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Companies may find 'green' claims challenged

The era when green marketing meant sunny logos and big environmental claims is over. Just ask BP.
Image: Greenpeace Close BP Petrol Stations In Oil Spill Protests
A Greenpeace activist stands outside a closed BP petrol station in London. Greenpeace says it has shut down numerous filling stations across the capital to protest against the company’s energy policies.Peter Macdiarmid / Getty Images
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When sweet, red crude began sticking to the marsh grass in coastal Louisiana in May, it was the end of an era for many people, including shrimpers, fishermen and a huge swath of the Gulf Coast tourism industry. But it was also, at least symbolically, the end of an era for the marketing world.

For more than a decade, BP had flooded the media with advertisements showing solar panels, windmills and waving fields of grass without a drop of oil in sight. It changed its name, KFC-style, from British Petroleum to BP to de-emphasize its claim to fame: hydrocarbons. The company adopted a stylized green sun as its logo and rolled out the slogan "Beyond Petroleum."

But when the company's Deepwater Horizon offshore well began blowing tens of thousands of barrels of crude into the Gulf of Mexico each day, no outlay of advertising dollars could change the cold, hard facts: The company that had cultivated the greenest image in the oil industry still derived more than 99 percent of its revenues from gas and petroleum. For consumers who had been fed the image of the company out tending windmills, the revelation was almost as shocking as the images of oil-soaked pelicans.

The BP blowout was the swan song of an old style of green marketing, one in which companies could make green claims and hope that no one would look over their shoulders. In the last five years, a new type of green marketing has taken hold, and it has high standards.

It's no longer enough to say you're green in your advertising. It's not even enough to have one or two flagship green products in your line or to screw in a few compact fluorescents and send out a press release. In a time when consumers and watchdogs measure the environmental impact of raw materials and industrial processes, packaging and transportation, a company marketing itself as green needs to have sustainability built into its DNA, or at least painstakingly retrofitted into its culture. But even more important, green products have to be good products.

Research has shown that consumers don't respond simply because something is environmentally friendly. "Being green in and of itself isn't a differentiator except with a small group of consumers," says Joel Makower, executive editor of and author of "Strategies for the Green Economy." "Green succeeds only to the extent that it means better — it's cheaper to buy, it operates better, it lasts longer, it's cooler for my image. People do want to do the right thing, but they don't want to go out of their way to do that. They love 'change' when it's a noun; they hate it when it's a verb."

Strong fundamentals
Back in 2006, Matt Kolb, a real estate agent in Boulder, Colo., had his "change" moment when a client decided to ride around town on a rented bike to look at houses. Kolb lost the client when he went with a private seller he'd met on his bike ride, but the encounter led Kolb to form Pedal to Properties, a real estate firm that offers agent-led bike tours to houses for sale. Last year, after the company became a major player in the Boulder area, Australian entrepreneur Tim Majors approached Kolb and bought half of the company to help franchise the concept around the country. Their green twist of using bicycles is what helps Pedal to Properties stand out in the homogenous, blazer-clad real estate sector, but Majors says it's more the company's overall quality.

"When I bought into the company, I realized we had to be more mainstream to be successful," he says. Majors helped recruit some of the highest-earning agents in the Boulder area and persuaded Terabitz, a market leader in real estate software, to help Pedal to Properties develop a next-generation real estate platform that uses social media. That has helped Pedal to Properties become not only a greener alternative, but also a company with strong fundamentals. It has launched locations in Northampton, Mass., and Sonoma, Calif., with more on the way.

And the bike tours, which are optional, aren't just a green gimmick. Majors says they offer buyers a real advantage. "Biking slows down the buying process and gives clients a feeling for the community. They get to see what it's like to bike to local schools or churches. It's a great differentiation from other real estate firms."

But the company is cautious about calling itself "green," even though it's made strides in becoming paperless by handling massive real estate documents electronically and have pushed the idea to others in the industry.

"I would never say we're absolutely 100 percent green," Majors says. "But we understand the responsibility of a green company, and we're very environmentally conscious."

That's another distinction between old-school green marketing and today's generation of green salespeople — a willingness to reveal exactly what the practices are and a willingness to admit strengths and weaknesses to customers. That's the basis of "radical transparency," a practice in which a company allows consumers to examine its manufacturing processes, warts and all. The outdoor gear and clothing company Patagonia, for example, created a mini site called The Footprint Chronicles in which consumers can track individual products and their carbon footprints from their raw materials to their delivery to store shelves.

"Making a change like that is like turning a gigantic ship — it doesn't happen fast," Makower says. "No company is or likely will be perfect. There's no such thing as a sustainable company yet in the truest sense of the word. We have to accept our green status as imperfect or be paralyzed by imperfection."

Green transparency
In many respects, green transparency is being forced on the corporate world. Sustainability stats are likely to become as common as food nutrition labels when Wal-Mart implements its sustainability index during the next few years. The index will assess the environmental effect of all of the 100,000 products Wal-Mart sells, from Coca-Cola to Black & Decker. That's the type of large, mainstream change that can drive other companies to improve their green bona fides.

Government is getting involved, too. After almost 15 years without a revision, the Federal Trade Commission is updating its guidelines for green claims, creating verifiable definitions for buzzwords such as "sustainable" and "biodegradeable." It's begun calling out greenwashers, too. Last year, the FTC fined four companies for selling bamboo-derived rayon clothing as 100 percent pure bamboo and hit Kmart for improperly marketing paper plates as biodegradable. More states are implementing strict laws to cut down on greenwashing, meaning that green marketing needs to focus on honesty and transparency.

Easy access to information, understandable definitions and a crackdown on greenwashing are essential if green marketing is to overcome its weak link: consumers.

In an Eco Pulse survey conducted this spring by The Shelton Group, a Tennessee-based marketing firm that tries to mainstream green products, 64 percent of participants said they were interested in buying green, especially low-cost, low-risk items such as cleaning products and recycled paper products. But, in practice, green products haven't caught fire; according to the survey, only about 20 percent of respondents said they are "consistently green in their behaviors or purchases." Part of that is because consumers are confused about which companies are truly green. In a 2009 BBMG Conscious Consumer Report, survey participants rated Wal-Mart both the greenest and least green company. All of those green "seals of approval," green bottles and eco-sounding product names make it difficult for consumers to determine which products are the real deal. So, they often simply cut green out of their decision making.

"Twenty-five percent of our respondents said they had no idea how to decide if a product is green," says Lee Ann Head, Shelton's vice president of research. "The vast majority of people still make their decision based on reading labels — but at the same time they don't trust the labels. There's still a sense of buyer beware with green products."

And because consumers don't understand exactly what green means, they often conclude that the green product won't perform as well.

In the service industry, selling yourself as green can be an expensive endeavor, especially if there is no guaranteed payoff. That's why Joey Terrell went it alone when he decided to refresh his Joliet, Ill., Denny's by building a LEED-certified restaurant in 2009. (LEED stands for Leadership in Energy and Environmental Design, an independent certification program run by the U.S. Green Building Council.)

Denny's gave him permission to build the green restaurant as long as it cost about the same as a regular store, he says. The project turned into a marketing boon itself as Terrell's Denny's raced a nearby McDonald's to become the first green-certified restaurant in the country.

When it was all said and done, Terrell says, he came in $40,000 under budget and is saving about $20,000 a year in energy and water conservation. Plus, he's benefiting from a marketing boost. "We're seeing double-digit sales increases over last year. It's a surprise for us, we weren't anticipating that. People generally come into the restaurant and tell us it's because it's green," says Terrell, who is planning to turn his Mokena, Ill., Denny's green, too.

"People tell us they love eating in the restaurant but can't pinpoint why," he says. "Maybe it's because the air is fresh with reduced contaminants, and the skylights make it feel like you're eating in a meadow."

Beyond marketing
In many ways, green marketing has transcended marketing. To market itself as green, a company has to do the often difficult work of actually being green, not simply flashing pictures of windmills.

But unlike the first generation of green marketing, which imploded when the expensive products failed to live up to customer expectations, today the momentum is so strong, and the benefits often so compelling, that companies aren't likely to abandon their green efforts. In fact, much of the most successful environmental advances have happened under the radar as companies have squeezed waste and inefficiency from their manufacturing processes and reduced packaging. For instance, the aluminum can is a third lighter than it was 20 years ago, a remarkable green achievement that doesn't show up in Budweiser advertisements.

Green marketing eventually will fade away, and if innovation continues at the current pace, that will be sooner rather than later. Not because green marketing is ineffective but because green is becoming the status quo. When all cleaning products are nontoxic, when every appliance is an energy sipper, when all toaster ovens are 100 percent recyclable, green will cease to be a factor. Until then, marketers need to plug their green achievements without making that their only notable selling point.

"Green is no longer a trend, it's inextricably linked to how companies do business, design, use and dispose of products," Makower says. "In 10 years, you won't be able to sell a car without electric assist. Green will be part of the fabric. It's those other differentiators, like cost and performance, that will still be important."

Jason Daley is a freelance writer based in Madison, Wis.