Student name: Muhammad Haider Student Id: S00149109 Word Count: 1437.

Assignment 1

Green Washing

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Student name: Muhammad Haider Student Id: S00149109

GREEN WASHING
In United States where climate change legislation, concerns about foreign oil dependence, and mandatory curbside recycling are becoming the new normal, companies across a variety of sectors are seeing the benefit of promoting their greenness in advertisements. Many lay vague and dubious claims to environmental stewardship. (Dahl, 2010) Others are more specific but still raise questions about what their claims really mean. The term for ads and labels that promise more environmental benefit than they deliver is green washing. Today, some critics are asking whether the impact of green washing can go beyond a breach of marketing ethics. Green washing is not a recent phenomenon; since the mid-1980s the term has gained broad recognition and acceptance to describe the practice of making unwarranted or overblown claims of sustainability or environmental friendliness in an attempt to gain market share. Although green washing has been around for many years, its use has escalated sharply in recent years as companies have strived to meet escalating consumer demand for greener products and services. There are many forms of green washing. Some are listed below.

1. Hidden trade-offs: The most common form of green washing accounts for 57 percent of cases. It occurs when a company makes a positive environmental claim about a product, but fails to mention larger negative factors. 2. Lack of proof Accounting: For about 26 percent of cases, this type of green washing happens when a company makes environmental claims that can't be easily verified with data or through a third party. 3. Vague claims: This type of green washing accounts for 11 percent of examined cases and occurs when companies make environmental claims that are too vague or broad to be understood by consumers. Pages 2 of 6

Student name: Muhammad Haider Student Id: S00149109 4. Irrelevant claims: Coming in at a narrower four percent of examined cases, this type of green washing occurs when companies make claims that might sound good on the surface but are ultimately pointless. 5. The lesser of two evils: Accounting for an estimated one percent of cases, this type of green washing involves claims that are not only irrelevant but have questionable ecological significance to begin with. 6. Outright lies: This category, accounting for less than one percent of reported cases, involves companies that make false claims about a product or falsely cite green certifications. Now that we know how companies green wash, we'll find out why they do it and what green washing costs consumers, businesses and the environment.

So why is green washing a problem? Talking the example of environment, Green washing at its peak can encourage consumers to do opposite of what is good for environment. Obviously, it is ethically questionable to deceive consumers when marketing a product or service. Businesses should be held accountable to an informed citizenry. However, there is more to it than that. Consumers who try to make ethical purchases only to discover that they have been duped may become cynical and feel their efforts were futile. It may cause people to stop aiming for environmental responsibility and settle for complacency if they feel they cannot make a difference. Furthermore, companies that are truly progressive may be considered together with others that are trying to capitalize on the green trend and may not thrive as they should. In fact, many businesses are finding that becoming more environmentally responsible actually does lower costs and increase profits, while businesses accused of green washing often see a fall in profits, so the gamble is not worth the risk. In 2007 Virgin Blue claimed to be Australias first green airline when it invited travelers to contribute to a greener world by paying to balance the radiations caused by their flights. However there are no accepted standards for what counts as an offset and claimed that offsets are often not independently audited. Planting trees as offsets is on the whole challenging. How many trees represent a ton of carbon dioxide emissions? What happens if the trees burn down in a forest fire and the stored carbon goes up in smoke? What happens to the carbon when the trees get old and die or are logged? Pages 3 of 6

Student name: Muhammad Haider Student Id: S00149109 One major result of green washing is public confusion. People are not sure what they buy. They just go after what is presented to them. Although the upright number of green labels can make it hard to accept claims, not all Eco labeling is green wash. Green Washing is an attempt to gainmarket share by misleading the public by the companies stating that their products as well as the companys aim and polices is environmentally friendly or green. This concept of being environmentally friendly and green products is the main issue for todays businesses because people are gaining awareness and they expect from corporate organizations to be socially responsible. To gain the trust of consumers the organizations initiate few policies and awareness programs so that their consumers are satisfied. In these ways consumers are misled. For example if we consider food chains and food products, recent years have witnessed increasing demand from consumer for products that bear ethical or values-based advertising claims, such as organic, local, and fair trade (Braham, 2002, Conner et al., 2008 and Reynolds, 2009). The organic claimindicates that foods were produced in adherence with certain environmental quality standards that have been established by the US Department of Agriculture. (Jonathan and Mary. 2012) Consumers will go after these products thinking that whatever is being claimed is true but the fact of green washing remains hidden. The use of green washing has dramatically increased with in the year as the companies strain to meet the consumer demands for greener products and services, according to advertising consultancy Terra choice Environmental Marketing, organizations spend billions of dollars each year in an attempt to convince consumers that there operations have minimum impact on the environment and that their products are as environment friendly as they should be. Large, small all sorts of organizations are putting handsome amount of money focusing on social responsibility and environmental issues. A recent impression is that the website of fortune 500 companies has devoted their attention towards sustainability proving that the way of thinking in business streams have taken a new turn (Martin and Kyle. 2012). Spotting some signs of green washing: Soft language Green product vs. other company Irrelevant claims Just not credible No proof Out-right lying. Student name: Muhammad Haider

Student Id: S00149109 Now if we move towards the growth of green washing we see following reasons: The demand for more environmentally responsible products by consumers. An increase in the sale of environmentally oriented products. Pending government action. Strong demand disregards the economic downturn.

Government agencies and non-governmental organizations investigated and combated green washing activity, the focus was on the existing flow of misleading information by companies directed to individual consumers. Indeed, for many years almost every instances of green washing involved business-to-consumer (B-to-C) scenarios. But time has changed now. Concern about climate change has settled into the public awareness, and the environmental movement has produced an important outgrowth, on occasion called the clean tech revolution Where there is a will there is a way. We can just stop green washing. There is a need to follow just simple steps. First you should know how to identify the original manufacturer vs. reseller. Secondly be cautious of hidden trade-offs of products such as Energy-efficient electronics. You should be aware of the Lesser of Two Evils found in contradictory product combinations. As far as my opinion is concerned I am against green washing, because it is against business ethics and it is illegal to deceive a consumer. It is always considered a sin to do so. The market for green products is expected to grow in the future driven by the generation of young Americans 18 to 34 years old who believe that man has a direct effect on climate changes.25 As the market for green products continues to grow, more and more companies are producing and marketing green products. As a result, the number of false or unsubstantiated claims has been increasing. This is partly due to confusion about what is green, the authenticity of certification agencies, misuse of certifications, and lack of involvement by regulatory bodies. As more and more consumers want to make environmentally friendly purchases, businesses are responding by implementing environmental standards. These environmental standards can help businesses compete in the market by increasing market share, price premiums, public goodwill, and visibility. But the environmental claims companies make must be truthful, honest, and transparent in order to keep the trust of consumers and comply with the policies of the Federal Trade Commission. Pages 5of 6

Student name: Muhammad Haider Student Id: S00149109

References: 1. Richard Dahl,2010 June. Green washing- do you know what you are buying? retrieved on 02 April 2014 from: http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2898878/ 2. Davis, J. (1992). Ethics and Environmental Marketing. Journal ofBusiness Ethics, 11:2, pp. 81-87. http://www.businessethics.ca/greenwashing/. 3. Eric L. Lane, 2013 September Green washing 2.0 Columbia Journal of Environmental Law. 4. http://www.columbiaenvironmentallaw.org/articles/greenwashing-2-0 5. Sharon Beder, Drowning in Greenwash, alive Australia, Spring 2009, pp. 5861.http://www.uow.edu.au/~sharonb/greenwash2.html

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