The 6 Dangers CEOs Face when Communicating “Green”

Sustainable life media logo2 Michael Sater, Sustainable Life Media, provides a great review of the most significant negatives that can result from when companies use green to enhance their brand in communications without appropriate transparency or authenticity.

Posted Dec. 2009
By Michael Sater, Sustainable Life Media

Organizations large and small are looking to their values, branding
themselves as "green" and "good." Unfortunately, green marketing allows
more than a few of them to make claims that are widely regarded as
greenwash. This results in an eco-saturated marketplace cluttered with
greenwashed products and services that at best create confusion and at
worst taint truly green goods, services and accomplishments. By Michael Sater

We
believe that sustainability is ultimately about transparency. Those
organizations that have a clear Corporate Social Responsibility (CSR)
policy partnered with authentic and transparent communications set
their brand's reputation apart from the competition. Saying you do well
is not enough: You have to actually take the measures you publicize and
communicate them clearly and honestly. A company that does it right
quickly realizes that effective and transparent communication is key to
maximizing investments, as well as transforming the company and its
brand. Company executives understand that the organizational and
technological innovations they put in place yield both bottom-line and
top-line returns.

Nike, Coca-Cola and Seventh Generation
are excellent examples. Each of these corporations not only
communicates the right things, they "walk their talk" right down
through their supply chains — that is, they do what they say they will
and make positive, measurable changes in their operations and their
communities. And when they fall short of targets, they are fast to
acknowledge the lag and begin an open discussion about how to achieve a
better result next time. The result of this transparency: They get
tremendous media attention — and customer loyalty.

Despite
these examples, too many firms are paying the price for failing to
acknowledge and avoid the six dangers in communicating green:

1. Danger of Inflating Sustainability Claims

The effort to make adherence to GHG caps — and specifically CO2
emission limits — Never exaggerate your company's sustainability
efforts.

Exaggerated
claims in today's sustainability world have tangible consequences to
the bottom line. CSR depends on real, demonstrable results. So, tell
your story — but be transparent and clear. It helps build trust and
credibility with your stakeholders.

According to TerraChoice, which measured the uptick in green advertising claims in five of the largest US publications over the past two years,
in 2009, 10% of all ads have included sustainability claims — a rise
of 42% in just two years. This trend has made the greening of products
and services big business. Although investors are eager to pump money
into new green technologies, and businesses are looking for green
advantages, it doesn't take much digging to uncover inflated claims and
outright lies.

For instance, earlier this year, the Federal Trade Commission (FTC) filed complaints
against K-Mart, Tender Corp. and Dyna-E for false claims those
companies made about their products' "greenness." In a statement about
the three cases, the FTC said that "with the recent growth in 'green'
advertising and product lines, the agency will continue its efforts to
ensure that environmental marketing is truthful, substantiated, and not
confusing to consumers."
2. Danger of Hiding the Facts

Forget about hiding the truth from your stockholders and the public.
Today, companies only succeed when they acknowledge the complexity of
the issues they're addressing and their own imperfections. In order to
be credible, focus on communicating your firm's results and performance
and lay out what more your company needs to do to reach its goals. If
necessary, go outside to reputable sustainability consultants to assist
you.

Your
audiences expect transparency In fact, it's almost as important as the
results themselves. Being transparent about both your successes and
your setbacks enables your company to continuously improve.

Corporations
that don't heed this advice risk a loss of trust, according to the July
2009 release by Edelman, world's largest independent PR firm, of its
mid-year global Trust Barometer findings.
Edelman reported that in 2009, in the U.S., trust in business
collapsed, dropping 20% over the course of one year; levels are at the
lowest in the barometer's 20-year history. The study found that for
companies needing to rebuild their audiences' trust, high on the firms'
priority lists should be making progress on environmental initiatives
and partnering with third parties.

Simply put, the danger of
opacity is that it is often seen as deception and thanks to the
information age and instant global communication provided by social
media, we'll always know and never forget that a company has been less
than truthful.

3. Danger of Touting Unverified Claims

Don't just claim your company is working toward environmental sustainability — prove it!

Third-party
certification is a required tool for communicating the values of each
product, service and organization. It impacts your brand reputation,
and your ability to do business and make a bigger profit. Any
organization will have employees working to make the company more
sustainable and responsible, but outside, neutral third-party
monitoring/verification of a company's claims is crucial to public
acceptance.

External verification of your claims and progress isn't limited to audits. It may show up as familiar trustmarks like EnergyStar(TM)
on packaging, sustainability scorecards, life cycle analysis and in
advertising and social media. According to Mitch Baranowski, founding
partner of BBMG, an advertising agency focused on connecting consumers
with forward-thinking brands, "trustmarks help companies"…
provide an objective, third-party seal of approval that demonstrates
their follow-through on social and environmental claims."

4. Danger of Ignoring Employees

Don't forget one of your most important groups of advocates: Your employees.

Research
over the last decade has made a convincing case that companies whose
employees feel highly engaged outperform companies with less engaged
workers in just about every important metric: growth, profitability,
productivity, innovation and so on.

Take Costco,
for example: The culture of the company flows downward from CEO Jim
Sinegal and his focus on employees and, by extension, customers. As a
result, Costco chalks up considerable improvements
in its product mix and sales due to alert employees, whose per person
sales are considerably higher than those found at key rival companies.

Another company that recognizes the power of employees as advocates is Xerox.
"We've been amazed by the volume of positive, thoughtful comments from
Xerox people worldwide after we released our first comprehensive global
citizenship report last year," said Hector Motroni, Chief Ethics
Officer of Xerox. "There is tremendous power in ensuring that your
people know you're a company with a heart and soul that stands for
'something more.'"

5. Danger of Failing to Back Up Claims with Metrics

That which gets measured gets done. In a world of growing
accountability and increasing scrutiny, this notion emphasizes that if
an activity is important to your business, it should be
results-oriented, with data measuring those results.

Too
many companies continue to resist measuring their waste and their
water, their energy and their impact, in a misguided attempt to appear
no so bad. In this era of increased public scrutiny, in order to claim
any form of improvement, a corporation needs to have a methodology —
such as sustainability scorecard requirements — for measuring the
items it wants to change. Businesses are used to protecting their
methodology as a corporate secret but when it comes to reporting, a
firm must avoid saying "because we said so" and instead show how it
arrived at its conclusions. With metrics systems for CSR progress
increasingly discussed and debated, take the time to explain to
stakeholders exactly how you took the measurements.

In charting their carbon footprint, UPS uses the leading global standard, the World Resources Institute and World Business Council for Sustainable Development's Greenhouse Gas Protocol. UPS publically states this in their CSR report and on their website.

David Douglas, Vice President of Eco Responsibility at Sun Microsystems
sums this up well when he advises: "Make sure you talk about how you
measured your results… We are careful to build metrics into our
social and eco-responsibility programs so that we can track our
progress…and so that our stakeholders can hold us accountable.
Without metrics, and transparency around our choice of metrics, we
would not be able to continue to engage our stakeholders to work with
us."

6. Danger of Isolation

At no other time in history has it been as vital to business success to
proactively build broad relationships. The business environment is
competitive and sometimes ruthless but you are not in this alone. In
the new paradigm, businesses must partner to some extent for success.
From consumers to employees, supply chain to NGO's, investors to
government agencies, sustainable brands are proactive in building
relationships with their stakeholder base.

Modern leadership recognizes that engagements and healthy relationships raise brand awareness. Neville Isdell, CEO of Coca-Cola believes that "companies must change the way they connect with society or society will reshape business."

Idell
stresses that "companies must connect the bottom line of their
businesses with their social conscience. Their philanthropic aims must
match their core business and the values of their employees. Companies
must be connected across four channels: the communities they serve,
governments and non-governmental agencies of social change,
philanthropies and values of employees," he said. Global companies must
become local partners or risk alienation.

The Takeaway

If you saw yourself and your business in one or more of these six
dangers, it's time to get proactive and embed the proper practices and
transparencies into your short-, medium- and long-term strategies.
Being proactive is a company's first line of defense: It enables
businesses like yours to address issues of concern and be in better
control of your messages and destiny. When you communicate, do so
clearly, with transparency and without inflating your accomplishments
or hiding your mistakes. Put neutral, reputable third-party
certification systems in place, and use them to verify your claims.
Engage your employees in your efforts and let them help build the key
relationships that will raise brand awareness. Offer valuable insights
and perspectives to key stakeholders and give your business additional
avenues of influence and opportunity to get the facts out.

Even
if you are not inclined to adopt such proactive steps at this time, you
will likely be required to pursue environmental sustainability by your
supply chain in the future. For instance, WalMart has increased pressure on its suppliers to account for their environmental sustainability
if they wish to continue selling to the world's largest retailer. And
even if you are not in WalMart's supply chain, you are in somebody
else's, and they will likely be in the WalMart supply chain, which
means you — in turn — will need to take action.

Download the White Paper here.

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