By Corinne Blumsky
05 March 2009
Feeling green? Want to promote your greenishness? Beware. The Commerce Commission is coming down hard on try-hards and greenwashers. Corrine Blumskey of AJ Park has some sage advice for the good guys out there.
GREEN OPPORTUNITY KNOCKS
Businesses making ‘green’ claims in their advertising should do so with care. It is vital that claims made are accurate and can be supported by evidence. A phone call you don't want to receive is one from the Commerce Commission. Increasingly businesses are looking for an edge over competitors. We are told consumers are becoming more eco savvy. Not only are they looking for good quality, fair priced goods and services – consumers are also concerned about the environment. If you can claim your business is making a difference in the marketplace or in the world we live, you can steal a march on your competitors.
The media often comments on sustainable businesses and business practices. Businesses themselves are talking about their eco credentials. This practice has meant that business owners have had to become more aware of how their customers buy, use and dispose of goods and services. This sustainability trend has led to advertisers and marketers looking at what claims can be made when promoting products and services. For retailers, claims that the products they sell are low in green miles or have a neutral carbon footprint allow them to be part of the trend as well.
KEEP YOUR MARKETING CLEAN
“Greening your marketing” is the new push. Any business can engage in “green marketing”. Claims can be about: * the product or service * the packaging * the production process * the selling and distribution channel Claims can be made on packaging, in advertisements, in promotional and marketing collateral, and on websites. But claiming that you are “green” and actually being “green” can be two different things. Making misleading and unsubstantiated eco claims is called “green washing”. “Green washing” is potentially deceptive marketing designed to portray a company or product as caring for the environment, when the claims cannot be supported. If you get caught making such claims, you could face serious legal action. This recently happened to two businesses in Australia. Claims made in advertisements came to the attention of the Australian Competition and Consumer Commission (the equivalent of the New Zealand Commerce Commission). Both businesses were found to be in breach of legislation equivalent to our Fair Trading Act.
THE AUSTRALIANS WHO GOT IT WRONG
An advertising campaign launched by V8 Supercars Australia Pty Ltd said that 15,000 native trees would be planted to fully offset the carbon emissions created by the V8 series. They claimed the carbon emissions that would be offset included the transport of the racing teams, air travel to events and other activities, as well as the V8 series itself. The wording of the claim was considered to suggest or imply the trees would quickly absorb the carbon emissions. In fact, it would take several decades to absorb the carbon emissions from that year’s racing.
V8 Supercars Australia Pty Ltd was required to give an enforceable undertaking that:
* any future claims made about “green marketing” will be first vetted by a solicitor to ensure that it complies
* any future claim it makes about planting trees to offset carbon emissions will include an explanation about the time before those emissions will be offset
* the Commission’s concerns and the undertaking will be placed on its “Racing Green” pages of the V8 Supercars website.
GM Holden came under fire for its advertising campaign promoting certain vehicles in the Saab range using terms like “Grrrrrreen”, “Every Saab is green. With carbon emissions neutral across the entire Saab range”, “shift to Neutral”, and “Saab will plant 17 native trees on your behalf in the first year as a carbon offset”. The Commission felt these claims could mislead consumers about the carbon neutrality of motor vehicles in the Saab range.
During proceedings, GM Holden said that no vehicle in the Saab range was carbon neutral over the life of that vehicle. And that planting 17 native trees would not offset more than one year’s carbon dioxide of any Saab vehicle. GM Holden got off lightly. It was not required to do corrective advertising as the campaign was of a short duration, the campaign was more than a year old, and the continuing impact of the statements was considered limited.
CLOSER TO HOME
closer to home, a Wellington taxi company was recently warned by the Commerce Commission for publishing false and misleading information on its website in its “going green” campaign. The company claimed that its LPG cars “reduce CO2 pollution by up to 25%” and the Nissan Maxima 31/2 litre V6 petrol engine CVT transmission is 20% more fuel efficient than traditional automatic transmissions”. Given that these claims could not be supported, the company agreed to change its claims. The taxi company was also advised to change its compliance processes to ensure future representations were accurate.
NOT BEING GREEN IS COSTLY
Being caught “green washing” can be expensive. If your claims are found to breach the Fair Trading Act you could face a fine of up to $60,000 (for an individual) and $200,000 (for a company). But even more importantly if you have built a business on the back of a “green” platform, the adverse publicity you will face if found to have engaged in “green washing” could be disastrous to your business reputation. Care must be taken when engaging in “green marketing”. What you are saying needs to be assessed for its truthfulness. Claiming your product or service is “green” when other factors would clearly lead a consumer to consider your product or service “not green” need to be part of the mix. It is important to consider what you are claiming from the consumer’s view. And remember consumers are being educated about “green marketing”.
The Commerce Commission has said that it will be looking closely at sustainability claims in the next three years. This review will undoubtedly lead to guides being prepared by the Commission as it examines more claims about “green washing”.
USEFUL SITES
Meanwhile, useful information can be got from the Australian Competition and Consumer Commission website.
You also need to be aware of the code for environmental claims issued by the Advertising Standards Authority.The code applies to all advertising, including packaging shown in advertisements.
Another website to refer to is MED's eco-labels site. This website provides a list of eco labels and their owners, what each label represents and what are the conditions and standards of use of that label. It also tells you whether it is an international standard and whether they are any auditing requirements.
Be green, but take care. As “green marketing” grows so will the scrutiny of what is being claimed. Avoid being the subject of legal action by:
* seeking advice about what you can and cannot claim in your advertisements
* making sure that what you claim is true
* making sure that what you claim can be supported.
An edited version of this article was published in Celsias magazines May/June 2010 edition
conscious 240°
Ann Maron 15°
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