‘Greenwashing’ Continues to Stir Debate

In his blog Joel Makower recently wrote a thoughtful piece about greenwashing. He makes a case that companies making green claims are damned if they do, damned if they don’t because critics fail to see the positive steps they make.

“These days, greenwashing is applied by some to just about any environmental statement from any large company. That’s left many companies confused and conflicted, unwilling to talk about what they’re doing right, however imperfect, for fear that such communications will brand them with the G-word,” Makower writes.

Read Joel Makower’s post, ‘How Bad Is Greenwashing, Really?’

Green is Good, Say IT Buyers

No single enterprise IT brand perceived as clear ‘green’ leader globally

AUSTIN, Texas–(BUSINESS WIRE)–Do “green” products and marketing matter in the enterprise technology industry? According to GreenFactor, – the first global “green” enterprise IT study released today by Strategic Oxygen, GCI Group and Cohn & Wolfe, “green” products are not only highly important for the environment, they are potentially profitable: More than 70 percent of the global respondents said they “probably” or “definitely” would increase their preference for a brand’s “green” products if they were convinced of the positive impact on the environment and business. Almost 60 percent said they would expect to pay a premium for “green” products.

While there are significant “green” IT opportunities, GreenFactor also highlights some major challenges, according to Michael Gale, CEO, Strategic Oxygen. “There are statistically significant differences between countries, so many of the ‘green global campaigns’ being implemented by IT brands today will not be successful. Plus, the C-suites and their IT groups are not in-synch and really don’t believe there is a ‘return on green’.”

“The bottom line is that ‘green’ IT marketers are going to have to be really smart about how they go to market,” added Paul Walker, president, GCI Group. “They need to target the right countries and the right ‘green advocates’ in the C-suite with credible value propositions. We’re excited about GreenFactor because it provides a strategic roadmap for getting it right.”

Conducted in the first quarter of 2008, GreenFactor surveyed more than 3,500 enterprise IT decision makers – including CXOs, CIOs, IT Managers and Line of Business Managers – in 11 countries. The study looked at 26 enterprise technology brands to determine decision makers’ perceptions of “green” IT, products and marketing. Additional information and video commentary on the results can be found at www.greenfactorstudy.com.

“Green” Insights and Implications

CMOs of enterprise IT brands should take note of four major findings in the study:

• No single enterprise IT brand is perceived as a clear “green” leader globally. In fact, there is no statistical difference between the top seven leaders (leaders listed below).
• The importance of “green” IT to IT buyers varies country by country. India’s respondents, for instance, emerged highest as both expecting to pay at least a five percent premium on “green” IT and as having a preference for it if they can be convinced of positive impact on both the environment and their budgets. At the same time, nearly one quarter (24%) of respondents in Germany believe buying “green” products has no real impact on the environment, generally twice that of any other country. Findings like this imply that universal, global “green” messaging is ineffective.
• There are disconnects within organizations themselves on the importance of “green.” For instance, CXOs globally chose “price” as a barrier to “green” with lower frequency than all other titles surveyed, and CIOs state they “definitely will” look to purchase some “green” products this next year at a higher rate than other respondents. This suggests that IT brands should target C-level executives in order to convince them to direct and empower their teams to include “green” IT into specifications.
• Not surprisingly, “perceived economics” is the biggest barrier to “green” adoption. In nine of 11 countries polled, price was the top barrier. Marketers must focus on better communicating total cost of ownership and overall value to potential buyers.

Green “Leaders” and “Laggards”

Despite varying degrees of “green” products, programs and marketing initiatives, there is no one clear “green” IT brand leader globally. However, when IT decision-makers and IT influencers were asked which brands they most associated with “green” technology, a handful of companies consistently came out on top:

• Apple
• HP
• Microsoft
• IBM
• Intel
• Sony
• Dell

Those companies that did not fare as well on “green” perception were:

• SAP
• Alcatel-Lucent
• Nortel
• EMC

Globally, Microsoft and Google have a statistically significant(a) higher perception of being “green” than all other software and Internet companies included in the study.

“It’s interesting that Google, a company that does not produce tangible hardware or software, but consumes a significant amount of resources appears so highly on this list,” said Mr. Gale. “They’ve clearly done a good job of demonstrating they are working hard to innovate new, more power efficient solutions.”

Green Countries

India emerges as the study’s leader in “green” IT potential, as a higher percentage of respondents in that country expect to pay at least a five percent premium on “green” IT or “definitely would” increase their preference for “green” IT with proven ROI – or both. The remaining countries fall progressively further behind India due to a tendency to lean strongly toward either an expectation to pay at least five percent more or stating they would definitely prefer “green” with proven ROI – but rarely both.

In fact, buyers in some of the largest economies and B-to-B markets for technology are not convinced they would prefer “green” even if its ROI could be proven, notably Japan and Canada. Conversely, IT buyers in Mexico are more likely to prefer “green” if the ROI is proven, but are unlikely to pay a premium.

When the data is cut to view respondents that satisfy both conditions — expect to pay at least a five percent premium on “green” IT and “definitely would” increase their preference for it with proven ROI – India remains the leader in “green” IT potential by a wide margin:

• India (22.3%)
• U.S. (14.9%)
• Mexico (13.9%)
• UK (12.9%)
• France (12.3%)
• Australia (11.9%)
• Brazil (8.4%)
• Canada (8%)
• Germany (7.9%)
• Japan (6.4%)
• Italy (4.8%)

“Initially, it seems counter-intuitive that India would be ‘number one,’” said Mr. Walker, “but this is a country experiencing a high-rate of IT investment and datacenter growth – coupled with ‘brown outs.’ It makes sense that IT decision makers there would be more sensitive to environmental challenges and increasingly supportive of growing their “green” IT solutions.”

Green Premiums

The GreenFactor survey also sought specific information on how much more or less respondents would expect to pay for “green” technology, including desktops, laptops, servers, storage or networking hardware. The results show that “green” IT premiums are expected more in some countries than others.

Nearly two-thirds of all respondents in Mexico (63%) and more than half of respondents in Italy (58%) and Brazil (57%) expect to pay the “same” or “less” for “green” IT. On the other hand, about two-thirds of all respondents in Japan (71%), the U.S. (66%) and India (66%) expect to pay some level of premium.

Green Barriers

When asked “What are the biggest barriers to adopting a ‘green’ approach when purchasing technology-related hardware for your organization?” IT decision-makers and IT influencers were allowed to choose what they perceived as the top two barriers. Here’s how the barriers ranked globally:

• Price (38%)
• Disagreement internally/political (25%)
• Efficiency will not offset costs (22%)
• Brands not convincing us of ROI (18%)
• Brands not promoting importance of “green” products (18%)
• “Green” products not available (16%)
• No impact on environment (12%)

Not surprisingly, “Price” was the top barrier in nine out of the 11 countries. The exceptions were Mexico, where “brands not promoting the importance of green” was the top barrier, and Italy where “disagreement internally/political” reasons were the top barrier.

Although price is seen as the highest barrier among all job titles surveyed, CXOs chose “price” as a barrier with lower frequency (only 33%) than Line of Business Managers (40%), CIOs (39%) and IT Managers (38%).

Green IT Purchases This Next Year

IT decision-makers were also asked to look at specific technology hardware (laptops, desktops, servers, storage and network hardware) through the purchasing lens of the next twelve months.

When faced with these products over the next year and asked “Will your organization look to purchase products that are considered ‘green’?” respondents said they probably or definitely would look for “green” versions of these products:

• Laptops (74%)
• Desktops (72%)
• Servers (64%)
• Storage (63%)
• Network Hardware (63%)

This global data shows that “green” laptops and desktops will be sought after more frequently in the next year than “green” back-end technology.

Globally, CIOs state they “definitely will” look to purchase “green” technology products of some kind this next year at a higher rate (48.3%) than CXOs (39.4%), IT Managers (37.3%) and Line of Business Managers (37.1%). CIOs also show a higher affinity for “green” laptops. They “definitely will” look to purchase “green” laptops this next year at a higher rate (38.8%) than CXOs (32.3%), Line of Business Managers (30.3%) and IT Managers (28.1%).

About GreenFactor

GreenFactor is a joint initiative between Strategic Oxygen, GCI Group and Cohn & Wolfe to illuminate “green” marketing opportunities and further “green”-focused research on a global scale.

This study will be repeated and expanded in the fourth quarter of 2008 when the team will also launch a consumer electronics study on a comparable scale. The long-term intent of the GreenFactor project is to build a progressive set of tools and frameworks that enable marketers to successfully position themselves and their “green” offerings. Additional materials and information on the results can be found at www.greenfactorstudy.com.

For the purposes of the study, “green technology” was defined as having efficient power consumption, recyclable/reusable packaging, recycling offers for older equipment, use of non-toxic materials, or making investments in future “green” concepts such as alternative materials.

Brands included in the study were Alcatel-Lucent, Acer, Apple, AMD (not in U.S., Canada, UK, India or Australia), Cisco, Dell, EMC, Fujitsu, Google, HP, IBM, Intel, Lenovo, Microsoft, Motorola (not in U.S., Canada, UK, India or Australia), NEC, Nokia, Nortel, Oracle, Samsung, SAP, Sony, Sun Microsystems, Symantec, Toshiba, and Xerox. Countries included in the study were Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Mexico, the United Kingdom, and the United States.

Methodology: In Q1 of 2008, more than 3,500 technology buyers were interviewed globally via web-based survey. Respondents represented employees at small, medium and large companies, including the Fortune 500. Respondents were paid for their time to fill out the survey thoughtfully and carefully. Incentive level varied depending on the respondent’s job title and company size in order to access the hardest-to-reach targets. In order to qualify for the survey, a respondent had to have the responsibilities of a CIO, CXO (all C-Level executives excluding CIOs), IT Manager or a LOB (Line of Business Manager). In addition, they had to have been involved in the purchase of laptops in the last 12 months or in the next 12 months. “Purchase involvement” was defined as determining features needed or specifying technical requirements, evaluation or specifying products for purchase, evaluation or specifying where to buy, and/or recommending products or brands to purchase.

(a) Statistical Significance: using a 95% confidence level.

For more information visit www.gcigroup.com or www.cohnwolfe.com.

GM Shifts to ‘Fuel Economy and Hybrids’

It’s  no surprise that auto makers like GM are repositioning themselves as green. But as an article in Brandweek reports, a GM executive recently announced a substantive shift away from trucks and toward “fuel economy and hybrids.” That’s a major change for a company that has made trucks and SUVs its bread and butter for more than a decade.

The Los Angeles Times reported yesterday that a sharp decline in trucks and SUVs sent GM sales plummeting in May 2008, compared to the same time period a year ago. The company is now discussing possible sale of the Hummer division and is “considering all options for the Hummer brand.”

GM’s shift toward smaller, more efficient cars is more a response to market pressers than a move to go green. Rivals like Honda fared much better in May, with sales of the Civic breaking records.

GM’s plug-in hybrid Volt is expected for the 2010 model year.

Brandweek article 

Los Angeles Time article 

Canada to Regulate Green Messaging

The Competition Bureau and Canadian Standards Association are soon expected to issue guidelines on environmental claims for marketing and packaging, according to the Financial Post on May 23, in an article “Green halo or greenwash?”

The article also discuses that voluntary guidelines have been difficult to establish within the Canadian marketing community because no firm definitions or standards exist.

This move comes as the US FTC is reviewing green advertising guidelines to include caron offset claims.

Financial Post

A Paradox of Green Consumers

Adweek, in an article called “Deflating a Myth: consumers aren’t as devoted to the planet as you wish they were” exposes a paradox of green consumers: they expect more green action from corporations than they are willing to commit to in their own lives and purchases. And those consumers are more willing to punish a company for doing bad than reward them for doing good, the article explains.

The article also discusses consumers’ relative inaction on issues like global warming, instead taking measures they perceive as affecting them directly, such as polluted water and toxic waste.

Read the article

Go By the Numbers

Seth Godin’s post “The coming backlash over green marketing” calls for numbers to bring greater credibility to green messaging. What numbers? Not numbers about carbon dioxide saved, or trees planted, but numbers that account for the total environmental impact of a product, using some yet-to-be-developed scale.

With the FTC reviewing green advertising guidelines and consumer skepticism about green marketing claims, the time is opportune to consider standardization of green messaging, whether Godin’s number idea, or some measure of carbon footprint, or third party certification.

Seth Godin’s Blog 

Marketers Need Environmental Education

Marketers, not consumers, need education on sustainability, writes Jonah Bloom in Advertising Age: “Does the marketing world care enough to actually know what it’s talking about, or just enough to hang out a recycled shingle and make a quick buck? At the moment, it still looks a lot like the latter.”

Bloom cites a 2008 BBMG Conscious Consumer Report documenting high awareness of environmental issues among consumers, with many taking green issues into consideration when making purchases.  The author also mentions an upcoming US FTC hearing tomorrow that will review green marketing guidelines amidst a flood of green marketing claims in recent years.

Advertising Age 

Green Product Seals Confuse, Mislead

An article in the San Francisco Chronicle yesterday highlighted the confusion created by the many green seals seen on today’s consumer products. Wording such as “natural” and “sustainable” were examined as well.

Read article 

Consumers Misunderstand Green Messaging, Want Regulation

Cone Releases 2008 Green Gap Survey

Further evidence of consumer skepticism, confusion and desire for verifiable data was unveiled in a survey released today by Cone LLC and The Boston College Center for Corporate Citizenship.

“Americans misunderstand key phrases commonly used in environmental marketing and advertising, giving products a greater environmental halo than they deserve and creating a growing risk of backlash. At the same time, with days until a U.S. Federal Trade Commission public hearing on the subject, a majority of Americans support government regulation of such messages,” reads a press release by CONE.

As previously reported, the U.S. Federal Trade Commission began reviewing its existing “Guides for the Use of Environmental Marketing Claims” late last year. The FTC may add phrases to address new green messaging claims including the phrases “carbon offset,” “renewable energy” and “sustainability,” according to Newsday.com.

Previous posts on FTC Guides for the Use of Environmental Marketing Claims

CONE press release

Consumers’ Recall, Skepticism of Green Messaging High

BURLINGTON, Mass.–(BUSINESS WIRE)–Consumer recall of advertising with “green” messaging is very high, with more than a third (37.1%) of consumers saying they frequently recall green messaging and an additional third recalling it occasionally (33.1%), according to a new Burst Media survey.

Consumers do not automatically accept green claims made in advertisements. In fact, the Burst survey found one in five (22.7%) respondents say they seldom or never believe green claims made in advertisements. Two-thirds (65.3%) of respondents say they “sometimes” believe green claims made in advertisements, and 12.1% say they “always” believe green advertising claims. Skeptical consumers want to be able to investigate claims, and many do. Burst’s survey found that 41.6% of consumers frequently or occasionally research the claims made in green advertisements, with only 30.1% refraining from any further research.

The Burst survey found that four out of five (79.6%) respondents use the Internet to conduct personal research on green initiatives and products. The survey also found that many respondents find the availability of corporate information on green and environmentally safe products and services lacking. Burst’s survey showed that 41.6% would rate corporate information as only average and many others would rate the information as fair (20.8%) or poor (17.2%).

The Burst survey also revealed several interesting findings about the green consumer. These include:

• Green is a goal of many, attained by few: More than four out of five (81.9%) respondents have incorporated some level of green activity into their lives – only 12.9% are “not green at all.” Although most respondents have integrated green activity into their daily lives, few (5.2%) are “completely green.” In fact, most respondents are “aspirationally green” - a plurality (43.9%) incorporate a few things that are green into their daily lives but “have a long way to go,” and another 38.0% attempt to be “as green as possible, but not 100%.”
  • Varied reasons for pursuing green activities - The motivators to go green are many, but respondents most frequently cite “good for the environment” as the reason they include green behavior in their daily lives. Other reasons cited for going green include to impact the future, to live a better quality of life, good for the community (32.5%), desire to make a difference (31.2%), desire for a healthy body (29.8%), and desire to live simply and use less (29.2%).

An intriguing survey result is the reason stated for why the “aspirationally green” and “completely green” segments have adopted these behaviors. Three out of five respondents who are “aspirationally green” cite “good for the environment” as a reason for going green – clearly the leader among all reasons offered. However, among the “completely green” segment the top reason for going green is “to live a better quality of life,” followed by “good for the environment.”

• Disparate Green topics motivate online research: Survey data showed that consumers research many different green topics. The most popular online green content is recycling information and healthy recipes. These are followed by information on alternative energy sources, natural remedies, eco-friendly cleaning products, green technologies, nature/outdoor recreation, tips for simple living, gardening/organic gardening, and organic foods.

“Businesses that can support their claims in their green messaging and sustainability topics in a way that incorporates the consumers in the conversation are at an advantage in the marketplace,” said Jarvis Coffin, CEO of Burst Media. “In providing information that is accessible, transparent and easy for consumers to share, businesses have the opportunity to reach consumers in relation to a core personal value.”

Burst Media Press Release