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Brunel MG3113 2012 Green-washing

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Educated Change Ltd

on 12 April 2012

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Transcript of Brunel MG3113 2012 Green-washing

Greenwashing and Production http://www.oecotextiles.com/wake-up-story.php Wikipedia defines greenwashing as a term describing the deceptive use of green PR or green marketing in order to promote a misleading perception that a company’s policies or products are environmentally friendly. The term green sheen has similarly been used to describe organizations that attempt to show that they are adopting practices beneficial to the environment. Green consumer = bull sh_ _ Sustainability = use less 1) The Sin of Worshiping False Labels: a product that (through words or images) gives the impression of third-party endorsement or certification where none really exists; basically fake labels.

2) Sin of the Hidden Trade-off: a claim suggesting that a product is “green” based on a narrow set of attributes without attention to other important environmental issues.
3) Sin of No Proof: An environmental claim that cannot be substantiated by easily accessible supporting information or by a reliable third-party certification.
4) Sin of Vagueness: a claim so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer.
5) Sin of Irrelevance: An environmental claim that may be truthful but is unimportant or unhelpful for consumers seeking environmentally preferable products.
6) Sin of Lesser of Two Evils: A claim that may be true within the product category, but that risks distracting the consumer from the greater environmental impacts of the category as a whole.
7) Sin of Fibbing: just what it says – environmental claims that are simply false. 1. Using the company’s own in-house environmental program without further explanation.
2. Using certification-like images with green jargon including “eco-safe”, “eco-preferred”.
I’ve begun to see examples of products which claim to be certified to the GOTS standard (Global Organic Textile Standard) – but the reality is that the fiber is certified to the GOTS standard while the final fabric is not. There is a big difference between the two. And the GOTS-certifying agencies have begun to require retailers to be certified – to keep the supply chain transparent because there have been so many incidences of companies substituting non- GOTS products for those that actually received the certification. The most overused example of this is with recycled content of fabrics – a textile is advertised as “green” because it is made of x% recycled polyester. Other important environmental issues such as heavy metal dyes used, whether the polyester is woven with other synthetics or even natural fibers (thereby contributing to other environmental degredation), the fact that plastic is not biodegradeable and contains antimony or bisphenol A may be equally important. Cargill Dow introduced it’s new Ingeo fiber with much fanfare, saying that it is based on a renewable resource (rather than oil). Missing entirely from Cargill Dow’s press materials is any acknowledgement of the fact that the source material for these products is genetically engineered corn, designed by one of Cargill Dow’s corporate parents, Cargill Inc., a world leader in genetic engineering. That’s a potentially huge problem, since millions of consumers around the world and several governments have rejected the use of genetically engineered (GE) products, because of the unforeseen consequences of unleashing genetically altered organisms into nature. 1 2 Google organic fabric and you can find any number of companies offering “organic and natural fabrics” with no supporting documentation. And the People for the Ethical Treatment of Animals really took exception to this claim: 3 ‘All-natural’ is an example. Arsenic, mercury, and formaldehyde are all naturally occurring, used widely in textile processing, and poisonous. ‘All natural’ isn’t necessarily ‘green’. Hemp is a fabric that has been expertly greenwashed, as most people have been led to focus on the fact that it grows in a manner that it is environmentally friendly. Few realize that hemp is naturally made into rope and that it requires a great deal of chemical softening to be suitable for clothing or bed linen. Or this ad from Cotton Inc.:
4 5 6 7 The term “organic” is the most often used word in textile marketing – and what does it really mean? Organic, by definition, means carbon-based, so unless the word “organic” is coupled with “certified” the term is meaningless. But even “certified organic” fiber can cause untold harm during the processing and finishing of the fabric – think of turning organic apples into applesauce (adding Red Dye #2, stabalizers, preservatives, emulsifiers) where the final result cannot be considered organic APPLESAUCE even though the apples started out as organic. It is said that the amount of “organic cotton” supposedly coming out of India far outweighs the amount of organic cotton actually being grown. It is common practice for vendors to call a batch of cotton “organic”, if minimal or no chemicals have been used, even if no certification has been obtained for the fiber. It’s also generally understood that certification can be “acquired”, even if not earned. Again, the use of recycled polyester as a green claim distracts from the greater environmental impact that plastics have on the environment, the much greater carbon footprint that any synthetic has compared to any natural fiber, the antimony used in polyester production, the fact that polyesters are dependent on non renewable resources for feedstock…the list goes on. You are ready What can a department do to change and how
Board
Exec employees (CEO,CFO,...)
Finance
Marketing
IT
Sales
Customer service
Production
Supply Chain
Share Holders
Customers You work in a company. Each person in your group represents a department in the company.
The company makes clothing.
Offices are located around the world. Each person representing a department will come up with the following for your assigned sin:
What the sin means to your department
What can the department do
When should the department do
When the department make the decision about the sin, what 3 things should they consider
What are the risks
What are the assumptions Write it up, one person in the group send to me via email 1. Break into groups of 10
2. Elect someone to run group and consolidate info
3. Follow instructions pklein@educatedc.com Executive Functions:

1. Sin 3 - Sin of No Proof

2. What the sin means to your department: The company should seek for internationally recognized reliable certifications.

3. What can the department do: Ensure correct strategy is used and compliance to regulations

4. When should the department do: Set the broad company strategic direction for all departments to follow

5. When the department makes the decision about the sin, what 3 things should they consider: International recognition in certifications, Resources involve, Procedure of achieving certifications

6. What are the risks: There may be major changes to the existing company practice in many departments

7. What are the assumptions: Executives have the intention to make such change


Sales:

1. Sin 4- a sin of vagueness

2. What the sin means to my department: The sin indicates that the department should make consumers aware of facts in regards to colouring and production

3. What the department can do: My department must ensure that its members do not mislead the consumers when making a sales pitch. They can do so by making sure that they provide correct factual data in regards to materials and quality.

4. The three thing they should consider when making decisions about the sin are

a: sales staff all are made aware of the facts
b sales staff do not confuse qualities of one product to another
c: sales staff are always honest about the quality and guarantee

5. The risks indicated are that consumers may begin to percieve the company as dishonest and of poor quality and then go to competitors which will result in a loss of sales and create a damagingly poor corporate image.

6. The assumptions generated can be that through providing honest factual data consumers will be attracted to buy our products and feel that they are recieving a good level of customer service which will increase profits and attract and retain consumers generating a health customer base and also increase market share as consumers are a vital factor that plays a big role in the survival and competitive edge of a b usiness.


Marketing:

1. Sin 7- Sin of Fibbing

2. What the sin means to the department: false claims suggesting the chemicals in the dye are safe to use by the consumer and are environmentally safe

3. What the department can do: The department must ensure that throughout marketing the product no false claims are made about chemicals being safe to use

4: Three things that should be considered when making decisions about the sin are:

a. Employees in the marketing department are aware of the no making any false claims
b. Being truthful in all marketing activies


5. What are the risks: risks are that consumers may not purchase such products, and create a negative image of the company due to false claims

6. What are the assumptions: By providing customers which truthful information about the product, consumers are likely to create a good corporate citizenship image of the company.


Production:

1. Sin 2- Sin of Hidden Trade-Off

2. What is means to the department: focusing on only a small number of chemicals that are safe to use and neglecting the other that are more dangerous

3. What can the department do: be honest about all the chemicals used and not exaggerating the safer chemicals in the product

4. 3 things that should be considered when the departments makes a decision about the sin:

a. Use specific chemicals that are safe to use by the consumers
b. Ensure the consistency of the chemicals mixed together
c. Continually improving the product so it is safer to use

5. What are the risks: If its not environmentally safe, then it is harmful to consumers and potentially damaging to the environment

6. Assumptions: If production consistenly improves, consumers are likely to purchase based on trust of the product
Seven Sins Assignment
What the sin means to your department:
Exec Employees - “Sins don’t mean much to me as I want to make money”
Finance – “As a company we need to make a profit”
Customer Service – “Convicted, committing sin of vagueness - there is an awareness that it is wrong but cannot repent as others will not follow suite”
IT – Traditional business model has certain requirements which indicate use of resources – feel the need to improve environment performance through technology adaption
What Can the Department Do?
Marketing – use recycled paper to advertise
Finance – invest in sustainability and distribute money to different functions of the company to improve environmental performance
IT – Simplify information exchange within the company
Sales – Display a green image of the product
Sales – promise customers that the products sold do not pose a threat to their wellbeing
Marketing – When marketing we can advise trade because we don’t use employees below the age of 16
Customers – protest that the product sold be changed and be trustworthy – propose use of pressure group t influence companies
Exec Employees – Respond to pressure group and employee demands
What Should the Department act?
IT – immediately to influence change
Marketing – await support from finance as to what action should be pursued and when
Finance – spend money on environmental issues to reduce the impact and drive sustainability
Customer Service – await the intensity of customer reactions and pressure groups before action
Customers – immediate effect
The Seven Sins of Greenwashing

Production- Sin of Worshiping False Labels

As the production department for a company making clothes, the assumption is made that this department is in a developing country. Therefore, this sin would not matter to us as we follow orders from people higher than us in the hierarchy. We are concerned with making as much money as possible to provide for our family.

The only thing this department can do is to potentially go on strike; however, this would mean that we would not get paid.

This action of strike should happen immediately if it was found that products were being labelled incorrectly and giving false information to consumers. However, we must consider again that we would not get paid for the time that we were on strike.

When making the decision about this sin, our production department should consider the following aspects:

• If it was found that products were being falsely labelled, there would be negative impact on the business. In the worst case scenario the business could close and we could lose our jobs.
• The blame of false labelling products may come down on us, as we are essentially producing the products.

The assumption could be made that consumers and other stakeholders would realise that we are in a position that we could not stop this, as we follow orders. The risk of this however is losing our job and therefore have no source of income.

Customers- Sin of Worshiping False Labels

Creates a negative perception of the firm as they are preaching unethical practices.

Customers can boycott the firm and refuse to buy their clothing which can raise negative publicity.

This can be done through protesting etc. as the company maybe using cheap labour from a developing country.
.
Consumers have to consider the effect they have as pressure groups and if the actions have a significant influence on the clothing firm.

The risks and assumptions could be that the brand image of the company is damaged, reduce sales as a negative perception of a company is often difficult to change.

Shareholders- Sin of Worshipping False Labels

False claims will only affect shareholders if there is a threat to their image leading to negative return on their investment.

To ensure people continue to invest otherwise it would mean lack of finance in the business. They need to consider this immediately.

The following things should be considered:

• If they are making ethical claims they need to uphold this.

• The potential negative image on the business would mean that they would not have good return on their investments.

The risks and assumptions are that the company would go into administration.


Supply Chain- Sin of the Hidden Trade-off

False or misleading information can lead to companies wanting to boycott goods from the supplier.

Department can speak to manufactures and ask them to be specific and truthful when informing customers of how the products are 'green' and to what extent, if not they could refuse to purchase from the production company.

The department should not wait to receive complaints from their customers they should use their initiative and question whether it is right or wrong from the beginning, as it may prove to be difficult to ask the production team to make changes in the future.

How much of an effect the issue will have on consumers (it may not matter at all to the majority, so is it really worth correcting), how it will affect the business of suppliers and will it jeopardize relationships that have already been built.

Could lose out on good business relationships between producers and suppliers and therefore profits will be low, and will have to look for more producers to buy products from.

Specifying and listing the bases which indicates the products are 'green' could encourage more sales from buyers and will also be beneficial to suppliers as they will be praised for purchasing from truthful production companies. could also work in a negative way as the environmental issues may not actually mean that the products are 'green' and therefore may result in companies wanting not to purchase from them.






Weeek 26- Ethics: Greenwashing and Production: Class Activity

BOARD

 Affects reputation of company, the board will be responsible for the press.
 They CAN & SHOULD inform and influence exec employees about the affect on the image of the company if it reached headlines
 CONSIDER affects on stakeholders, the future of the company and investments if they take a responsible approach and if they do nothing

EXEC EMPLOYEES

 IMPORTANT to them as how they handle the situation reflects their management abilities and therefore how long they will be in that position for.
 CAN & SHOULD have an integrated strategy to help remove the sins from all departments, educate employees
 CONSIDER the impact of completely removing the sins; what will be the positive against the negatives for the firm. Also removing sins will provide some challenges internally as change in one department will have an affect on another

FINANCE

 CAN & SHOULD Only accept contracts from those who agree to sustainable and ethical terms, i.e. no use of child labour in production.
 RISKS are the loss of business to competitors=
= less suppliers= higher costs= lower profit margins=lower for shareholders= less investment= cycle

MARKETING

 Held accountable for false promotion, can loose job if nothing is done
 CAN & SHOULD be more specific in marketing

IT

 Website SHOULD have a section on details, particularly in their CSR.
 COULD provide an online poll about what consumers want work with marketing and production to enforce changes.

SALES

 Only supply to shops that are actually green
 RISKS of loosing to competitors, profits will not be high, less demand for clothes in this sector. AFFECTS PROFITS

CUSTOMER SERVICE

 SHOULD & CAN take a stand for the consumers, else they will have more to deal with if issue are not dealt with.
Department: Customer Services
Sin: Vagueness

What does the sin mean to your department?
1. Confusion amongst customers leading to dissatisfaction with service/products, causing an increase in complaints to customer service dept.

What can the department do?
2. Push other departments such as marketing to clarify claim in advertising, promotion etc.

When should the department do it?
3. Very early in the product life cycles to prevent future negative perceptions by customers of brand/company for being dishonest which also lead lead to a lack of trust towards the company.

When making a decision about the sin what 3 things should they consider?
4.a. People (other employees, customers)
b. Profit (how it could affect sales in the longterm)
c. Environment

What are the risks?
5. - Company reputation
- Customer loyalty
- Decline in sales
- Customers shifting to competitors for similar products.

Department: Share holder

Sin 7 - fibbing - environmental claims that are simply false

What does the sin mean to your department?
1) - to trade on idea of an ethical company means company is an ethical alternative => attracting a certain type of share holders
- to be eventually found out as being unethical would damage company/brand image => decreasing share value
- if have a deeply integrated supply chain with say a sweatshop... Not only will image be damaged but to change their process will be costly and may lose economies of scale

What can the department do?
2) lobby for a change in management or threaten to sell shares.

When should the department do it?
3) withdraw shares of the company has no intention of changing the way they operate.

When making a decision about the sin what 3 things should they consider?
4) - draw up plan of action
- notify all shareholders/sort out who is on your side
- implement plan discreetly at first as to not damage image => allowing shares to be sold.

What are the risks?
5) could become public knowledge before chance of change.

=> confidence in company falls on stock market which leads to a fall in share price => possibility of a take over .

Politically loss if government grants.

What are the assumptions?
6) company is untrustworthy ?


Department: IT,
Sin: Sin of no Proof.

• What does this sin means to your department?
The use of IT in various stages of clothing production is aimed to reduce the product’s impact on environment, meaning the use of IT is actually contributes to clothing production with lower use of natural resources, eg. Use of IT to plan product production can reduce production of unnecessary clothing.

• What can the department do?
Use IT to the full advantage, throughout the product cycle, from designing to production. Eg use of machines to die the clothing at a minimum time and amount to improve clothing sustainability.

• When should the department do it?
IT department should aim to further implement the use of IT to various clothing making to selling stages and further improve already existent. Eg. Further implement the use of IT to market the clothing, reducing any emissions currently spent.

• When making a decision about the sin what 3 things should they consider?
When making a decision, IT department should consider the effects on customers, profits and environment.

• What are the risks?
The further implementation of IT, could further increase the reliance on IT, which could lead to the main sin of where the IT is really used to improve products integrity and what’s the proof.

• What are the assumptions?
The main assumption is that this and other departments are untrustworthy in the first place.

Department: Marketing
Sin: Worshipping False Labels

What the sin means to your department?
The department tries to create the impression, through words and images (i.e. labels), that a third-party green endorsement or certification has been given when no such endorsement actually exists, therefore misleading customers into thinking that the clothing has been through a legitimate green certification process. E.g. labels claiming the clothing to be made from certified organic materials…such as Fairtrade cotton?

What can the department do?
If the company is genuinely going ‘green’ and third-party endorsement is so important then the department should get the actual endorsement instead of faking it. Choose endorsements that are relevant to the product.

When should the department do?
From the start…?

When the department makes the decision about the sin, what 3 things should they consider?
1. The brand/company’s image – whether conveying a ‘green’ image is the actual aim
2. Consumers attitude towards eco-labels
3. What kind of endorsements would be appropriate/beneficial for the products?

What are the risks?
Creating a bad reputation for the company by damaging consumer trust. May result in fines/legal action?

Department: Production and Supply Chain Departments
Sin 2 - Sin of the Hidden Trade Off

What the sin means to your department?
• If we are to be sustainable and create 'Green' products then the whole concept would be green. We should not just produce our clothing products ethically and then transport them leaving a large carbon footprint when more efficient ways of transportation to the environment are available.
• Externalities from production need to be looked analysed. If we are creating outputs such as waste materials, pollution and other harmful outputs then they need to be controlled and a system integrated that cuts externalities to a minimum and eventually completely abolished.
What can the department do?
• Audit suppliers on a regular basis to check standards are kept up. Discontinue business with any supplier that does not conform to our strict policies regarding workers rights, safety and production techniques/waste disposal.
• Look for alternative forms of transport other than air freight.
• Pressure the design and development teams of our products to work with IT department and create a system to produce samples faster to cut lead times so we are able to send products by sea and not air.
• Audit factories and make sure all standards are in place before any orders are passed on for production.
• Look for alternative methods of production and look at every detail like a quality controller for production. Saving water, energy and time.

When should the department do this?
• Before any orders are taken have all standards and procedures in place.

When the department makes the decision about the sin what should they consider?
• People it effects
• Profit of the business
• Planet and environment

What are the risks?
• Lose business/profit/market share if our products dont get to the market in time due to transportation issues.
• Lose credibility if we're selling eco-clothing products that might physically be healthy for the environment but production and trnsport methods have not been environmentally friendly.
• Quality of product, time to produce and ship, price of alternative suppliers

What are the assumptions?
• There will be enough suppliers and they are all hungry for business so we will eventually find a supplier at our wanted price that will produce at the wuality levels we want and at the required time frames for order windows.
• Build contingency plans and buffer zones to allow for delays or problems.

Department: Finance
Sin 2: Sin of hidden trade off

What the sin means to your department?
– It ultimately can be seen as a waste of money. If the company is developing a product and saying it is green yet it is doing other harmful things to the environment, it is better to develop a product that it greener which may also help to lower costs.
– Could have an effect on levels of profitability if the consumer realises that the clothes are not as green as they are being perceived to be.
What can the department do?
– Restrict the amount of budget for the marketing and sales departments to prevent them promoting the product as green.
– Restrict or refuse give money to different departments
When should they do it?
– Preferably before the product is produced, if not before the product begins to be marketed
When the department makes the decision about the sin, what 3 things should they consider?
– Backlash from people in the company
– The reaction of customers and shareholders
– Any greener alternatives which can be provided to make the product much greener
What are the risks?
– If the money is cut to departments, they won't work. If nobody works the whole company doesn't make any profit. Therefore there is the risk of reducing profitability.
What are the assumptions?
– The CEO will be on the side of finance which would reduce the chance of backlash
– Refusing to pay workers will force them to come up with an all round greener product.
What one student thinks:
Within a Board team they make changes through the whole company in which they commit the sin of false labels, even before they get to the actual clothes they may try to make changes in their offices, and manufacturers that they claim is more green based on a narrow set of attributes without attention to other important environmental issues. For example they may change the Paper used in offices, which is not necessarily environmentally-preferable just because it comes from a sustainably-harvested forest. Furthermore other important environmental issues in the paper-making process, such as greenhouse gas emissions, or chlorine use in bleaching may be equally important. Within the clothes they may be asking the Marketing department to spin facts, making a product seem allot more natural and or fair trade then it is.
The Board are in a position of limited responsibility in which they pass down instructions and thus responsibility; however they should be responsible enough to make sure they don’t influence, force their workers to lie, spin or twist the truth for them, they should also make sure they police there organisation and weed out any people who would seek to be trying to trick the consumer.
The consumer should one have in place a system where they make sure they themselves are not pushing people into lying for them, and they are not forcing their subordinates to do anything un ethical they are not prepared to take full responsibility for. They should also make sure they are not influencing any of their team to make unethical decision to keep up with unreason expectations and targets set by the board. Lastly they should have a system of checks and balances in place to make sure they are in the know of what’s going on in their firm so try and weed out people that would seek to act in a unethical way.
The board risk acting ethically and stopping their firm acting from being profitable, even though no one is acting illegally, considering other firms may not be acting ethical but acting completely legally thus gaining a competitive advantage. It must be assumed that a balance needs to be found in which the Board are willing to take responsibility, its is assumed that when it comes to clothes especially, things will be rounded up and phrases such as mostly natural will be used, and consumers will not have too much of problem with this. False labelling and Lesser evils and trade offs, are likely to always be part of marketing it just balancing it so that consumers aren’t mislead.
The Board has to maintain honesty at all the time, they have a duty to their staff to always be honest and a duty to consumers to be honest, so when things are said or promised with no proof this can cause problems and is seen as unethical. For example an environmental claim that cannot be substantiated by easily accessible supporting information or by a reliable third-party certification. Common examples are facial tissues or toilet tissue products that claim various percentages of post-consumer recycled content without providing evidence. With Clothing it is likely promises will be based around, it being recyclable, comfortable, hard wearing and aerodynamic nature if its a sport product, or maybe warmth if it’s a jacket, however saying these things with no actual evidence is basically lying to the consumer.
The Board needs to make sure it checks over the Major promises the business is making and that it is validated, it must also make sure it entrust middle management with the promises they make as well. It must consider how bad the media could attack the board if the company is seen to make promises, however it would smart to not put the marketing team under duress, as everyone knows advertising is promoting a product and everyone will consider their product as the best, and exaggeration to someone may be enthusiasm to another. However the board hold the ultimate responsibility and should make sure they check most of the advertisement and websites and promises and make sure they are happy with them.
The Board has to be careful at the promises it makes to the staff and public and make sure they are no vague for example, they may claim something is ‘All-natural’ whilst they are not lying they know they are also implying they are “green however arsenic, uranium, mercury, and formaldehyde are all naturally occurring, and poisonous. ‘All natural’ isn’t necessarily ‘green’.
The department needs to highlight that marketing departments cannot be vague, and make sure the IT department websites are checked so the consumer isn’t being mislead. However the Board must look at making sure they are not putting a leash on marketers in which they cannot write anything without feeling they are misleading the consumer, however they have to make sure they are being ethical in their promises and realise that misleading a consumer is just as bad as lying. They should either stop saying something or if in this example of all natural and green, should make a effort to make their product allot more green. If it can be assumed they cannot make the product fully green they should highlight this and give percentages, maybe even video explanations on the websites of what they are trying to achieve, and the complications.
The Board must make sure consumers are getting useful information, saying things for no reason makes organisation look like bottom feeders, An environmental claim that may be truthful but is unimportant or unhelpful for consumers seeking environmentally preferable products. ‘CFC-free’ is a common example, since it is a frequent claim despite the fact that CFCs are banned by law.
The Board should have some control over the information they want to push and must make sure they are not influencing or forcing lower people in the business to tell the consumer information it does not need to hear, especially needs to make sure it sales people know this, because if a consumer is told information to find it is irrelevant they may feel they got tricked into buying something. The Risk are that other organisations will continue to do this, and it will make the organisation not look as good, however if an organisation can remain truthful it can expose others.
Boards can sometimes make hard decisions for the rest of the company and can lead to having necessary evils, however it is unethical for them to be covered up, as a sen deadly evil necessary evils is when there is a claim that may be true within the product category, but that risks distracting the consumer from the greater environmental impacts of the category as a whole. Organic cigarettes could be an example of this Sin, as might the fuel-efficient sport-utility vehicle. With clothes you likely to look at cheapness and outsourcing where there made, in the case of Primark and facing claims that they use child labour. However Boards should make sure they are honest and give consumers all the information because as appose to it just being ethical, when information leaks and people find out it can cause real negative PR.
The Department face risk of being more honest then all of its consumers and thus getting most of the flak in bare and negative pr if they are seen as doing nothing about it, however we live in a day and age where its allot easier to gain information so most organisation are found out sooner or later when they try and hide away “evils”.

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