The truth behind ‘green-washing’

Today Online 30 Jun 08;

INCREASING awareness among consumers is making some companies change or rethink their green initiatives.

But, some firms are not being as honest as others.

“Green-washing”, or washing the company with false green initiatives, has been an up-and-coming trend among those looking to ride on the back of recent environmental interest.

However, Adjunct Professor Bob Fleming of the National University of Singapore Business School said: “It’s not as bad here as it is in some other places.

“In the United States, 70 to80 per cent of the products are claimed to be green-washed. Here, it’s a lot less — about 20 to 30 per cent of the products. But a lot of it, I think, comes somewhat out of innocence, in that people just make claims without any substantiation.

“Unless there is some kind of certificate associated with it, it doesn’t make a lot of sense. Singapore has an environmental green label that they apply to products. Standards are a little bit loose, but it is better than nothing and its a step in the right direction.”

Industry players said that green-washing can range from the institutional level, right down to the product cycle. For example, these include products claiming to be biodegradable, but which do not state over what period of time.

Green-washing might seem the easier thing to do, but some analysts warn that in the long run, it will have an impact on branding and reputation.

Mr Benjamin Sovacool, Post-Doctoral Fellow at the Lee Kuan Yew School of Public Policy, said: “Well, I think there are possibly three types of impacts, some in the short term and some in the long term. The most immediate impact would be reduction in their worth of shares and the value of the company, and this is connected to public backlash.”

Green-washing can also lead to investor questions over a company’s corporate governance. So, some industry watchers said it might be best to come clean right from the start.

Mr Bob Grove, Edelman’s Managing Director for South-east Asia, said: “It is important that you get back to your stakeholders and tell them what it is you are doing. But within that context, many companies have been accused of green-washing and that means that they are overstating their case about what they have been doing. So, transparency is key.”

For those companies already “in the green”, they may have gained themselves a headstart, as experts said incorporating green or eco-friendly strategies into a business will soon be a must. — CHANNEL NEWSASIA