Guest post: Software to Mitigate Risk of Carbon Greenwashing

Hunter Richards, Accounting Market Analyst
Accounting Market Analyst Hunter Richards writes about accounting software, with particular interests in "green" innovations and compliance.

With the FTC becoming increasingly serious about enforcing its Green marketing regulations, many companies are looking for ways to ensure that their campaigns remain compliant.

As always in Green marketing, transparency is paramount.  And having solid proof of environmental performance is an excellent way to remain transparent.

While carbon emissions are not the only factor in establishing a company’s environmental footprint, they definitely are a major one, and one currently given heavy emphasis in the media.  In today’s guest post,  expert market analyst Hunter Richards discusses the role of Enterprise Carbon Accounting software in mitigating risk of greenwashing in this area – and five action categories necessary to eliminate it altogether.

ECA Software and Carbon Accounting: The New Threats to Greenwashers

Greenwash (verb, \ˈgrēn-wȯsh\) – to market a product or service by promoting a deceptive or misleading perception of environmental responsibility.

Companies are launching major ad campaigns to show off their eco-friendly products and services, but many of these claims are questionable. Greenwashing is threatenening the credibility of legitimate environmental marketing and turning would-be green consumers away from the hype. So how can we know who’s telling the truth about supposedly green products and who’s just greenwashing? We can increase transparency and put an end to greenwashing through standardized adoption of carbon accounting by these businesses. A new kind of software is also a key part of the solution.

The increasing scrutiny of green business campaigns is similar to the demand for transparent financial reporting, especially in the wake of the recent financial crisis. The U.S. is still a leader in financial accounting, but we need to develop the same infrastructure for environmental accounting to restore credibility. Enterprise Carbon Accounting (ECA) software is becoming the foundation of this infrastructure, and the market is growing. ECA software enables companies to track their carbon emissions footprint and more easily find existing opportunities to lower their costs and reduce waste. It’s strengthening the potential for corporate environmental transparency. When the transition fully takes hold, greenwashers could disappear entirely.

For ECA software and environmental accounting adoption to make greenwashing obsolete, we need action in five main categories:

  • Clear government action on regulations;
  • Adoption of carbon accounting principles;
  • Expansion of Scope 3 emissions accounting;
  • Better green business incentives; and
  • Demanding, informed consumers.

Clear Government Action on Regulations

lncreased coverage of existing new policies and decisive action on new legislation could quickly spread carbon accounting and the use of ECA software. The EPA’s Mandatory Greenhouse Gas Reporting Rule, which requires companies that emit 25,000 metric tons or more of greenhouse gases annually to disclose emissions to the EPA, could be expanded to include smaller businesses as well. Decisive action on new legislation in the future could also help dramatically in expanding ECA software adoption and ending greenwashing.

Adoption of Carbon Accounting Principles

Stricter requirements for disclosure of standardized corporate emissions information, now more feasible than before with the adoption of ECA software, would provide a precise way to examine a company’s environmental record. When such a measure exists and becomes widely used, one will only need to refer to these numbers to get an impression of a company’s overall environmental performance. It will be a lot more difficult to conceal adverse impacts on the environment in implementing greenwashing campaigns.

Expansion of Scope 3 Emissions Accounting

Mandatory inclusion of suppliers’ emissions and other indirect emissions sources in company environmental reports (Scope 3) would prevent under-reporting of emissions; absolutely all emissions would be measured and reported without room for loopholes. Requiring Scope 3 measurement would also spread more adoption of general carbon accounting throughout the supply chain. When a company must account for Scope 3, it must ask its suppliers to track their carbon footprints as well to produce the required report. A chain reaction could quickly increase the number of companies with comprehensive carbon emissions reports and, in doing so, increase overall environmental business transparency.

Better Economic Incentives For Going Green

Using ECA software to identify eco-friendly savings opportunities can make it cheaper to truly go green, making it unneccessary for businesses to greenwash in the first place. Businesses will often find that shrinking their carbon footprints and minimizing costs can go hand-in-hand. Government incentives can also encourage eco-friendly business practices. ECA software could alert users to new opportunities to take advantage of government incentives as more of them emerge, pushing green sincerity into the best interests of businesses.

Demanding, Informed Consumers

Demanding the hard numbers from standardized carbon accounting reports, while boycotting the proven greenwashers, forces businesses with green marketing campaigns to prove their sincerity or risk failure. After all, fully informed consumers make deception by greenwashing impossible. When standardized carbon accounting is required and ECA software is available, companies won’t have any more excuses to conceal their carbon footprint. The remaining work will be done by informed, rational consumers.

This post was adapted from the original article by Hunter Richards, posted 10/25/2010 on the Software Advice blog.

Check out the full article: Software to Hold “Greenwashers” Accountable.

What do YOU think? Have you struggled with carbon compliance and/or Greenwashing issues?  How would Carbon Accounting Software affect your marketing and/or other aspects of your business?  Post your comments below or click the link to the original article and let’s get some discussion going on this important topic!

FTC’s crackdown on Greenwashing – top 4 things Green marketers should know

Last February I wrote a short post about the FTC’s Green Guides – regulatory rules for Green marketing (Are Your Green Claims FTC Compliant?).  At that time common wisdom seemed to be that following the Green Guides, while a very good idea, was still largely a voluntary measure.

However, Greenwashing is a hot topic and one that has a lot of consumers up in arms (for good reason.)  The FTC  has started to enforce these rules seriously – and not only for big companies.  So if you’re not keen on the idea of being hounded by government regulators, it’s time to sit up and pay attention, and make sure you stay in the FTC’s good graces.

Green CSR strategist and Green marketing consultant Perry Goldschein recently posted an excellent article on this topic which I highly recommend reading.  Here’s an excerpt:

Up until recently, green marketing has been somewhat of a “wild west” as a result of increasing consumer interest, a lack of “truth in advertising” claims enforcement, a dearth of definitions or standards around green marketing claims, and an accompanying explosion of “eco-labels” (over 300 and counting).

That’s changing rapidly, as the FTC cracks down on “greenwashing” and soon issues new environmental guidelines. Following the end of a long, eight-year enforcement hiatus, the FTC has filed several greenwashing complaints and sent several dozen warnings to others since 2008. In fact, the FTC now considers prosecuting misleading green marketing claims as one of its seven priority areas for its consumer protection division.

Read the rest of Perry’s article here: “FTC Ending Green Marketing’s “Wild West?” Top 4 Things to Know.

Green Marketing: Are You Selling Your Soul?

 

A few months back I published a post about a market study entitled Green Marketing: What Works; What Doesn’t – A Marketing Study Of Practitioners.  In the study, a significant percentage of marketers who tracked their responses reported an increase in effectiveness when they used Green messaging in their campaigns.

Quite frankly, I wasn’t intending this post to be particularly insightful. I was simply reporting on some interesting research. I thought the results of the study indicated a heartening trend – that Americans are finally concerned enough about sustainability issues that “green” messaging is actually getting through to them.

However, my little article touched off some intense emotional responses.   One man in particular brought up an issue which needs to be addressed, because it touches on the heart not only of responsible marketing but of our very chances of achieving sustainability in our modern world:

Perhaps you should step back and take a look at what you call green marketing… (followed by a lengthy discourse on the environmental consequences of the coal and nuclear plants which power the Internet and make modern commerce possible.)

Green is a self-aggrandizing rationalization that people use to assert that they are living well for the common good of their fellow man and the planet earth. Sorry folks, this posture ended with Plato’s Republic.

He also sent me a scathing private email ending with:

“Do you really believe in what you write? Or, are you selling your soul for the sake of money?”

Wow.  Talk about a soul-searching question.

Here was my response:

Yes, you’re right.

Marketing is not green. The entire military-industrial-corporate society we live in is completely unsustainable. But I think one has to start somewhere. There are companies and organizations out there that are working to change it for the better. I’m privileged to work with some of them.

Whether or not the messages in question were honest and worthwhile, or whether it was all greenwashing, and whether it’s even ethical to use green messaging is beyond the scope of this post – good topics for another day, for sure.

Yes I know the whole issue of marketing and business and how it relates to the environment is a sticky one at best. It’s amazingly complex and there are few if any straight answers. I welcome your thoughts.
Privately, I went on to explain that I choose to work with forward-thinking companies so that I can put my talents to their highest and best use: promoting the shift towards a sustainable world.  Many of my clients are start-ups, nonprofits and small-scale entrepreneurs.  Quite probably I could make substantially more money working with larger, more established companies.  (On the other hand, like everyone else, I do have bills to pay and kids on a collision course with college, so offering my services free is just not realistic no matter how much good it may do the planet!)  I pointed out that the vast majority of Green initiatives he himself champions can only exist if they’re capable of feeding the hands that drive them.
The next email I got from him was much calmer.  “Sorry I came out with my guns ablazing. At the very least, communicating via the internet saves some trees and diesel fuel pollution.”  He ended by inviting me to review a feasibility study for his green business!

The Irony of Marketing Green

To be sure, it’s easy to get downhearted trying to be sustainable in an unsustainable society.  It’s easy to see “green marketing” as an oxymoron when we think about how many resources we’re still consuming even when we try to cut down on our consumption.  But we have to start somewhere.  And despite all the greenwashing, if you look at the change in public consciousness in the past five years alone, you’ll realize that collectively, we are making a difference. Personally, I think business and marketing can exist and thrive within a sustainable society.  In fact, it has to. Just as sustainability in Nature depends on the flow of energy or life, so economic sustainability depends on the flow of profits.  However, achieving such a goal will result in a radically different business climate than we may be used to.  We’re going to have to change from a linear to a circular understanding of the flow of both products and profits.  Which for many of us will require a radical shift in our physical, mental and spiritual relationship to and understanding of the world we live in.

And what about selling one’s soul?

Well, you could look at it another way.

Sell, baby, sell

Most entrepreneurs I know pour their heart and soul into their businesses.  If your soul is truly aligned with your purpose in life, and if your life’s purpose is in harmony with the greater universe, then you should sell your soul.  You should promote and sell the heck out of it.  Because the more people begin to buy it, the more value – and harmony – you will bring into the world.

I know scores of people who are burning with purpose and are taking real action to make the world a better place.  They’re running nonprofits, starting businesses which offer sustainable alternatives to conventional products and services, and working with school districts and government agencies.  They’re opening people’s minds and instituting new opportunities and infrastructure that support a sustainable future.

Each one of these people – even if they’re unaware of it – is engaged wholeheartedly and unabashedly in the act of selling.

The trick is to be brutally honest with yourself.  Is your reality truly aligned with your ideals? If not, what can you do to bring them closer together?  And if they are, are you doing it justice with your sales?

Anne Michelsen is a freelance writer who helps Green and renewable energy companies enjoy increased attention and greater sales through dynamic sales copy and insightful content.

Subscribe to Anne’s bi-weekly tips and insights into Green marketing and sales writing, and get a complimentary copy of her Green marketing report, Making Sense of the Green Sector: What Every Marketer Should Know About Selling Sustainable Products and Services.