DON'T BE FOOLED

AMERICA'S TEN WORST GREENWASHERS 1. Ford Motor Company 2. BP 3. United States Forest Service 4. ChevronTexaco 5. General Motors 6. Nuclear Energy Institute 7. Alliance of Automobile Manufacturers 8. TruGreen ChemLawn 9. Xcel Energy 10. National Ski Areas Association

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The complete report in PDF is annotated, and includes images of greenwash ads featured in the report as well as a list of online and print resources related to greenwash.

Introduction and Executive Summary follow below:

INTRODUCTION

“The ads are back,” announced Green Business Network founder Joel Makower in August 2004. He referred to the recent rise in frequency of corporate environmental image advertisements. Aimed at values-based consumers, socially responsible investors and public policy makers, the ads number as many as a half-dozen per issue in National Geographic, The Economist, Atlantic Monthly and other opinion-leading magazines. With lesser but likewise increasing visibility, the marketing blitz has advanced into newspaper and television markets nationwide. Not since the early 1990s – when the green consumerism emerged, and delegates to the United Nations Rio Earth Summit debated ratifying international environmental regulations – have companies so aggressively asserted their green credentials.

In this report we run a background check, investigating whether those credentials should be accepted. On the contrary, we find, they should in most cases be revoked, for rarely do they convey a company’s true identity.

An automaker that produces dozens of models of gas-guzzling SUVs opts to market its lone hybrid as proof of far-reaching environmental responsibility. An energy company uses solar to symbolize its commitment to a post-carbon future, even as all but a sliver of its operations are stuck in oil. And a chemical company touts its donation to a conservation group, made only to silence grassroots gripes about toxic pollution.

Dealing in lies of omission, image ads belong to a business strategy known as greenwash, defined by the Oxford English Dictionary as “disinformation disseminated by an organization so as to present an environmentally responsible public image.”

In addition to image ads, greenwash encompasses misleading product labels such as “all natural,” “biodegradable” and other vague descriptions used entirely at the discretion of the manufacturer, as well as improper applications of terms, for example, “organic” and “free range,” which are meaningful regarding certain products but unreliable with others.

Greenwash also covers a range of public relations tactics: front groups feigning public support for hidden anti-environmental agendas; scientists-for-hire who vouch for industry-funded research; sustainability reports offering partial disclosure and spotty transparency; hollow mission statements and codes of conduct; contributions to innocuous nonprofits; community advisory panels that have access without influence; and sponsorship of Earth Day events, where local industry plays host to the peoplr it poisons.

The incentive for greenwash is obvious. Paraphrasing a Chevron executive who saw sales spike 10 percent during the company’s eco-friendly People Do marketing campaign, greenwash in all its forms serves a single purpose: “it pays.”

The Environmental Business Journal and Nutrition Business Journal report that the market for green goods and services in 2003 was $440 billion, or 4.3 percent of the U.S. economy, and is expanding twice as fast as GDP. Even companies without a share of the “Healthy Products, Healthy Planet” sector can profit from values-based consumers by building a reputation as goodly purveyors of necessary evils, like gasoline and computers.

Socially responsible investments, now totaling $2.16 trillion, grew 40 percent faster than all professionally managed investments between 1995 and 2003, according to the Social Investment Forum. The 2004 Cone Corporate Citizenship Study found that 70 percent of Americans view a company’s commitment to social issues as an important factor in their investment decisions.

Since the early 1990s, U.S. companies, both individually and collectively, have launched more than 200 voluntary environmental programs. In the public policy sphere, companies tout the merits of such programs to render cost-inducing regulations, from local ballot initiatives to federal legislation, superfluous.

Given the growth of the “Healthy Products, “Healthy Planet” sector and of socially responsible investing, along with the popularity of voluntary environmental programs, one might surmise that the concurrent rise of greenwash correlates directly with positive trends. Perhaps, as Gaylord Nelson, former Senator and founder of Earth Day, once said, “If corporations are moving to be green, that’s just fine…. [T]hey’ll just help spread environmental propaganda.”

But, in fact, greenwash has a stifling effect. In the lexicon of classical economics, it creates market distortions. Unless consumers have perfect information about products –not excluding their environmental costs – the market will not reflect their true preferences. Endowed with bigger marketing and public relations budgets, greenwashers shut the door on genuinely green business struggling to get a foothold in the marketplace. A few, notably organic food producers, have broken through, yet most, among them green-building contractors, renewable energy providers and organic apparel retailers, remain on the outside, obscured from potential customers.

By the same token, greenwash makes companies with strong financial performance but weak environmental performance more palatable to socially responsible mutual funds, some of which, as Paul Hawken pointed out in a recent report, take a facile approach to picking stocks. A poll by Investor Relations Magazine found that image ads have persuaded 42 percent of portfolio managers to consider investing in a company. Absent image ads, managers would be forced to dig deeper for companies that do well by doing good.

Bolstered by niche marketing inside the Beltway, voluntarism over the past decade has gained considerable political currency. However, after a trial period, it is apparent that self-regulation is no substitute for government mandates. Researchers studying voluntary environmental programs such as the chemical industry’s Responsible Care and the logging industry’s Sustainable Forestry Initiative have concluded that without concrete standards, independent oversight or the threat of enforcement, companies are not compelled to clean up their practices.

Thus greenwash is not part and parcel of environmental propaganda, boosting awareness of environmental problems in spite of its source. Instead, greenwash is itself an environmental problem, one that will persist, and likely worsen, until it no longer pays.

To flip the economic calculus of greenwash, so that its costs outweigh its benefits, consumers can refuse to buy from companies that they discover are out to fool them – whether through in-depth research or merely by turning the page from the image ads to the news. The same goes for investors, who should understand that companies are not always as they appear on paper. And policy makers must weigh the results of voluntarism more heavily than they do the guarantees of companies to go green of their own accord.

Together, consumers, investors and policy makers can demonstrate the power of accurate environmental information.

Notes on Methodology

As its title implies, this report does not account for all greenwashers, only the worst. The companies profiled herein were selected due to the discrepancies between their environmental rhetoric and the reality of their environmental performance. By these criteria, some environmental laggards did not make the list because, for lack of interest or fear of backlash, they do not bother with greenwash. On the other side of the coin, some leaders were chosen because, though in reality their environmental performance far outpaced that of their competitors, their rhetoric was still more extreme.

To each greenwasher we recommend steps to reconcile rhetoric with reality. The recommendations do not in general represent bold environmental reform, but are typically modest measures designed to convey a company’s true identity.

EXECUTIVE SUMMARY

Greenwash fools progressive consumers into supporting the economy’s unsustainable status quo; lures investors who link positive environmental performance with profitable financial performance; and misleads policy makers charged with designing and enforcing environmental regulations.

America’s Ten Worst Greenwashers are:

1. Ford Motor Company

Greenwashing the Blue Oval

The Greening of the Blue Oval presents the Escape Hybrid and the River Rouge factory as symbols of Ford’s sweeping environmental commitment.

However, set against Ford’s entity-level operations, these two technologies illustrate that the company’s colors are changing merely at the margins. In 2004, for the fifth consecutive year and 20th time in the past 30 years, Ford had the worst fleetwide fuel economy of all major automakers. Hybrids account for approximately one-half of one percent of Ford’s annual sales, or roughly one-quarter the number of F-150s made each month beneath the vegetation-covered roof at River Rouge. Ford plans to steadily expand its lineup of hybrids, yet their impact on the company’s fuel economy will be counteracted by new models of non-hybrid SUVs, such as the Volvo XC90 and Jaguar Z-Type, coming in 2007.

Likewise, Ford’s leaked plans for a voluntary fuel-economy target decades down lacks credibility as the company currently allocates part of its $8 million annual lobbying budget to opposing both state and federal mandates to reduce carbon dioxide emissions.

As long as hybrids are hardly a sliver of Ford fleet and its green factory produces pickup trucks with worst-in-class fuel economy, Ford should cease marketing the Escape Hybrid and River Rouge as environmental emblems.

2. BP

Third Party’s the Charm

BP on the street sparks a conversation between BP and everyday Americans about issues related to energy and the environment.

But the dialogue is disingenuous. By employing the manipulative third-party technique, the campaign artificially aligns BP with the public’s vision of an ideal energy company: one that is progressing “beyond petroleum” to realize the promise of renewables. Oil still comprises the majority of BP’s reserves, while its solar subsidiary, the world’s largest photovoltaic producer when BP acquired it in 1999, was eclipsed by three competitors within four years. Even as solar panels sold by BP in 2003 are expected to save 0.5 million tons of carbon dioxide emissions over their lifetime, the company’s fossil-fuel products emitted 1,298 million tons of carbon dioxide in 2003 alone.

Looking ahead, BP pledges a “precautionary approach” to global warming based on stabilizing atmospheric carbon concentration between 500 to 550 part per million (ppm). Yet that range exceeds the 400 ppm threshold above which the International Climate Change Taskforce believes “the risks to human societies and ecosystems grow significantly.”

Debate about the energy industry and the environment is confused enough without BP conflating corporate and public voices. BP should cease implementing the third-party technique in its marketing.

3. United StatesForest Service

Forests With Flacks

Forests With A Future aims to convince the public that the Forest Service’s revision to the Sierra Nevada Framework is a necessary and cost-effective measure to avoid catastrophic wildfires.

The agency’s argument was compromised when it was revealed in the press to be crafted by a private public relations firm. Along with paid pundits and video news releases, Forests With A Future is part of America’s mounting problem with government propaganda. In 2004, the federal government spent $88 million on contracts with PR firms, up from $39 million in 2000. For $113,000, OneWorld Communications invented the name of Forests With A Future while helping the Forest Service to develop videos, a brochure and other materials. All of the materials disregard key facts about the new Framework, for example, that it will replace a Clinton-era version finalized after ten years of scientific study and public input, and that annual timber removal will increase from 111 million board feet to 330 million board feet.

In explaining complex Forest Service policy to the public, the agency’s bureaucracy should not be bypassed, but abided as a function of democratic government. The Forest Service, like all government agencies, should be transparent about its taxpayer-funded contracts with PR firms, and should eschew them entirely in cases as sensitive as that of the Sierra Nevada Framework.

4. General Motors

All Aboard the Missed Bus

A trio of green-themed advertisements depict GM’s “next generation” of hybrid and hydrogen vehicles.

Vehicle for vehicle, GM today is the auto-industry worst emitter of smog-forming pollutants, and ranks only ahead of Ford in producing heat-trapping emissions. Judging from their maturation to date, the vehicles of the future are either too disappointing or too distant to distinguish themselves from their predecessors: Hybrid Power to the People features gas-electric pickup truck models – of which GM will produce just 2,500 in 2005 – offering a modest 10 percent mileage improvement on their conventional counterparts; similarly, the hybrid transit buses of All Aboard the Magic Bus boost fuel efficiency over non-hybrid models by just 10-20 percent, far short of the advertised 60 percent upgrade that a GM executive acknowledged was overstated; and Who’s Driving the Hydrogen Economy? suggests that children today will drive “cleaner cars,” though hydrogen still may be yielded by fossil fuels decades from now. The trio is backed by GM’s $3 billion advertising budget, the largest in the U.S.

GM should ensure the accuracy of its environmental claims by stating only what it knows to be true. That criterion affects its focus on hydrogen, which should be reduced to avoid creating unrealistic expectations.

5. ChevronTexaco

A Limited Partner

Based around the slogan “Turning partnership into energy,” ChevronTexaco’s marketing campaign describes the company’s environmentally responsible relationships with foreign governments, local transit agencies and fellow fossil-fuel producers.

Under a watered-down definition of partnership, the campaign includes only those cases in which ChevronTexaco gets its way due to government and industry backing: Monitoring Emissions tells of the company’s donation of emissions-monitoring technology to the American Petroleum Institute, a forum not of “competition,” but of collusion to avoid regulation of greenhouse-gas emissions; the bill for the $3 million hydrogen fuel station shown in Hydrogen Economy was split in half between ChevronTexaco and taxpayers – with the company’s share likely amounting to less than the cost of Hydrogen Economy’s publishing run; and on both the import and export ends of ChevronTexaco’s distribution of Australian gas to American markets, as outlined in Meeting Natural Gas Demand, the company’s approval to operate in sensitive ecosystems resulted from basic regulatory process, not enlightened partnership.

Unless a case can be found in which it makes even a small sacrifice for a partner’s sake, ChevronTexaco should abandon the current focus of its campaign.

6. Nuclear Energy Institute

Truth Gone Fission

Nuclear. The Clean Air Energy frames nuclear as the answer to America’s needs for both domestic security and sustainability.

In so doing, it repeats several of the same environmental claims for which the NEI’s previous ad campaigns have been officially denounced as deceptive. Ignoring the censure of the Federal Trade Commission and the National Advertising Division of the Council for Better Business Bureaus, the NEI continues to call nuclear energy “clean” and “emissions-free.” In fact, because fossils fuels are typically required to run the mining and processing operations that transform uranium into fuel rods, nuclear energy over its lifecycle contributes 39.1 grams of greenhouse gas emissions per kilowatt hour. Nuclear energy also produces waste heat, small amounts of smog-forming pollutants and, of course, radioactivity.

Tolerated only by a loophole in truth-in-advertising law that differentiates opinion leaders from consumers, the NEI’s claims to cleanliness should be dropped.

7. Alliance of Automobile Manufacturers

An Emission By Any Other Name

Ultra-Clean Autos informs Beltway decision makers of the dramatic reduction in vehicle emissions achieved by automakers since the 1970s.

Through the integrated marketing and public relations campaign, the AAM both exaggerates the auto industry’s solution to smog-forming emissions and conceals its worsening problem with heat-trapping emissions. Ultra-Clean Autos labels today’s vehicles “virtually emission-free” though it will not be until 2009 that all new cars and trucks comply with the Environmental Protection Agency’s Tier 2 regulations on smog-forming emissions.

Meanwhile, carbon dioxide emissions from U.S. autos are growing each year as automakers have failed to raise fleetwide fuel economy from its level 20 years ago. In 2005, American cars and trucks will emit 1.3 billion tons of carbon dioxide. Since its founding in 1999, the AAM has spent close to $35 million lobbying on behalf of its members against the Climate Stewardship Act, provisions to increase CAFE standards and other federal policies. At the state level, the AAM is currently suing to prevent California from mandating a 30 percent reduction by 2016 in greenhouse gas emissions from new vehicles sold in the state.

The AAM should stop declaring that vehicles made today are “virtually emission-free,” since even by maintaining ambiguity between smog-forming and heat-trapping emissions, the claim is unfounded.

8. TruGreen ChemLawn

Conifer of Confusion

Funded and directed by TruGreen ChemLawn, Project EverGreen teaches consumers about the environmental benefits of well-maintained landscapes.

At the same time, through lies of omission, the awareness campaign hides the environment costs of chemically-dependent lawn care. Along with other members of the self-styled Green Industry, TruGreen ChemLawn has fostered an American obsession with ‘the perfect lawn.’ Each year, more than 70 million pounds of pesticides are used on America’s 30 million acres of lawn. Of the 32 pesticide products available through TruGreen ChemLawn’s residential services, 17 contain possible carcinogens, 11 contain known or suspected reproductive toxins, and all 32 threaten non-targeted species and ecosystems. Despite the growing popularity of organic lawn care, TruGreen ChemLawn does not offer customers an organic option.

TruGreen ChemLawn should cease funding and remove its executive from the board of Project EverGreen. The company should also make safety data on its pesticide products available on its Web site.

9. Xcel Energy

The Corporate Citizen

Citizens for Sensible Energy Choices was established to convince Colorado voters that a 2004 ballot initiative requiring renewable energy development was unnecessary because public utilities such as Xcel, which contributed $520,000 to the committee, were expanding renewables voluntarily.

Given that all but $100 of CSEC’s war chest came from companies, the committee qualifies as a quintessential front group, obscuring corporate interests to skew public opinion. CSEC’s case against Amendment 37 conflicted with evidence that Xcel, one of the nation’s leading wind-power providers, would not have the renewables capacity it has today without government mandates. Xcel’s largest wind farms in both Colorado and Minnesota were built only at the behest of regulators, while its plans to build further farms were dependent upon federal tax credits.

In a regulated electricity market such as Colorado, where voting can be consumers’ only recourse to more abundant and cheaper renewable energy, Xcel should not distort the democratic process by filtering its views through a front group.

10. National Ski Areas Association

The Snow is Greener on the Other Side

Sustainable Slopes is the NSAA’s environmental stewardship program, designed to promote best practices in several aspects of mountain management.

A recent study showed that, like many voluntary programs lacking standards, independent monitoring and enforcement, Sustainable Slopes is easily exploited by companies seeking public relations benefits without compliance costs. Researchers compared the environmental performance of participating ski areas to that of non-participants and found that, on average, the former fared worse. The study stressed environmental issues influenced heavily by the ski industry, particularly land and water use, and downplayed others, such as global warming, upon which the ski industry’s impact is proportionately smaller.

In contrast, Sustainable Slopes emphasizes global warming, the ski industry’s greatest threat. Facing a rise in snowlines of up to 1500 meters this century, the NSAA’s reasons for targeting global warming are understandable, yet do not excuse participants of Sustainable Slopes from improving their performance on other environmental issues. Moreover, participants undermine their actions to curb global warming by endorsing the discretionary design of Climate RESOLVE, the Business Roundtable’s ineffectual voluntary greenhouse-gas management program.

The NSAA should make Sustainable Slopes meaningful by setting concrete standards; employing third-party monitoring; and sanctioning poor performers by putting them on probation or expelling them from the program altogether. The net results would be a stronger, more dependable Sustainable Slopes for the ski areas that remain, and a bolstered case for effective climate change regulations.

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