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Even though they are voluntary, the Federal Trade Commission’s “Guides for the Use of Environmental Marketing Claims” are highly influential with marketers trying to decide how to promote the eco-friendliness of their products and services.
The so-called “Green Guides” were first issued in 1992 and were revised in 1996 and 1998. They’re undergoing revision again, and public comments on the latest revisions are due to the agency by December 10, 2010.
Some of the “Green Guides” updates are noteworthy and could significantly impact marketing, including more specific definitions of certain terms:
Degradable: The “reasonably short period of time” for complete decomposition of a product or package is defined as one year.
Free of: Use of this term may be considered deceptive if (1) the item has substances that pose the same or similar environmental risk as the substance not present; and (2) the substance has never been associated with the product category.
Made with renewable energy: Marketers should not use this term if any part of the product was derived from fossil fuels and they should specify the source of renewable energy.
Carbon offsets: Marketers should disclose if the emissions reductions from the offsets purchased will not occur for two years or longer.
FTC cautions marketers “not to make blanket, general claims” using terms such as “environmentally friendly,” “eco-friendly” or “green" (apparently with a big exception for the name of its own guides).
On the other hand, the agency took no position on the use of “sustainable” or “sustainability” because it “lacks a sufficient basis to provide meaningful guidance.” Maybe retaining the flexibility to use such terms is good. On the other hand, this is “the elephant in the room.” Perhaps a term that is apparently so undefinable may also be unsustainable? Isn’t this how “green” lost its credibility?
To paraphrase comic strip character Pogo, “we have met the enemy and they (may be) us.”
At least that is how many sustainability consultants, ratings organizations and sustainability-devoted companies should be feeling these days. For a field so concerned about global acceptance, consistency and transparency, sustainability has a long way to go. The problem is there are more than 100 CSR/corporate sustainability rating and ranking systems.
According to a new “Rate the Raters” white paper (available as a free download) by SustainAbility, a sustainability think tank and strategy consultancy based in New York, 87 of the 108 rating systems studied have been around less than 10 years, which means a new rating/ranking system has been introduced approximately once every 42 days over the last 10 years. There are now rating systems that rate the ratings ,and some programs create a composite, multi-rating score – it’s like college football’s BCS system, except with a whole lot more at risk for all of us.
Furthermore, the white paper reported that only a handful of ratings provide the sort of disclosure that allows users and companies to understand how the ratings are constructed – in other words, they lack transparency, which is one of the most important things that rating organizations are supposed to be looking at when doing their evaluations.
Under the heading “Responsiveness Trumps Performance,” SustainAbility reported more than 60 percent of the ratings depend wholly or in part on information being submitted directly to ratings organizations, “thereby rewarding companies with the greatest capacity to respond to ratings requests rather than those with the best performance.” It’s no wonder consumers are wary of greenwashing and many well-intentioned companies have no idea how, or if, to join the ratings free-for-all.
The commitment to building a high-performing, sustainable organization takes significant time and money. So do measuring, demonstrating and reporting progress. Industry does not have unlimited resources, or patience. It is incumbent upon the raters and rated to take a hard line toward building a consensus and common-sense standards on sustainability ratings.
Companies are being held to increasingly high standards. Those who want to set the standards need to be willing to do the same. Otherwise, they’re just pay-to-play membership organizations. Until these various systems are sorted out, we’ll all be left to wonder who’s really doing well by doing good. And who’s just good at filling out forms and aligning themselves with like-minded organizations.
What the world needs now is another multi-tiered, comprehensive online resource for helping investors and corporate leaders track and manage sustainability, corporate social responsibility, CSR reporting, and socially responsible investing. I actually don’t know anybody who really believes this. The fact is we already have way too much information, too many sites, too many indexes and ratings – and not nearly enough useful, digestible knowledge.
And, yet, the information databases, Web portals and news aggregators continue to proliferate.
The latest entry is SustainabilityHQ™, founded by the New York-based Governance & Accountability Institute, Inc. This new, subscription-based online platform is designed to track the activities and influence of “watchers” such as market players and influencers. Institute Chairman/CEO Hank Boerner said the platform is designed to “help users ‘watch the watchers’ so that both corporate and investment managers can better understand and participate in” investors’ rising expectations about the sustainability, social responsibility and corporate governance of public companies. SustainabilityHQ, formerly known as INSIGHTS-edge™, offers a free trial demo, after which time a site license fee is charged.
In her October 12, 2010 CSRwire column, contributing writer Elaine Cohen offers some good insight into the new service, which has four sections: ESG & Sustainability, U.S. Public Employee Pension Funds, Sovereign Wealth Funds, and Asset Managers.
I can’t go into detail here about other platforms that offer additional, adjacent or redundant information, but here are some you may want to look at: Social Investment Forum, SocialFunds, AccountAbility, Global Reporting Initiative, Dow Jones Sustainability Index, Carbon Disclosure Project, FTSE KLD 400 Social Index, Global Environmental Management Initiative, CSRwire, Calvert Social Index, and so on. And every one of them offers a wealth of information, usually for a membership or subscription fee.
The bottom line is socially responsible investing is big business: accounting for $2.7 trillion in professionally managed U.S. portfolios. Knowing where to invest and what to look for are major challenges; buyer beware! Socially responsible investing information is also big business. And the “buyers” – the providers and consumers of the information – are rightfully wary, confused, concerned and overwhelmed.
Maybe SustainabilityHQ will prove to be the ultimate full-service, easy-to-use solution. Or could it be just one more gas guzzler on the information superhighway? The proof will be in its own sustainability and attraction power because I’m sure “the next big thing” announcement is due out any day now. And then another. And another…
With Three Ps, sustainability is a win-win-win for people, planet and profit, right? If business leaders and consumers look deep enough, they’ll find that what’s good for the environment and people will help the bottom line, and vice versa, right? Some believe it’s always possible to find the win-win-win. Apparently, none of those people eat snack foods, however.
The Internet, consumer marketing and sustainability worlds are buzzing with discussion about Frito-Lay’s decision to discontinue use of biodegradable packaging for most of its SUNCHIPS® brand Multigrain Snacks. Part of the marketing pitch for the snacks has been that the packaging is biodegradable. The problem is that, as a result, the bag is TOO LOUD. Consumers, many of whom presumably valued the bag’s biodegradability, have complained and the packaging is being changed to more traditional packaging.
Critics are charging that Frito-Lay’s decision is an overreaction; a sign of “supercapitalism,” an emerging, derogatory term coined by former Secretary of Labor Robert Reich. According to Reich, the problem is that organizations and individuals have become obsessed with consumption and profits over all other considerations.
For me, the SUNCHIPS story is a sign of the real world, where sustainability is part of the mix but rarely the deciding factor. In the real world, even with something as trivial as a noisy snack bag, few people will put environmental footprint ahead of all other considerations, which include comfort, convenience, aesthetics, cost, safety and so on. That is exactly what the Shelton Group has found in its EcoPulse studies. Be sure to read Suzanne Shelton’s latest blog post, The poor SUNCHIPS bag: a cautionary tale.
What other examples from everyday life can you think of?
