“The Sustainability Report Card: How to Avoid GreenWashing” Jacqueline Kuehnel JK Consulting Enterprises Toronto , Canada 1 Key objectives Setting the stage • Greenwashing definitions and how they fit into sustainability communication (in other words, the gray area of greenwashing) • Codes of ethic and codes of conduct ( the intersection between compliance and doing the right thing) Why communicate Sustainability • Internal and external stakeholders • Benefits (if done right) The greenwash trap • Causes and consequences (intended and unintended) Types of greenwash • Ten types of greewash and seven sins Prevention • Accuracy, substantiation and verifiability Sustainability Reporting • Steps to create a report, do, don'ts and challenges 2 Greenwashing – definition and perception “Disinformation disseminated by an organization so as to present an environmentally responsible public image”. Oxford English Dictionary “When green-talk and green practice are promoted by fundamentally unsustainable companies or other uncaring institutions, they easily congeal into a deceptive ideology known as “greewashing”. Greer J, and Bruno K. Greenwash: The Reality Behind Corporate Environmentalism. Apex Press, New York, 1997. 3 GREEN vs.. Sustainability A Typology of Differences DIMENSIONS Relation to the sustainability tripod GREEN Only one leg ( environmental improvemenet) SUSTAINABLE All three legs (environmental health, economy vitality, social Justice) Tactical application of activities that involve "picking low hanging fruit", Tacticts / Strategy promoting individual changes and reforms to make the world less unsustainable Interplay of individual components and whole system Strategy discovery of the proper scale that will make successive policy steps and actions easier and less costly by designing and implementing a sustainable self-balancing system Political orientation Conventional, "pragmatic realist, reformist Innovative visionary, revolutionary ("going to the roots") Scale Individual devices, products, indicators, practices, buildings as most ractable level for greening City , region as the level at which human and social disequilibrium's and ecological, can be rebalanced Risk or excesses Greenwashing Defenition of success Infinite progress of incremental imporvements Focus Individual components Utopian fantasizing or top-down authoritarian policy action Reduction of ecological footprint to a city, region's fair Earth-share Source: Ernest J. Yanarella, Richard S. Levine, Robert W. Lancaster. Sustainability: The Journal of Record. October 2009, 2(5): 296-302. doi:10.1089/SUS.2009.9838 4 Sustainability color prism SOCIAL SOCIAL ENVIRONMENTAL ENVIRONMENTAL Greewashing ECONOMIC ECONOMIC Brownwashing “camouflaging” 5 Definitions code of conduct and code of ethic Code of Conduct* Code of Ethics Explains explicitly what appropriate behavior is by identifying what is acceptable and unacceptable Is a statement of principles or values that guide behavior by describing the general value system within and which an organization attempts to operate in a given environment *Codes may also be referred by a variety of titles such as “Standards of Practice”, “ Code of Behavior” and “Standard of Professional Conduct” Codes are the most common approach to institutionalizing ethical behavior and aid in understanding the relationship with stakeholders. Source: Sexty, R., Canadian Business and Society, Ethics and Responsibility First Edition (2008), McGraw-Hill Ryerson Limited, Canada Compliance-based (code of conduct) vs. Integrity-based approaches (code of ethics) Integrity-Based Compliance-Based • • • • • • • Rules, laws Conformity with externally imposed standards Prevent criminal misconduct Lawyer driven Educational approach: policies and rules, legalistic Employee discretion: limited Control: auditing CODE OF CONDUCT • • • • Specific Prescription/directives Uniformity Enforceable statements of specific behavior • • Values, ethics, guiding principles Self-governance to chosen standard: self imposed • Enable responsible conduct • Management-driven • Educational approach: policies and rules, but also guidelines and awareness through leadership • Employee discretion: increased • Control: accountability, organizational systems, and decision processes CODE OF ETHICS • General • Values/principles • Judgment • “Empowerment and Aspiration” Source: Sexty, R., Canadian Business and Society, Ethics and Responsibility First Edition (2008), McGraw-Hill Ryerson Limited, Canada Code of Conduct Code of Ethics Voluntary codes of Enforced by an ethics suggest external power and guidelines to follow authority and convey and empower rules that tell people “Green” individuals to act what they must or Zone according to their must not do. conscience. Penalties Members of an are not imposed and organization must writers emphasize the obey or face qualities they think penalties. members should have Key Characteristics: •Imposed by others •What must be done or what must not be done •Rules Key Characteristics: •Self –imposed •Who we are •What we stand for •Guidelines or guiding principles 8 Why communicate sustainability ?  Stakeholder expectations  You can’t manage what you don’t measure  More organizations are doing it – peer pressure  A tool to drive and manage change  Raise staff awareness  Transparency to stakeholders  Attract investment  Enhance reputation  Risk awareness 9 Who? A Stakeholder Approach Loss of operating license Strike, sabotage Community Market loss Employees Export market Regulators Disinvestment Increased cost Shareholders Financiers Company Government Insurers Shutdown, delay Loss of cover NGOs Customers Media Campaigns Contract loss, boycott Negative publicity 10 What do stakeholders want to know? Employees - stable employer, respected corporate citizen, info on levels of remuneration, nature and extent of employment opportunities Customers - values, attitudes, societal risks linked to activities Suppliers - what demands they will face through CSR commitment Government - compliance NGOs - critical eye, often the target of reports Investors - risks and opportunities Communities - local risks and opportunities, donations, development Indicators need to be relevant to the company, its business and stakeholders 11 The greenwash trap CAUSES. It may happen while: • Selling product / services • Seeking to enhance reputation • Culture • Aspirations as action • Enthusiastic but uniformed CONSEQUENCES. It may: • Reduce public trust • Increase regulatory risk • Damage and devalues reputation Source: Reputation or Reality – A discussion paper on greenwash and CSR 12 13 Prevention Know the types of greenwash! Seven Sins of Greenwashing 10 Signs of Greenwash 14 10 Signs of Greenwash 1.Fluffy language Words or terms with no clear meaning, e.g. ‘ecofriendly’ 2.Green products v dirty company Such as efficient light bulbs made in a factory which pollutes rivers 3.Suggestive pictures Green images that indicate a (un-justified) green impact e.g. flowers blooming from exhaust pipes 4. Irrelevant claims Emphasizing one tiny green attribute when everything else is un-green 5. Best in class? Declaring you are slightly greener than the rest, even if the rest are pretty terrible 6.Just not credible ‘Eco friendly’ cigarettes anyone? ‘Greening’ a dangerous product doesn’t make it safe 7.Gobbledygook Jargon and information that only a scientist could check or understand 8. Imaginary friends A ‘label’ that looks like third party endorsement except it’s made up 9. No proof It could be right, but where’s the evidence? 10. Out-right lying Totally fabricated claims or data Source: http://www.futerra.co.uk/downloads/Greenwash_Guide.pdf 15 The Seven Sins Of Greenwashing 1. 2. 3. 4. 5. 6. 7. The hidden trade-off No proof Vagueness Irrelevance Lesser of two evils Fibbing Worshiping false labels ©2007. TerraChoice Environmental Marketing Inc. http://sinsofgreenwashing.org/findings/the-seven-sins/ 16 Sinning ….who, how often… 17 The hidden trade-off If a product claims to be green in one sense, but ignores other significant environmental and social impacts Advertising based on a narrow aspect of the product while not reporting its entire environmental impact. 18 No proof If you can't prove it with easily accessible data or reputable thirdparty verification, you should not claim it…. 19 Vagueness Terms such as "allnatural," "environmentally friendly" and other vague or unregulated descriptors can mislead consumers 20 Irrelevance If a claim is true, but doesn't distinguish the product in any meaningful way. The impact is so marginal that it does not make a big difference or it is already required by law. 21 Lesser of two evils Even if a green marketing claim is true -- it fails to recognize the overall harm caused by the product. 22 Fibbing Simple. It's a lie. Some companies will go as far as claiming to be certified organic or Energy Star-certified, but cannot back up the certification. 23 Worshiping false labels Often, a product has an official-looking seal, but the seal is meaningless because it is dreamed up by the product marketers themselves, without any application of third-party standards. 24 Greenwash check list 25 Greenwashing index scoring criteria THE AD MISLEADS WITH WORDS THE AD MISLEADS WITH VISUALS AND/OR GRAPHICS THE AD MAKES A GREEN CLAIM THAT IS VAGUE OR SEEMINGLY UNPROVABLE THE AD OVERSTATES OR EXAGGERATES HOW GREEN THE PRODUCT/COMPANY/SERVICE ACTUALLY IS THE AD LEAVES OUT OR MASKS IMPORTANT INFORMATION, MAKING THE GREEN CLAIM SOUND BETTER THAN IT IS Source: http://www.greenwashingindex.com/criteria.php 26 Easyjet CO2 claim November 24, 2008 27 The towel message 1. "Help Save The Environment," with information stressing respect for nature. 2. "Help Save Resources For Future Generations," with information stressing the importance of energy-saving. 3. "Partner With Us To Help Save The Environment," with information urging guests to help the hotel preserve the environment. 4."Join Your Fellow Citizens In Helping To Save The Environment," stating the majority of hotel guests reuse their towels. 28 Reporting on sustainability 29 Approaches to Reporting • • • “Me too” REACTIVE Reactive  What are others in our sector doing?  Report card  Checkmark approach “Classical”  Goal is to influence perceptions of the report’s readers  May affect business strategy and decisions  Public relations/communications focus “Transformational” Proactive  Process of reporting to drive change in the company, industry  Link to business goals and strategy  Integrated management and reporting approach PROACTIVE  CSR is a journey, report is a tool and one result, not the end result 30 Five Reporting Steps Step 1 Step 2 Step 3 • DEFINE REPORTING OBJECTIVES • TAKE STOCK OF INTERNAL ISSUES • PREPARE AND BE AWARE •COLLECT DATA AND DEVELOP INDICATORS Step 4 Step 5 • DECIDE ON REPORT 31 Report Structure • By stakeholders • By corporate principles or commitments • By business line or operational sites • By key issues (e.g. Climate Change) Sustainability Communications Do’s • Give a clear picture of corporate values, principles, governance and management practices as well as performance. • Strike the balance between what stakeholders find interesting to know, what they have a right to know, and what is practical and valuable for business to manage and report. • Focus on quality not quantity and not attempt to be everything to everyone. • Explain to readers what they should expect. • Provide relevant, reliable and comparable information. • Provide context – business, industry & sustainability. • Focus on materiality, strategies, risks and opportunities. • Provide some form of assurance. 33 Sustainability Communications Don’ts • Don’t strive to be everything to everyone • Don’t ‘carpet bomb’ – thin is in • Don’t be afraid to make and admit mistakes – nobody’s perfect but own up to shortfalls and discuss remediation • Don’t produce “smiling, happy people” reports – balance the good, the bad & the ugly! • Don’t forget to market the report 34 The Global Reporting Initiative (GRI) What is the GRI? • World-wide, multistakeholder network • Default standard • Over 1,100 GRI reporters and counting in 60 countries Why use the GRI? • Comprehensive checklist • Comparability (interest from investors) • Auditability • Supply chain demands Alberta Sustainable Tourism Forum December 9, 2010 Reporting Challenges  Developing field, moving target  Addressing multiple stakeholders  When do you start?  Timing & resource allocation  Showing link with strategic direction  Credibility  Much talk on good reporting actual performance can be difficult to judge  Materiality- to the business and stakeholders  Many companies look at reporting as an obligation  Integration of CSR reporting with financial reporting  Standardization vs.. individuation  What information to include – tradeoffs between completeness & focus on issues of greatest importance  Report content & structure  Who reads the report? 36 Launching your sustainability communication plan • Allocate a budget (from marketing ?) • Market internally & externally (podcasts, treasure hunts, newsletter, internet & intranet) • Keep the report consistent with other company marketing materials (logo, colors, look & feel) • Be creative! See examples from other sectors such as Starbucks, Timberland 37 Summary and basic principles of sustainability communications 1. 2. 3. 4. Understand your brand Understand your costumers Get your house in order Use sustainability as an opportunity, not a risk management tool 5. Innovate 6. Motivate 7. Collaborate 8. Communicate 9. Sign up consumers to the sustainability journey 10. Measure, monitor and report continuously SOURCE: WWW.CHANGEBIZ.COM 38 Global Advertising Codes • Australia Green Marketing and Trade Practices Act • France Charte d’engagement et d’objectifs pour une publicité eco-responsible • Norway Use of Environmental Claims in the Marketing of Vehicles – not directly relevant to tourism, but gives an indication of the direction of possible future regulations UK Green Claims Code British Code of Advertising, Sales Promotion and Direct Marketing – there is a separate code for broadcast advertising, available from the same website • USA Guides for the Use of Environmental Marketing Claims 39