Environment-friendly products need more regulation
But while some of the claims may be genuine, experts say that with a lack of regulation in the market, consumers need to look beyond the marketing.
Green consumerism is big business. The organic food industry alone was estimated to be worth more than $620 million last year, while retail sales have grown by 25 per cent in the past four years.
Green claims confusion
But with growth comes confusion. A recent survey of 4000 people by carbon offsetting site clickgreen.com.au found 80 per cent of people were actively seeking out products with a positive environmental impact, but 70 per cent of consumers were "naturally sceptical" of green marketing.
Consumer group Choice says green claims are "bombarding consumers" and are "often not specific nor supported by good evidence".
Earlier this month, the deadline fell on a discussion paper from the Australian Association of National Advertisers, which is proposing a self-regulatory code for environmental claims made in adverts.
But a Choice spokesman said the AANA's overarching Code of Ethics "already includes a clause promising not to exploit people's environmental concerns – so it's unfortunate this self-regulation hasn't managed to stop over-the-top green claims".
Who watches the green marketeers?
Responsibility for bringing companies to task for shonky eco claims rests with the Australian Competition and Consumer Commission, which has been very much on the green offensive in recent months.
Last month the ACCC successfully brought proceedings against GM Holden, which the Federal Court found had misled consumers over claims all Saabs were carbon neutral.
In fact, all Saab offered to do was to plant 17 trees, which is only enough to offset the emissions from driving the car for one year. In the same week, the ACCC forced V8 Supercars Australia to back down on its claims that emissions from its 2007 championship series would be offset.
"If businesses want to make claims that planting trees will offset carbon emissions, they must explain that this will occur over the full life of the trees," ACCC chairman Graeme Samuel said.
Carbon offsetting is where companies act to take extra greenhouse gases out of the atmosphere, such as investing in tree planting or renewable energy. It is sometimes used to claim a company or its products are carbon neutral and is the most contentious and confusing of all the issues surrounding "greenwashing".
Carbon trading conference
Michael Whitehead is director of Carbon Market Expo, Australia's first carbon trading conference taking place on the Gold Coast on October 30.
Federal Climate Change Minister Penny Wong and leading Australian scientist and author Tim Flannery are among the speakers.
Whitehead says carbon trading and offsets are "expanding rapidly" in Australia, which is set to introduce an emissions trading scheme in 2010.
"At the moment there is a diversity of approaches. There are good ways of doing it – and not so good ways," Whitehead says. He says there is nothing wrong with a company bragging about its environmental credentials, "provided what's behind the claims is a high quality approach".
Offset more than your guilt
Some products may well be genuine greener alternatives, but many will do little more than offset a consumer's growing environmental guilt.
Michael Rands owns New Zealand company ecostore, which has been selling eco home products for 15 years and recently moved into the Australian market.
"The amount of greenwash out there in the market appals me – these laundry and cleaning products with a big tick on them saying environmentally friendly," Randa says.
"Products say they're biodegradable – but then so is nuclear waste.
"You see the words 'no phosphate' on packaging, but that was phased out in the industry 20 years ago and the company doesn't tell you the 20 other nasties they've got in there."
The AANA's discussion paper points out that all of its codes now in force exclude claims made on packaging or labels.
"Self-regulation is just code for people to be able to get away with as much as they can," says environmental marketing guru Michael Kiely, who has worked with some of the biggest corporations in Australia.
"The climate-change issue has been alive for 15 or 20 years but the marketing companies have discovered it only in the last 12 months and the first thing they do is try to make a buck out of it – and there's nothing wrong in that because that is their job.
"But they must not damage the public sense of urgency.
"Greenwash is dangerous because it can not only damage the company but the entire issue of climate change."
Companies should back up green claims
Fiona Wain – chief executive of not-for-profit industry group Environment Business Australia who will speak at the Carbon Market Expo – says companies risk being "ripped to shreds" if they make claims they can't back up.
"There's lots of levels of greenwash out there," Wain says.
"There are companies saying anything for the sake of saying it."
Q&A: Professor Loredana Padurean, Asia School of Business
As someone who is creating Asia Pacific’s business leaders of the future, what do you believe are the essential skills leaders require?
In many ways, we need leaders who are Renaissance women/men or polymaths, as opposed to specialists of an industry or a field. A polymath is a person with profound knowledge, proficiency and expertise in multiple fields and today’s leaders have to be able to combine various ideas, look at problems in novel and useful ways, and develop a broad and yet still deep set of skills, talents, and knowledge.
You’ve coined ‘smart’ and ‘sharp’ as skills of the future. What are these?
They are replacements for ‘soft’ and ‘hard’ skills, a concept coined by a US Army doctor in 1972 who observed that his pupils had different skills: dealing with machinery required ‘hard’ skills, while dealing with people and paper were ‘soft’ skills. This concept has served us well since, but I find it too binary, not to mention the semantic implications of the words themselves.
Soft implies gentle, delicate, mild, quiet, tender, weak. However, there is nothing soft in navigating competing perspectives and cultures, handling and delivering critical feedback or dealing with office politics. Instead, I prefer to call these skills ‘smart’. Hard implies rigid, difficult, heavy, static. But how can we think of engineering or software development as static or rigid? I believe ‘sharp’ is more apt as such skills need constant updating or sharpening.
I think it’s time to reflect on these classifications, because we can drastically change someone’s perspective by how we choose to talk about and frame something.
How important are smart skills in leadership today?
Smart skills are more important than ever because we live in a world of extreme diversity: generational, ethical, value-based, gender, etc. Gone are the days when giving an order was an effective act of leadership. I personally work with people from five different continents and across five different generations, therefore as leaders, we need to know how to adapt, motivate, inspire and connect. We need to increase our investment in learning about them in action, especially as smart skills are more difficult to develop.
I believe that a successful leader today has to be both smart and sharp. Take cognitive readiness, one of my top 10 smart skills. In order to be cognitive ready, one has to master system dynamics, one of my top 10 sharp skills. Also, did you know that one of the primary reasons why digital transformation fails is not the absence of digital literacy, a sharp skill, but the need for more validation and adaptability, both smart skills. So, instead of thinking of these skills as binary, I prefer to think of them as the yin and yang; co-existing and complementing each other.
So, you can teach leaders smart skills then?
Yes, you can, via a combination of the classroom experience, plus an action component supported by deeply embedded reflection. At ASB we call this Action Learning, and we teach it both in the MBA and in the executive programs. For example, in teaching a leader emotional maturity as a smart skill, first they need to learn what it is, and then act on it, before reflecting on what we did and how we did it. And then to repeat it, but this time with more expertise and awareness. It’s not easy, but that’s why my favourite mantra is ‘the job is easy, the people are not’.
Discover Professor Padurean's successful skills for a digital transformation here