Greenwashing in the Consumer Marketplace: Marketers Will Make Green as Long as Consumers Go Green

The recent practice of what has become known as “Greenwashing” refers to the act of companies dishonestly or insincerely branding their products as environmentally friendly when in fact they are not nearly as environmentally sound as consumers are lead to believe. The challenges associated with Greenwashing are quickly becoming an invitation for legal intervention on many fronts and may likely continue to develop into a niche legal practice with an abundance of opportunity. Greenwashing claims are becoming extremely popular, and lawsuits and class actions in relation to Greenwashing claims have only seen the tip of the iceberg according to industry experts.

Although misleading advertising and false labeling is not uncommon amongst many industries, I’ve decided to focus specifically on these issues as they relate to  Environmental Marketing because of the immense consumer fixation on “Going Green” and companies’ determination to meet this consumer need.

We are now living in a world where  “Going Green” is rapidly becoming the norm. Green advertising has increased 10-fold in the last 20 years. A recent study found that Green Products sales have increased by 71% from 2007 to 2009. In addition, a recent survey conducted found that 70% of consumers are willing to pay up to 20% more for environmentally beneficial products. As such, it is no surprise that corporations and marketing agencies are taking advantage of this green appetite.

Terrachoice, a Canadian marketing firm surveyed 2, 219 North American products with the purpose of recording every product-based environmental-claim they observed. During the course of their market research, questions were asked of every environmental product claim being surveyed. These questions included: whether the claim was truthful; whether the company could offer validation for its claim from an independent and trusted third party; whether the claim was specific, using terms that have agreed-upon definitions, and not vague ones like “natural” or “nontoxic”; and whether the claim was relevant to the product it accompanied. In conclusion it was found that 98% of the product claims assessed were demonstrably false or risked misleading intended audiences.

Much marketing trickery was discovered. One of the misleading marketing practices engaged in was “Vagueness.”  For example, the term “All Natural”, or “Naturally-Derived” which marketers may use to convey the idea that a product is environmentally friendly can just as easily mean the inclusion of natural poisons such as arsenic, and mercury.

Another misleading tactic marketers engaged in was promoting the absence of an already banned product. For example, the phrase “CFC-Free” was found on one product. This conjures up thoughts in a consumer’s mind of an environmentally responsible product when in fact the claim is irrelevant given the banned use of the substance in the first place.

Furthermore, some companies created their own self-branded labels to go along with their products, which serve to persuade consumers that the products were endorsed by third parties and/or met external certification standards through rigorous testing.

Some other concerns associated with Greenwashing include the failure of environmental products from meeting consumer expectations. This can lead to consumer skepticism in purchasing Green products and detract from what some may consider laudable social goals such as sustainable development. In addition, Greenwashing may create anticompetitive market conduct as unmerited claims may take away market share (and eventually consumer confidence) from legitimate products. This will then lead to a reduction in environmental innovation.

In the litigation world, a class action has been launched against S.C. Johnson & Sons Inc. in California as a result of its own “Greenist” trademark on its Windex brand which allegedly misleads consumers about the “environmental safety and soundness” of its product. In addition, Honda Motor Co. has been sued in the United States on the automotive front as the claimant alleges that his Civic Hybrid consumes too much gasoline to be considered fuel-efficient. In addition, it was recently reported that a carbon credit trading company in Australia made misleading green claims and was found guilty.

I think it is only be a matter of time before Greenwashing claims advance from consumer products and services eventually moving toward the building and construction sector and beyond.  After all, wherever environmental sustainability is at play, so to will environmental claims put forth by companies.

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