflon and other nonstick products), saying there were no known human health effects associated with exposure to PFOA. However, it was reported in the Charleston Gazette ("DuPont Distorted C8 Study, Scientists", October 2007) that DuPont distorted the findings and the study actually said there were several harmful health effects associated with this chemical, including low birth weight rates and elevated cholesterol.

  • General Electric (NYSE:GE)

What it says: GE launched a $90 million "Ecomagination" marketing campaign in 2005. As part of the campaign, GE produced ads with a diesel train engine slipping through pristine mountains surrounded by flowers, birds and trees.

What it does: In a piece of impressive hypocrisy, while it ran the "enviro-choo choo" ads, the company was simultaneously lobbying the EPA to weaken proposed nitrogen oxide restrictions for diesel engines. A reduction in smog from trains and ships could provide more than $70 billion in health and environmental benefits within 20 years, according to the EPA, meanwhile, the cost of compliance would be only $2-$3 billion.

  • Exxon Mobil (NYSE:XOM)

What it says: "Recognizing the potential risks associated with climate change, we are taking actions to improve efficiency and reduce greenhouse gas emissions. We are also working with the scientific and business communities to undertake research to identify and develop economically competitive and affordable technologies to reduce long-term global greenhouse gas emissions while meeting the world's growing demand for energy" (Exxon Mobil website, accessed November 4, 2007).

What it does: The oil company funded 43 climate change denial groups in 2004 alone, according to a study by the U.S. Union of Concerned Scientists. Their report states that, between 1990 and 2005, the company funneled more than $16 million to advocacy groups that promote the denial of global warming through publications and websites that are not peer reviewed by the scientific community. (To read more about energy disputes, see The Biofuels Debate and Peak Oil: What To Do When The Wells Run Dry.)

  • Monsanto (NYSE:MON)

What it says: "We apply innovation and technology to help farmers around the world be successful, produce healthier foods, better animal feeds and more fiber, while also reducing agriculture's impact on our environment" (Monsanto website, accessed November 4, 2007).

What it does: In June 2007, Monsanto acquired Delta & Pine Land Company, a company that creates "terminator" seeds. These seeds grow into plants that produce sterile seed. This means farmers can't replant seeds from a previous crop, making them dependent on the company year after year. In the 1930s Monsanto bought the company that invented PCBs, a now-banned industrial coolant, and became the source of nearly all PCBs in the U.S. In a January 2002 Washington Post article ("Monsato Hid Decades Of Pollution"), it was revealed that Monsanto hid 40 years worth of PCB pollution in Anniston,Alabama. It's alleged the company dumped millions of pounds of PCBs into open-pit landfills and routinely discharged toxic waste into a nearby creek.

What You Can Do
If you suspect that the latest green convert isn't as pious as it claims to be, your first stop should be the internet. The backlash against greenwashing is growing, and information is getting easier to find. The following nonprofit websites are dedicated to telling the other side of the story:

These sites allow readers to cut through much of the spin a company produces. The information on these sites is referenced and sourced. Note: Much of the environmental record research for this article began at these sites.

Pass the Salt, Please
Not every company that touts its green achievements is lying, but it's important to remember that advertising and marketing campaigns are designed to highlight the good and ignore the bad. Sometimes it's cheaper to say you're a friend of the forest than to stop chopping down trees.

A healthy dose of skepticism is the key. Green marketing should only be swallowed with a grain of salt. Remember, if the tree-hugger beard looks too good to be true, it probably is.

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