Truth in Advertising: What Does 'Green' Really Mean?

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Many companies and products claim to be green. But what does that actually mean? In some cases, labels are misleading. What exactly does it mean when a company, service or product goes "green"? Sometimes a lot, sometimes very little. The term has invaded thousands of press releases, advertisements and product labels, rightfully winning it the top spot on at least one list of the most overused buzzwords last year.

That didn't make the term any less trendy this year: There's a dumpster-full of recent news stories regarding industries and corporations presenting "green solutions."

The Philadelphia Eagles just announced their football stadium will be adding solar panels and wind turbines to its exterior, in an effort to generate about 30% of the energy Lincoln Financial Field uses while saving tens of millions of dollars. Toy-maker Hasbro says it will stop using wire ties next year, while ensuring up to 75% of its packaging comes from recycled materials, as part of its "commitment to sustainability." The magazine Constructech, quoting government reports, says new federal codes will soon require greater energy efficiency in residential and commercial buildings.

And at Denver International Airport, you can now park your car at what the CEO of Propark America calls the greenest parking lot in the world. According to the Denver Post, the new facility uses alternative energy sources not only for lighting and heating, but also to supply power to recharging stations for electric-powered vehicles.

Where Green is Really Gray

Of course, the term "green" implies environmental responsibility, the concept of using less energy and resources while creating less pollution and perhaps reducing your "carbon footprint" (another phrase on the overused list).

There can be a large gray area, however, when it comes to defining what a business really means by "green". A recent study by the environmental marketing and consulting firm TerraChoice found misleading information on 95% of consumer products that made claims to being green.

"There's this terminology now in marketing called greenwashing," says Dr. Bruce Hutton, professor of business ethics and legal studies at the University of Denver's Daniels College of Business. "Companies...using the concept of being green and environmentally friendly to sell products when, in fact, they might not be all that environmentally friendly."

Greenwashing doesn't have to involve outright lies. For example, a company may truthfully say that it uses organic, home-grown cotton. But if takes large amounts of water to process that cotton – and flies the material halfway around the world to process it – that company's claim of being "green" may ring hollow.

Greenwashing's Silver Lining

Dr. Hutton thinks greenwashing might have a silver lining. After all, it wouldn't be happening if consumers weren't already interested in preserving the environment. The greenwashers, he says, "wouldn't go to the trouble of trying to brand something, even if the branding is under false pretenses, if they didn't understand that there's a shift going on in the consumer movement."

And that shift appears to be growing rapidly. The 2010 TerraChoice study found 73% more "green" products in U.S. and Canadian markets, compared to last year.

Dr. Hutton also points to studies of how people chose between various products and brands. After looking at price, quality and availability, he says, consumers also consider a company's reputation on issues such as social responsibility -- including sustainability and the environment.

"The environmental issues that we face, with things like water, aren't trendy, " he says. "Those issues aren't arguable, so they're not going to go away. People are starting to care about this stuff. But they won't care about it forever if they think they're getting screwed. Sooner or later consumers figure out [if certain marketing is] some kind of a ploy, that's really not helping the environment and maybe costing them more money, and [those companies] will lose the trust of consumers on issues that are about the environment."

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