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Green Marketing Guide 0905FINALAMK.Qxp What Marketers Need to Know about the Updated FTC Green Guides By Jacquelyn A. Ottman and David G. Mallen HOW TO MAKE CREDIBLE GREEN MARKETING CLAIMS CONTENTS INTRODUCTION: GREENWASH! 3 INTRODUCTION: RISKS OF GREENWASH TO CORPORATE REPUTATION 6 THE CHALLENGES OF COMMUNICATING GREEN 8 THE FTC GREEN GUIDES: GREENWASH! AN OVERVIEW 11 NATIONAL ADVERTISING DIVISION 12 THE 2012 FTC GREEN GUIDES: WHAT’S NEW 14 - Case Study: Tested Green 14 - Case Study: Panasonic and GreenPan 15 - Case Study: Green Seal 17 - Case Study: Degradable Claims 18 - Case Study: Zero VOC Paint 19 HOW TO FURTHER ESTABLISH CREDIBILITY AND AVOID GREENWASH 24 By Jacquelyn A. As marketers move toward - Case Study: HSBC Empowers Ottman and David G. Big Change With “There’s No greener products, messages are Mallen Small Change” Campaign 25 - Case Study: Patagonia Footprint often confusing buyers Chronicles 27 - Case Study: BIFMA 29 CONCLUSION 33 THE OTTMAN CHECKLIST FOR CREDIBLE GREEN MARKETING 34 Shoppers are actively seeking out greener products, energized TODAY’S HELPFUL LINKS 36 by the prospects of healthier alternatives, preserving the environ- ABOUT THE AUTHORS 36 ment for future generations, saving time and money in the long run CONSUMERS APPENDIX 1: THE 2012 and higher-quality products. (See Why Americans Are Motivated to FTC GREEN GUIDES 37 Purchase Environmental Products, P. 4.) Cone Communications, a ARE APPENDIX 2: ECOLABELS 37 corporate responsibility and public relations agency, has been meas- uring consumer’s receptivity to cause-related marketing for 20 SHOPPING DISCLOSURE: The views expressed in years. According to the Cone Communications Green Gap Trend this report are those of the authors and do not necessarily represent the views Tracker and its 2008 Cone Green Gap Survey, as of 2013, a record WITH A of NAD, ASRC or the Council of Better high 71% of American consumers reported that they routinely or Business Bureaus Inc. or the Federal NEW Trade Commission. This report does not sometimes consider the environment when they shop, up from 66% constitute legal advice. in 2008. Propelled by sales of organic foods, natural personal-care, AGENDA. household cleaning and laundry products, sustainable apparel and PowerPoint slides of charts hybrid-engine cars, the U.S. market for “green products” was esti- and web links are available for CONSUMERS buyers to download. Click this icon mated at $290 billion in 2010 by the Natural Marketing Institute. above reading pane. Thanks to media attention to environmental issues, the ARE ASKING introduction of eco-oriented curricula in schools and marketing This document and information contained herein are the copyrighted property of Crain Communications support behind one of the biggest opportunities for sales, NEW Inc. and Advertising Age (Copyright 2013) and are for your personal, noncommercial use only. You brand-burnishing and innovation to come along in generations, may not reproduce, display on a website, distribute, QUESTIONS. sell or republish this document, or the information today’s consumers are shopping with a new agenda. They are contained therein, without the prior written consent of Advertising Age. Copyright 2013 by Crain plucking products off supermarket shelves according to 21st- Communications Inc. All rights reserved. century criteria. In addition to quality, performance, conven- ADVERTISING AGE SEPTEMBER 16, 2013 · 3 HOW TO MAKE CREDIBLE GREEN MARKETING CLAIMS ience and attractiveness, consumers are asking new questions: ENVIRONMENTAL BUZZWORDS Where was this coffee sourced? Were the workers paid a fair A myriad of marketing words often confuses consumers. wage? Can I recycle this package in my community? The myriad new marketing buzzwords that such green-seek- OZONE- ing has spawned literally spans all aspects of the product life FRIENDLY SUSTAINABLE Recyclable FEEDSTOCK cycle, including the growing, mining and processing of a prod- RECYCLED CARBON uct’s raw materials; the impact of its manufacture, distribution GREENHOUSE GASES BIOENERGY FOOTPRINT and marketing; and the impacts consumers incur during its use, NATURAL BIO-BASED after-use (recycling, reuse, etc.) and eventual disposal. CONTENT Clean SUSTAINABILITY But there’s a phenomenon called “greenwash” that threatens to Photodegrable derail the green-marketing revolution. Environmentalist Jay BIODEGRADABLE Energy Westerveld coined the term “greenwash” in a 1986 essay that criti- NATURALLY NONTOXIC ENVIRONMENTALLY Eco-Smart DERIVED cized hotels that encouraged guests to reuse towels for environmen- RENEWABLE tal reasons but then made little or no effort to recycle waste. LIFE CYCLE FRIENDLY Compostable Whether intentional or not, greenwash engenders skepticism that can stop consumers from seeking alternatives for lightening their environmental footprint and safeguarding their health. Defined as marketing efforts that are perceived as ill-conceived, inauthentic or WHY AMERICANS ARE MOTIVATED TO misleading, greenwash raises a red flag with corporations who might otherwise more aggressively develop and market their own PURCHASE ENVIRONMENTAL PRODUCTS legitimate eco-innovative initiatives. Health concerns, preserving the environment and saving The potential for even the best-intentioned marketers to money or time are top reasons. confuse consumers with misleading green claims, ads and other 2013 2012 communications is high. Green issues are highly technical, com- plex and fast moving. New environmentally preferable designs, They believe it’s healthier for 88% materials and technologies enter the marketplace daily. Against themselves, their families or this backdrop, consumers do not understand basic principles of 88% their communities. environmental science, much less (as surprising as it may seem) such oft-used buzzwords as “recyclable” and “biodegradable.” More than half of Americans believe erroneously that common They want to preserve 87% environmental marketing terms such as “green” or “environ- the environment for mentally friendly” actually mean a product has a positive (40%) future generations. 85% or neutral (22%) impact on the environment. Only 22% of them can correctly identify these terms as meaning lighter impact, or less impact than it used to have (2%). (See When Americans See It will save them time or 84% a Product Advertised as ‘Green’ or ‘Environmentally Friendly,’ money in the long run (e.g., They Think It Means, P. 5.) saves water, electricity). 90% What’s more, because green methods are often so new, the market’s leading players—the product designers, raw-material suppliers, manufacturers, retailers, marketers and the media, They believe it’s a better and even regulators and legal counsel—typically lack education 78% product (e.g., better design, and experience with many environmental issues. Call it a case higher quality). 82% of the blind leading the blind. If manufacturers are to develop legitimately greener products and packages, and if consumers are going to be able to make responsible choices, then the mar- ketplace needs to understand the issues; consumers need bet- It’s a way for them to show 58% others they care ter education; and mechanisms and processes are needed to about the environment. 60% enable industry to clearly and straightforwardly communicate the environmental benefits of their products and packages. SOURCE: 2013 CONE COMMUNICATIONS GREEN GAP TREND TRACKER Tools such as life cycle assessment, eco-labels, seals and certifi- cations have been developed. These tools will be discussed in 4 · SEPTEMBER 16, 2013 ADVERTISING AGE HOW TO MAKE CREDIBLE GREEN MARKETING CLAIMS WHEN AMERICANS SEE A PRODUCT ADVERTISED AS ‘GREEN’ OR ‘ENVIRONMENTALLY FRIENDLY,’ THEY THINK IT MEANS Consumers are often confused about just what is and isn’t helping the environment when they shop. The product has a positive 40% (i.e., beneficial) impact on 36% the environment. 48% The product has a 22% lighter impact than other 25% similar products. 18% The product has a 22% neutral impact on the 18% environment. 14% 9% They don’t believe it means anything. 11% 7% 2% The product has a negative 3% impact, but less than it used to. 4% 5% 2013 They don’t know what it means. 6% 2012 10% 2008 SOURCE: 2013 CONE COMMUNICATIONS GREEN GAP TREND TRACKER this report, but its main focus is the Federal Trade Commission’s Since avoiding greenwash by communicating a product’s or Green Guides, and what the 2012 revisions mean for marketers. company’s environmental performance credibly and effectively This report starts by looking at the risks to industry of green- involves much more than making truthful environmental mar- wash, followed by a closer assessment of the key challenges asso- keting claims, this report includes five additional strategies that ciated with credible green marketing. It will then provide an businesses can use to help eco-aware consumers make informed overview of the FTC Green Guides, describing what they are and purchasing decisions. A practical checklist of questions that mar- what they are not. After that, we will dive into the various claims keters and their legal and technical counsel can ask in order to and concepts the 2012 Green Guides now espouse, illustrated by put the report’s lessons to work is also included. Finally, we will hypothetical examples and actual case studies from the annals of offer some conclusions, including projections going forward, the Federal Trade Commission, the National Advertising Division together with helpful links. A copy of the revised FTC Green of the Better Business Bureau and other
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