Green Revolution or Green Wash? Cutting through the corporate spin
- Extra Reading
Brendan May, Planet 2050
Barely a day passes without a major company or brand unveiling some new ethical or green initiative of some kind. In response to growing public awareness of climate change, ethical trading issues and increased scrutiny by the media, regulators and campaign groups, business has been mobilised to trumpet its positive role in addressing social and environmental challenges. Corporate responsibility has become a huge global industry, and business leaders, like politicians, seem determined to out-green each other, give something back, and leave a lasting legacy.
But how real is the change? Is it all spin and no substance? What role is there for PR and advertising in communicating green and ethical credentials? Shouldn't companies be green anyway, and why do they need to shout about it? How should consumers know which eco-friendly claims are credible and which are not? And is there a risk that too many conflicting claims will turn shoppers off the whole ethical and green agenda altogether?
In this lecture, Brendan May will explore the rising tide of 'responsible business', highlighting best practice, worse practice, exploring the challenges in moving 'sustainable' business from fringe to mainstream. The lecture will examine some possible ways in which consumers can decipher the increasing range of ethical propositions laid before them, with a view to helping them decide what constitutes real behavioural change as opposed to plain old greenwash.
Green Revolution or Green Wash? Cutting through the Corporate Spin
When I re-read the Gresham College prospectus advertising this lecture I realised I had set myself an almost impossible task. The question I posed, 'Green Revolution or Greenwash?' is simple enough. But the answers are far from easy. In promising to 'cut through the corporate spin' I realised that even after more than a decade spent, not just cutting through it but in some cases devising it, there's a risk that I have become as confused by the topic as I hope you are. Worse still - I promised to outline ways in which consumers could decipher the increasing range of green and ethical propositions laid before them, helping you decide what constitutes genuinely sustainable corporate practice as opposed to the green washing that's become all too prevalent. So let me begin with a get-out clause for this audience. If you leave this lecture more confused than when you walked in, the fault is mine, not yours.
I don't think we can dive into this topic without pausing for a very brief history of the so called 'corporate responsibility' movement to explain why it is that so many companies and brands now feel the need to bombard us with green claims and products on a weekly basis. The history is important because it mirrors the political and economic history of western markets over the last 30 to 40 years. We cannot isolate the changing face of business from the seismic political transformation that has occurred or the remobilisation of campaigning organisations, NGO's or what some call 'civil society'. To discuss green business without reference to the changing role of the internet and the explosion of so called social media tools such as Facebook and Twitter would be to leave out one of the most important driving forces in today's business community. And let's not forget the recent global economic breakdown, which I believe has been a positive thing as far as sustainable commerce is concerned even though some commentators wrongly predicted it would herald the death of the green movement, at least for a while. So history and political context matter. But I will keep it brief.
Next I want to try to identify why the consumer has some right to be confused about the credibility or authenticity of green claims made by companies. I will provide some examples of the complicated conundrums that often lead to confusion and consequently rejection by a baffled citizen in too much of a hurry to scrutinize the merits of every green claim. I will offer some guidance on how we might judge the credibility and merit of some of these claims. I will provide a couple of corporate examples to make my point. Some in my view are sublime but I will also dwell on the ridiculous. The best I can hope for is that when you leave this room you may feel encouraged by the growth of the green business sector. You may wish to go and read more about particular companies or brands that form part of your regular shopping basket. Perhaps you will even ring or email their customer services department to push them for answers on their environmental performance. If nothing else I hope that the next time you buy a product or service its environmental credentials will form a bigger part of your decision to buy or reject.
So first to that potted history of corporate responsibility. A proper academic, which as you will soon discover I am not, would probably trace ethical business all the way back to the great Quaker founded companies of the late 19th Century. They might begin with Cadburys and their Bourneville village. I don't have the time today to do that but suffice to say that the notion that a business must do more than simply please its direct customers and investors by turning a profit, but provide a net overall benefit to society and the environment, is a very old one. A company like Boots was at the forefront of social welfare for its employees, women's rights and more efficient use of transport, many decades before Al Gore was allegedly inventing the Internet. But I want to take up the story in the decade of my birth, when scrutiny of the impact of business on the planet and its people started to increase. These early manifestations of the ethical business agenda were relatively straightforward. Large multi-nationals found to be engaging in poor human rights or environmental practices found themselves facing a rising tide of negative media coverage and activist hostility. The best-known examples are perhaps the criticisms of Nestlé's marketing of baby milk formula in Africa and the appalling social and environmental record of the United Fruit Company, which later became Chiquita bananas. This was a company so bad that books were written about the poor labour standards and ecological havoc on its plantations in Central America. It was for years the iconic pariah of the NGO movement. It's a useful example for this lecture because today Chiquita is one of the most admired champions of sustainable development you will find anywhere in the business world. The 1980's saw continued pressure on companies. Barclays was attacked for continuing to trade with the apartheid regime in South Africa. Clothing companies started exporting more of their labour to developing countries as the world economy globalised. It didn't take long for appalling child labour to be uncovered in dirty, squalid factory outlets hidden down the dusty lanes of remote South East Asian towns and villages. The 1980's also saw a concerted global effort to mend a major environmental problem that scientists warned was getting out of control. This was of course the famous hole in the ozone layer. Perhaps surprisingly, given the political hue and rapid capitalist boom of that decade, the world did act, through the Montreal protocol, and in outlawing CFC's the problem was to a large degree stopped in its tracks. Then in 1989 something huge happened. The Exxon Valdez oil tanker sprung a leak off the coast of Alaska causing what many would still argue was the world's worst ecological disaster. The scale of the tragedy and the altogether misguided tone of the culprit set the stage for a new global effort to create a more sustainable and equitable contract between governments, the business community, and citizens. And so the world came together in 1992 at the Rio Earth summit. The first global conference on sustainable development, a term coined by the Bruntland Commission, and defined as being our ability to meet our present needs without compromising the ability of future generations to meet their own needs. Rio took place in a country where rainforest destruction was becoming an unfolding calamity. Some of you may remember the days of Sting bringing Amazonian tribes people onto the Terry Wogan show to highlight the plight of their back garden. Tragically, the destruction of the Amazon is as topical tonight as it was then.
Looking back, Rio's concrete achievements were relatively modest. But Rio gave birth to the global corporate responsibility industry and it is worth understanding just how huge an industry it is. Throughout the 1990's there was an explosion of new organisations and initiatives designed to tackle different pieces of the environmental and ethical business jigsaw. Many of them were based on the idea that partnerships between NGO's, business and government could be more effective than any individual sector could be alone. From sector specific initiatives such as the Equator Principles for more sustainable project finance, to commodity driven programmes like the Forest Stewardship Council for sustainable timber, and programmes designed to lay down codes of practice for responsible business, such as the UN Global Compact, an entirely new sector emerged to facilitate the discussion between business and consumers. There were think tanks, University departments, new publications, ratings indices, charitable foundations, ethical brands, consultancies, all set up specifically to cash in on a new form of currency - sustainability. You could call the 1990's a green rush but just like the dot.com boom of the same era it did stall. In the early part of this decade, the green business movement struggled to live up to its rhetoric, and of course there was an economic downturn at the turn of the century, which, although small by today's standards, didn't help. There were moments of progress but it was really just three or four years ago that green business shot back up the agenda, but to a much higher summit than it had ever scaled before. Among the factors in play this time were the G8 Summit at Gleneagles at which the Tony Blair Presidency made Africa and climate change the key priorities - and a film by a man who arguably should have been representing his country at that summit, called An Inconvenient Truth. 2005 changed the business world for good - in a very literal sense. It was the year that Wal-Mart, another pariah, decided to change direction in favour of sustainability. The cascade affect of that alone has been enormous because there are very few companies in the world that don't supply Wal-Mart with something and Wal-Mart is insisting that its suppliers meet ever higher green standards. These standards span energy efficiency, packaging, waste, transport, water, and responsible sourcing throughout the supply chain. Thousands of companies, large and small, are now embedding greener practices into their operations. Not least because it saves them a lot of money. Even here in the City of London a quiet revolution is underway - and now too increasingly in the United States, even China and the Middle East. The investor community is interested in the environmental performance of business - not because the City has suddenly become all green and altruistic. But because businesses that aren't managing their environmental performance, and most importantly, risks, are no longer seen as particularly attractive investment propositions. And on top of that, the fact that a company's greenness or otherwise can be found on the internet in just one or two clicks, makes companies more aware than ever of the risks of their brand being tarnished by consumer boycotts and NGO campaigns. So today, sustainable business as a concept has firmly arrived; even if in practice its track record is still patchy. That's enough history, even though it is far from complete. But it is important because it explains where we are today and why there are so many green and ethical choices for us to make the minute we log on to our computers or walk into a shop. So let's now turn to the apparent agony of all those choices.
I don't think the environment movement could ever be accused of depriving the consumer of choice. Here is a selection, and it really is just a selection, of some of the environmental so-called 'eco' labels that you might find whilst walking round the supermarket. And unless you've been lying down in a dark room for the last couple of years you must have noticed there's been rather a lot of green advertising around. It seems almost perverse that people complain that there's not enough information available about the green qualities of the products they buy when so many companies are falling over each other to promote their eco credentials. Consumer-facing green claims can take many different forms. Some are quasi-governmental in that the government or one of its agencies has set some kind of framework with which the product complies. Some represent what we might call internalised or 'self-certified' initiatives, where a company has devised its own environmental management system for its products and services and chooses to communicate that to the public. Some claims are made on the basis of the company working in partnership with an outside organisation to validate their approach. More often than not this involves the company making a donation to the partner group such as an environmental charity. There are associations or 'roundtable' initiatives, where a number of companies in the same sector get together to try to create higher standards for their industry as a whole. Some green claims simply advertise improvements a company has made or is making. Sometimes claims will be made for just one or two products within a company's portfolio. On other occasions businesses choose to promote the holistic environmental performance of their entire operation across all products. And then there are a handful of credible independent non-profit organisations that set standards for particular products, which are then independently audited or certified to see whether the standards have been met. I could spend a whole lecture series just on these independent certification systems but it would be as boring for you as for me, so to be brief these organisations include the MSC for certified sustainable seafood, the FSC for wood and paper, the Rainforest Alliance for products like coffee, tea and cocoa and of course systems like organic certification. There is much discussion about the credibility and real ground level progress made by these programmes and there is not enough time to explore that debate in detail but characteristics of an independent label include some key features. First - that there has been wide and thorough consultation on where the bar should be set and what criteria must be met in order to achieve the certification or stamp of approval. Second, any auditing must be undertaken at arms length with no prospect of the farm, fishery, company or forest in question being able to influence its outcome. Third - there must be full transparency in the result of the certification review and people must have the right to object to a positive result. Fourth, there must be very strict requirements on how any label such as a Rainforest Alliance logo is used, for example on product packaging. Fifth, products that meet the required criteria must throughout the supply chain be clearly segregated from products that don't. For example a seafood processing company may receive different sources of cod, which it then turns into fish fingers or fish pies. If only some of that seafood is from an MSC approved fishery, there must be no risk of mixing it up with non-certified fish in the factory leading to an incorrect use of the MSC logo on a product containing unsustainable catch. And sixth, there must be regular re-inspections to make sure the requirements of certification and agreed improvements are being met. The potential loss of certification must be a constant incentive to anyone marketing their product as green or ethical.
Having worked closely with a number of these certification and labelling programmes, I can tell you that the amount of work that goes into creating truly stringent, rigorous, science-based and therefore credible consumer propositions is unrivalled by any other green claims system. But that does not mean that from time to time a fishery, forest, tea plantation or farm will not be certified amid criticism from one or more interest group. My advice to any consumer wanting to know that the eco label they are choosing is credible is to check if the organisation in question is a member of something called the ISEAL Alliance. This Alliance is, if you like, the trade body that represents the world's most credible independent global standard setters. That is probably why it still only has 10 full members. But all those members meet rigorous standards that guarantee about as much credibility as you could ever have. Annoyingly, this does not mean in any sense that all products without one of these certifications are green disaster zones. There are many products for which no credible certification label exists. There are others that probably meet the required standards but have chosen not to be audited against them. And there are some companies who believe that the trust consumers have in their own brand in terms of ethics and greenness mean that they don't need anyone else's label to prove they are doing the right thing. But even if you become an expert on labels there are still difficult choices to be made. If you want to eat mass-market sustainable seafood, like fish fingers, in Britain, the chances are it will come from Alaska, New Zealand or some other far-flung place. Is it better to buy local roses or import them from Kenya where they generate jobs for low-income farmers? Is the carbon footprint of importing Kenyan roses grown without artificial heat lower than transporting them from nearby Holland where energy intensive greenhouses have been used? In fact, the Kenyan choice is probably greener on a number of levels. There are so many trade offs in the quest for more sustainable consumption. Take bio-fuels. A decade ago it became fashionable to trumpet bio fuel as a major part of the solution to slowing down climate change. The Brazilians were rather pleased to hear that and fixed their eyes on a potentially lucrative European and American market for sugar based bio fuels grown in Brazil. Brazilian ethanol had the relative advantage that the sugar would be grown primarily on land that had already been deforested and degraded. It seemed something of a no brainer. Two years ago when commodity prices rocketed and food costs shot up bio fuels were declared by one UN official as a crime against humanity, replacing land used for food to grow fuel. The American sugar industry, a famously powerful lobby group, wasn't that keen on helping Brazilian sugar farms either and in its usual fashion the US government promptly slapped a massive import tariff onto Brazilian sugar to close down that market place. Meanwhile the perversely subsidised American sugar industry was able to carry on clearing the Florida Everglades to grow their own sugar cane there. So bio fuels have moved from being panacea to pariah in 10 short years. The same issue occurred with carbon offsetting. It moved from being a fantastic way of helping consumers understand their carbon footprint and doing something to mitigate it. Now some environmentalists think that carbon offsetting is the equivalent of paying the RSPCA so that you can kick your dog. A current debate centres on electric cars. Nearly every major car manufacturer including old giants like General Motors is embracing new technology in the race for the electrification of the global transport system. Now some environmentalists are objecting to electric cars on the basis that the electricity used to charge them up in your garage will either come from dirty coal fired power or nuclear energy. As you know, green activists don't much like either of those. There are cars that travel more efficiently on long haul motorway journeys than the Toyota Prius, even though they use conventional combustion engines. Part of our confusion about how to judge green credentials in this endless maze of choices is that often the experts do not agree, the scientists are divided on the most effective solutions, governments are paralysed between competing interest groups and plain incompetence and there is a very real risk that the only thing to get switched off is consumer interest in doing anything at all about our planetary emergency. The only way at the end of the day to resolve these questions is to look at the full life cycle analysis of a particular product - an arduous task and a field that remains very much in its infancy. It is incumbent on business and the environmental movement to provide much clearer information on the whole footprint of a product, from its creation to its disposal, if the consumer is to be armed with the necessary information to make better informed green decisions.
Another potential area of confusion lies in the perception that big business must be bad business. Looking at an image of an oil spill or pollution from a factory chimney this is not unreasonable, but it is often more complex than that. Take an icon for global big business, McDonalds. Some of the imagery McDonalds brings to mind would not seem to put it into the category of green leader. Unhealthy fast food, burger-flipping McJobs, animal fat to fry chips in vegetarian cultures, the McLibel trial, and so on. Interesting then that more and more environmentalists agree that there are very few companies in the world that have done as much as McDonalds on the green agenda in the last few years. The company has systematically embraced a number of radical changes and in doing so has applied pressure on others to follow suit. Its milk here is organic. Its coffee is Rainforest Alliance certified from farms that treat workers fairly and manage agriculture in harmony with nature. All its meat is traceable. The seafood in the fillet-o-fish is from sustainable sources approved by MSC. The company is in a constant dialogue with environmental organisations about its performance. And when the company gets attacked, it has the foresight, the leadership structure and the intelligence to act swiftly. When it emerged that McDonalds was indirectly fuelling rainforest destruction in the Amazon because of the need for soy to feed its meat supply chain, Greenpeace stung them hard and in a very public way. But no-one applauded McDonalds more loudly than Greenpeace when the company made the decision to stop sourcing soy from the Amazon and corralled its big agri business suppliers in Brazil to sign up to a Moratorium on any further forest clearance for soy production. The moratorium is still in force today. McDonalds, and I really should say at this point they are not a client of mine, has used tray menus, in store signage, advertising and its website to communicate effectively on its social and environmental performance. Meanwhile, an institution that is tiny in comparison and offers a far healthier and more glamorous menu than McDonalds, happily continues to serves its celebrity customers blue-fin tuna, a species as near to extinction as the White Rhinoceros. That institution is Robert De Niro's Nobu restaurant in Mayfair. The bizarre truth about today's world is if you want to eat a piece of sustainable fish, you're better off rushing to McDonalds than booking a table at swanky places like Nobu. But at least Nobu's menu advises customers that what they're eating is in danger of extinction. I'd love to meet someone who read that and ordered the dish anyway - but apparently such people do actually exist. I wish they were the endangered species.
The point about big business is that we cannot possibly make the changes to our ecological economy that are urgently needed without this kind of multi-national scale transformation. Rio Tinto led efforts to create new social and environmental standards for mining in the 1990's. It was Unilever that led the sustainable seafood movement and made it mainstream. It is Wal-Mart that will only sell MSC approved seafood in the future. It was Chiquita, you will recall, that iconic example of bad practice, that pioneered standards for environmental and social excellence on its farms. You won't find a fruit company that has done more on greening up their plantations in the past 15 years. In every sector of commerce - from banking to manufacturing, energy to food, media to insurance and forestry to transport, you'll find a cluster of businesses embracing our planetary challenge with much greater urgency than their laggard rivals. To find out who these businesses are there are a number of questions to ask and places to look.
Firstly, how are they communicating their progress on these issues? When you visit their website are you quickly led to a comprehensive section on their approach to the environment? Do they provide detailed information or just bland grand policy statements? Do they tell you their carbon footprint and have figures for the past three years to show reductions? Are they working with any respected charitable groups? And is there evidence of a real partnership rather than simply handing over chunks of money? Do they produce an annual sustainability report and is it independently audited? Are they interested in dialogue with their stakeholders or are they simply in monologue mode boasting about their greenness? Are they authentic, transparent and honest about areas that need improvement? Do they explain the challenges they face in changing decades of unsustainable behaviour? Do they appear on any of the international indices that rank companies according to environmental performance? Are their communications humble or do they over claim? To what extent are they embedding responsibility and weaving it into the core DNA of their entire business model? Or do they simply have a couple of token green initiatives or products? If you ask them a question do they respond adequately? Is there any evidence that the Chief Executive and Board of the company are actively championing greener business practice? In short, is environmental business a state of mind, or just a bolt on case of hopping on the bandwagon?
Now all this begs the next question. An oil company may be doing as much or indeed everything it can to reduce its environmental impact. But it's still an oil company. A paper company may be sourcing more sustainably from well-managed forests but surely the point of a business is to keep growing and therefore it will need more and more paper to meet its commercial needs? An airline may find greener planes that travel further and more quietly on cleaner fuel but they are still belching greenhouse gases into the atmosphere. Sometimes it is hard to see how the global business community will achieve the 80 per cent cut in carbon emissions the scientists say we must achieve to even vaguely stabilise our climate. And I am talking primarily about western businesses. I don't have time to even get into India, China, Russia or Brazil. But despite the daunting challenges that lie ahead, real progress is being made across all sectors - creating products that don't cost the earth, quite literally.
But there will always be nonsense. Virgin Money's 'climate change' ISA, which invests in the oil and defence industries, simply filtering out the VERY worst companies. Tesco's rapidly withdrawn incentive for low energy light bulb purchases, offering air miles in exchange for light bulbs sold, ludicrously promoted as turning 'lights into flights'. This advert in the Economist placed by the Malaysian Palm Oil Council describing Palm Oil as the 'green answer' when South East Asia's last remaining primary forests are being trashed at a rate of knots to grow more oil palm trees. Fortunately, the Advertising Standards Authority swiftly banned that particular advert. Where there are green consumers to play for, there will always be greenwash. But there are many examples of good green communications as well. And this is the true green revolution. The best eco-promotion by business is honest and based on progress already delivered. When I am advising companies on how to communicate on green issues, I always try to encourage adherence to the following key principles.
First, companies should check that the environmental movement is as impressed by their green initiative as they are. They should spend a lot of time listening to what the key barometers of opinion, like environmental NGOs, expect of their business, and adjust their practices accordingly. It'll improve the quality of what they're trying to do, as well as giving them some much-needed independent endorsement when they go public. As the consumer - you should look out for that independent endorsement - it usually says a lot. Its absence says even more.
Second, companies should NEVER over-claim. If it's a small step towards a bigger goal, the business should say just that - there shouldn't be any doubt. A company should check that one part of its business isn't in major conflict with the good work they are advertising. Not much point in a chemical company handing out malaria nets in Africa if it is routinely dumping toxic waste in another part of the world. Ask yourself - do the claims stack up and is the company addressing its core impacts?
Thirdly, companies shouldn't be one-hit wonders. One green campaign will have little lasting influence on reputation if it shrivels away, dies in a drawer and has nothing to follow it. Building green credentials can take years, and the best companies become ever bolder in their goals, and louder in their communications. Marks & Spencer is a good current example of this.
Fourth, authenticity is a must. There's nothing that raises eyebrows more in this cynical sustainability world than a corporate affairs PR suit with green 'talking points' in his back pocket. Companies should tell it like it is, not how they think people want to hear it. There's nothing so refreshing as a transparent, accessible, honest business leader. Authenticity is the key to being allowed to disagree with campaign groups, but the license to operate has to be earned. If Michael O'Leary of Ryan Air were on the side of the green groups, what a formidable advocate he would be. Unfortunately, he isn't.
Lastly, digital communications provide a much easier way for you to find out about green business practice, and separate the revolutionaries from the green washers. Communications have moved online. Social media is the new glue that binds communities of interest and common purpose together. Campaigners are already using it effectively; companies are just starting to. Advertising spend and press releases are becoming less and less effective as the role of online search takes stories directly to individuals at the touch of a button. It's very cost effective, too, allowing businesses to spend more money actually improving their green credentials instead of shouting about them. By using the Internet, and more specifically checking what groups on the likes of Twitter, MySpace, Facebook and out there on the blogs are saying, at the simple touch of a button you will quickly discover the prevailing view on the greenness or otherwise of the brand you are interested in. Just two or three clicks of the mouse and you can usually find out how accurate the corporate spin is.
I often say to companies that green marketing without designing the politics in advance is like walking into a gas factory whilst toying with a cigarette lighter. You may pull it off, but your chances are low. Get it right, and the rewards for a 21st century business are huge. Today's trading environment is tough. But it's also an opportunity. If I were a betting man, I'd put a lot of money on the fact people will be talking about sustainability a lot more in the next 5 years. The opportunities for success have never been greater. The cost of failure never clearer. Communications and marketing are the most powerful tools we have to achieve great things and change business. Used wisely and honestly, PR, advertising, online communications and every other marketing channel have a legitimate place at the green business table.
I hope that today I have helped promote the worth of being at that table, and that you agree that the best green claims are worth supporting with your wallet when you are shopping. And even if I've failed in cutting through ALL the corporate spin, I have perhaps offered you a pair of scissors that may help you do so more often in the future. Without business, government and campaigners continuing to promote the rise of green product messaging, we have little hope of engaging consumers in the fight to save the earth. But without you, me and everyone else asking companies the right questions, time and time again, there will be little pressure on any of them to raise the green bar higher and higher. An executive from a major supermarket once told me that it only takes 10 calls about a green issue to its customer services line for that issue to be 'elevated' to being a major concern. Because those 10 calls represent a far wider public interest, since most people don't bother to pick up the phone or send that e-mail.
I think we're approaching a period in history in which if we don't stop, pause, enquire and think about these choices before we buy, the legacy we'll bequeath to future generations will be bleak indeed. But if we embrace the credible green products flooding into the marketplace, the rewards of doing so will be rich indeed and widely shared - with the farmer who grew the product, the company that marketed it, the campaigner who stood up for change, the shareholder who made a profit, and the consumer who slept with a clear conscience. That's the 21stcentury green revolution we need, and it's already happening all around us. With your help, it will continue to gather pace, making the rise of credible green business practice unstoppable and banishing green-wash to the dustbin, never to be recycled. Thank you.
© Brendan May, 4 November 2009
This event was on Wed, 04 Nov 2009
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