When “green” means greed: consumers strike back against inflated claims
Wednesday, April 28, 2010
According to research by The Boston Consulting Group, one in six U.S. consumers say they would pay more for a product that is environmentally friendly. One might think that news would be an incentive for companies to actually produce more environmentally friendly products. But some companies seem to think consumers will pay more for products they think are environmentally friendly — whether they are or not.
Wall Street Journal reporter Vanessa O’Connell writes there is a “rising tide of legal and regulatory actions aimed at products pitched as ‘environmentally friendly.'”
Companies stand accused of, among other things, adding self-designed labels that imply their products have won some third-party seal of approval; touting products as “biodegradable” when there is little chance they would actually decompose in a landfill; and labeling rayon fabric—created from tree cellulose processed with a chemical that releases hazardous air pollutants—as made of bamboo, which is merely substituted for the wood fiber.
An example of the “self-designed labels” that imply a “seal of approval”: the Greenlist label on Shout and Windex products sold by SC Johnson. The company’s website says SC Johnson itself developed the Greenlist “process” “to classify ingredients considered for use in our products by their impact on the environment and human health.” But anyone looking at the label on the product might understandably come to the conclusion that the product has been placed on a list of environmentally-friendly “green” products.
[We] found that Windex Blue is composed of 95% water, 4% isopropanol (alcohol) and up to 1% ethylene glycol, that supremely toxic substance beloved of children and pets because of its sweetness. and wondered “Who could call that green?” Well, it turns out SC Johnson can, because it made up the Greenlist label….So if they decide that selling water with a little alcohol and poison in a plastic bottle is green, they can, because they own the label.
Green labels mean nothing if they are not independently monitored with third party evaluation, Standing up and saying “I’m green because I say so” doesn’t cut it any more.
Earlier this year, a federal judge denied SC Johnson’s request to dismiss the suit, writing, “it is plausible that a reasonable consumer would interpret the Greenlist label as being from a third party.” A trial is scheduled for December.
In a follow-up to her story printed in the Journal, O’Connell wrote on WSJ’s Law Blog some of the challenges to “green” claims aren’t coming in the courts but from the National Advertising Division (NAD) of the Council of Better Business Bureaus:
Though it has no enforcement authority, its publication of its decisions can expose overblown product claims, and serve to deter them. On NAD’s recommendation, Clorox recently discontinued a biodegradability claim for its “Green Works Natural Cleaning Wipes.” Clorox has switched the claim to “compostable.”
Overstated green claims are concerning because they represent a “potential for insidious deception” of consumers who aim to make good environmental choices and “drive public policy with certain products,” Andrea Levine, director of the NAD, and a former assistant attorney general for New York, told the Law Blog.
What O’Connell refers to as “overstated green claims” is also known as greenwashing, which has been defined as “the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service.” And the civil justice system will play a key role in reducing such misleading claims. University of Michigan business professor Thomas P. Lyon told O’Connell lawsuits will put pressure on companies “to hone their green messages and make them more factual and credible.”