False ‘Green’ Ads Draw Global Scrutiny

Wall_street_journal_online_jpegOriginally posted Jan. 30, 2008
by Tom Wright, The Wall Street Journal

Watchdogs’ Rulings 
Bring Bad Publicity, 
But Many Lack Bite

With companies eager to tout their "green" credentials to consumers,
advertising watchdogs in a number of countries are stepping up efforts
to rein in marketers that make false or exaggerated claims.

In one of the latest examples, the United Kingdom’s
Advertising Standards Authority found this month that a series of
television ads by the Malaysian Palm Oil Council misleadingly claimed
the industry was good for the environment. In one ad, which appeared on
satellite channels across Europe, Asia and the U.S., a man jogs through
a natural rain forest, interspersed with shots of palm-oil plantations
and wildlife. "Malaysia palm oil. Its trees give life and help our
planet breathe," the voice-over declared.

The problem: Oil-palm plantations, which produce a
vegetable oil used in products such as margarine and soap, have often
been planted in illegally cleared natural rain forests. In neighboring
Indonesia, where Malaysian palm-oil companies own large operations,
plantation development is destroying the natural habitat of species
such as the Sumatran elephant, environmentalists say.

"We concluded that the ad was likely to mislead
viewers as to the environmental benefits of oil-palm plantations,
compared with native rain forest," the U.K. authority ruled.

One limitation with these groups is that the
fact-finding process can sometimes take so long that the offending ad
is no longer on the air when the ruling is issued. That’s what happened
with the Malaysian Palm Oil Council, which wasn’t affected by this
month’s decision, because it had already stopped showing its ad last
year. The Advertising Standards Authority can take as long as a month
to make a decision.

From the U.S. to Norway to Belgium, watchdog groups
are trying to police against the rise in bogus environmental marketing,
a practice known as greenwashing. In most cases, these groups are set
up by the advertising industry and run by a third party, and they
operate on the honor system. When the watchdogs are set up, marketers
and ad agencies agree to abide by their rulings, which often means
dropping ads that are deemed deceptive. If the marketers later fail to
do so, they run the risk of bad publicity or possibly even litigation.
Only in a few countries, such as Norway, can regulators impose fines.

Environmental advocates say the increased vigilance is
welcome, even if the watchdogs have limited powers. "Since the
climate-change issue is hot, in Europe there’s a load of ‘greenwash’
advertising," says Paul de Clerck, a campaigner with Friends of the
Earth Europe.

In the U.S., the Federal Trade Commission, which
oversees advertising claims, began hearings this month to determine the
kinds of claims that can genuinely qualify as green marketing. The FTC
plans to update its environmental advertising guidelines, which were
last revised in 1998. Those guidelines set standards for terms such as
"recyclable" or "biodegradable" in the advertising of products. But
they don’t deal with standards for trendier environmental claims such
as "carbon neutral," where a company asserts that it has offset the
amount of carbon dioxide (a heat-trapping greenhouse gas) emitted in
making its product.

Sometimes, companies try to knock a rival business’s
products as bad for the environment to gain a competitive edge. The
National Advertising Division of the Council of Better Business
Bureaus, a U.S. industry-run advertising body, last year ruled that
Born Free LLP, a distributor of infant feeding bottles, had to drop ads
that claimed that the plastic used in a competitor’s bottles was unsafe
for both the environment and kids. The division says it heard no
environmental cases from 2000 to 2006, but has adjudicated six since

In Norway, government regulators in September banned
all car ads from stating that their vehicles are "green," "clean" or
"environmentally friendly" on the grounds that all car production leads
to more, not fewer, carbon emissions. The Belgian industry-run,
advertising-standard authority in October ruled that Swedish auto maker
Saab Automobile, a unit of General Motors Corp., must pull a print campaign in which it claimed that its "Biopower" range of cars make the roads "finally turn green."

Despite the regulatory backlash, companies are often
loath to use subtle language to advertise their environmental claims
for fear the ads won’t stand out, says Mike Longhurst, a London-based
executive with McCann-Erickson, a unit of Interpublic Group.

"Clients prefer to say it’s good for the environment, rather than it’s not so bad for the environment," Mr. Longhurst says.

Malaysia’s palm-oil industry decided to come out with
its TV ad because environmentalists recently have stepped up attacks on
palm oil, calling it a major driver of forest loss: Trees soak up
carbon dioxide, and cutting them down emits huge amounts of the
heat-trapping greenhouse gas back into the atmosphere, spurring global

The Malaysian Palm Oil Council, a grouping of producers, hired TWBA Worldwide, a unit of New York-based Omnicom Group,
to promote the industry’s green credentials. "We decided it was about
time we gave a public-service announcement to the consumer," says Yusof
Basiron, chief executive of the palm-oil council.

But the U.K body ruled that by blending footage of rain forests and oil-palm plantations, the ads misled the public.

The council maintains that since 1990, all oil-palm
plantations in Malaysia have been planted on already denuded land, not
natural rain forests. It also says it didn’t mean to imply that
oil-palm plantations were as biodiverse as rain forests.

"A lot of the implications were something we didn’t
intend in the ad," says Aaron Cowie, chief operating officer of TWBA
Worldwide in Malaysia.

Write to Tom Wright at [email protected]

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