The following opinion piece is from an independent writer and is not connected with Greentech Media News. The views expressed here are those of the author and are not endorsed by Greentech Media. Greg Matusky is president of the public relations firm Gregory FCA Communications, which serves clients in greentech, among other industries.
This Earth Day, press releases aren’t just flowing from traditionally green businesses and environmentalists. With major companies such as Wal-Mart, General Electric and Google in on the act, it’s clear that something has changed. Businesses have come to realize – for the first time in history -- that reducing energy use can slice operating costs, increase efficiency and not just sustain the planet, but also sustain their own self interest in profit. In many ways, we have stepped through the looking glass, as business embraces clean technologies and, dare we say, environmentalism as keystones to profitability.
As with all great changes, opportunists will strike. Greenwashing and other abuses are a real threat to the continued success of new green technologies, products and services. The Federal Trade Commission’s recent attempts to establish green-marketing guidelines is an important first step in combating this threat by providing product manufacturers and marketers with standards and frameworks, and educating consumers as to the real nature of green.
It is not an easy undertaking. The relative environmental advantage of one product over another is fraught with nuances. For instance, if a new nonpetroleum motor oil requires a plastic bottle made from petrochemicals, is it really green? Or how about a company that claims to be carbon neutral, but only purchases carbon offsets for the electricity it uses and its employees commutes? What about the untold carbon emissions generated to build its offices, manufacture its computers and maintain its high-tech infrastructure? Somehow they are lost in the equation.
A recent study by TerraChoice Environmental looked at 1,753 claims of green consumer products and found a dismal 99 percent were guilty of greenwashing. The urge to misstate and hype is great when consumers are increasingly willing to pay more for cleaner, greener products.
One way to combat greenwashing is to make the business case that the authentic adoption of green initiatives comes with real economic benefits to business. Recently, a major real estate developer confided to a group of marketing professionals that he believed LEED was a passing fad and was unimportant to buyers. “In the end, all they want is the lowest cost per square foot with all of the amenities, regardless of whether there’s a green roof overhead,” he said.
The developer stuck to his guns until he came across two new studies: one from CoStar Group, the other from the New Buildings Institute (NBI). The reports established a correlation between green buildings and increased sales, rental and occupancy rates. They found LEED-certified buildings enjoy a rent premium of $11.24 per square foot, an occupancy increase of 3.8 percent and sales premium of $171 per square foot.
When the developer ran the numbers, he realized LEED could generate $3 million in additional rental income from a planned 300-unit condominium. And interestingly, he didn’t seek shortcuts or greenwashing as a way to get there. Rather, he led his organization to learn more about and embrace LEED standards and build to them. Will he promote this? Certainly. But he won’t greenwash, because he understands that perceived value is only created from genuine intent and effort. But what made sense to our real-estate developer was the profit calculus of green technology and implementation. Nothing more or less.
The CoStar and NBI findings also are important because they illustrate the impact of standards. LEED provides the vernacular for buyers and sellers to engage. By establishing benchmarks, value is set and realized. This again illustrates the importance of the FTC’s work, as well as industry groups who are working to establish green marketing guidelines.
Still, the urge to greenwash is evident all around. And it raises an interesting question: Is there a role in the innovation cycle for hype?
Consider the late 1990s and the expanding tech bubble that eventually popped, devastating investors. The height of the dot-com hysteria could be pegged to when two media organizations announced plans to bring 24/7 technology news to TV. My take at the time: No one, except the media, wanted or needed to watch news and stories about technology for all their waking hours. It seemed to me the dot-com mania had reached its tipping point. In retrospect, I was right.
Just recently, the Discovery Network announced plans for a $100 million 24/7 mainstream TV network about green. Will it be filled, as the tech TV networks were, with stories about grand technologies that have no real-world applicability? I think not.
It’s easy to compare the rapid growth of investment in green and clean tech to the dot-com era, but it’s also a flawed analogy. The issues of green today cut across more interest groups than that of technology in the late 1990s.
At the same time, though, tech’s early hype delivered some real value -- companies such as e-Bay, Amazon and others of the e-commerce revolution owe their existence to the era of irrational exuberance.
Without the chaos and overstatement of those early pioneers, the path might never have been blazed. Green will suffer some of the same fate, and greenwashing will have its day. But in the end, if it results in just one alternative energy that could reduce oil imports by half, contain carbon emissions and significantly reduce greenhouse gases, then managing those risks through regulation and industry efforts are well worth the rewards for businesses and for our planet.