Corporate Knights

By Laura Zizzo and Travis Allan

Many consumers wonder if they should believe products’ environmental claims. Consumers are educating themselves and fighting back against greenwashing, and lessons from these fights can help inform consumers about climate claims—claims made about the amount of greenhouse gasses emitted or avoided in the production, use and disposal of a product.

Consumers’ increasing education about environmental issues can be seen in the North American markets for voluntary carbon credits. Carbon credits represent a measurable and tradable reduction of greenhouse gas emissions from the atmosphere. In voluntary carbon credit markets, North American companies and individuals can voluntarily buy and sell carbon credits, These markets are active even though Canada and the United States haven’t set up a mandatory carbon trading scheme. As the markets for voluntary carbon credits mature, consumers are educating themselves and demanding higher quality carbon credits and third-party verification. Credit providers are responding.

Truth in Environmental Claims

A trip through stores across North America has changed a lot in the last couple of years. Products with claims like “New and Improved” and “Fast Acting” are rapidly ceding shelf-space to competitors that are labeled “Green”, “Natural” or “Carbon Neutral”. While businesses are trying to adapt to consumers’ growing environmental focus, these practices raise concerns about greenwashing. You aren’t alone if you’ve wondered, “Is it all just hype?”

The short answer is that not all environmental claims are hype, There are socially responsible companies offering superb environmentally conscious products. Unfortunately, there are also charlatans trying to make a quick buck off of consumers who want to do the right thing with their purchasing power.

The general rules on truth in advertising in Canada, which are contained in the Canadian Code of Advertising Standards, are clear: advertisers must be truthful about the claims they make to consumers. This includes environmental claims. Companies can follow these standards by making specific and accurate environmental claims that are supported with good evidence. Unfortunately, not all companies have taken this approach.

Ottawa-based marketing company TerraChoice Environmental Marketing has done a fantastic job of setting out common greenwashing tricks to look for.

TerraChoice’s “Seven Sins of Greenwashing”--an excellent set of categories to use if you want to evaluate environmental claims–-include
1) hidden trade-off - focusing on one green point at the expense of another (for example, a manufacturing process that emits only a small amount of greenhouse gas but uses a lot of bleach and solvents)
2) no proof – a claim you can’t easily verify
3) vagueness – a broad or misleading claim that isn’t as green as it sounds (for example mercury and arsenic are technically “natural”)
4) worshiping false labels – suggesting that a person or organization endorses the product when they don’t
5) irrelevance – a claim about some green aspect that had to be there by law anyway (such as no CFCs) or is unimportant because it applies to all of the products in that category
6) lesser of two evils – a claim that is true in comparison to other products in the same category, but risks distracting consumers from the broader environmental issues of using the product at all (like plastic water bottles that use 30% less plastic)
7) fibbing – false claims

The Greenwashing Index is another important development in eco marketing. The Greenwashing Index allows visitors to post, rate and discuss ads that make environmental marketing claims. Based on the votes of site users, the site assigns a score from “Authentic” to “Bogus.” Some of the comments that go along with the votes are well informed and can serve as a good place to start your research. Comments relating to an advertisement put out by the Malaysian Palm Oil Council, for example, link to a report by UK NGO Friends of the Earth on palm oil, a Forbes article on the commercial, and an Advertising Standards Authority complaint about the commercial in the UK. As with all open-access sites, though, you have to take comments with a grain of salt.

These sites encourage the single most important defense to bogus greenwashing claims: educated consumers, who can reward the legitimate companies and send the right message to the fraudsters.

Truth in Climate Claims

In North America, sellers of consumer goods aren’t required to report their carbon emissions on their packaging, so if a product has a label about carbon or carbon credits, it’s there voluntarily. But sellers of carbon credits or products advertised as low carbon still have to be honest about what they are selling.

The David Suzuki Foundation and the Pembina Institute put together a helpful report in 2009 called Purchasing Carbon Offsets: A Guide for Canadian Consumers, Business, and Organizations. The guide goes through things you should ask before buying an offset (which is a type of carbon credit) and then ranks a number of the big carbon credit sellers based on some important criteria, including auditing and permanence. Auditing means that a third-party checks that the carbon credits are legitimate, while permanence refers to whether a credit is just temporary, or results in a permanent removal of greenhouse gasses from the atmosphere (or avoided emissions). If this is an issue that interests you, you’ll find the full report, the executive summary, or this summary useful.

We’ve compiled the following list of issues to think about based on the Suzuki/Pembina report and our own experience dealing with carbon credits:

1) Can you do without or with less of the underlying product, such as airplane travel? (Conservation is the easiest way to reduce your GHG emissions).
2) If you see a “carbon neutral” claim, ask both yourself and the seller, what is carbon neutral about this product? Is it just the use of the product? What about the creation, maintenance and disposal of the product?
3) Who stands behind the carbon claim or credit? Is there a credible and independent 3rd-party verifying the claim? (Thankfully, this is becoming more common).
4) Does the seller have a system to make sure that the credits aren’t used more than once? Generally, sellers promise to retire credits, which means to list them as sold or used and to make sure they aren’t counted again.
5) Advanced: are the offsets made in accordance with one of the reputable independent standards such as the Gold Standard, CDM or VCS?
6) What type of project are the credits from? There are many ways to reduce carbon in the atmosphere and people have strongly different opinions about which ways are best (renewable energy, landfill gas recovery and forestry projects are some of the most common). On a gut level, are you comfortable with the type of project your purchase is supporting?

Laura Zizzo and Travis Allan are partners at Zizzo Allan Climate Law LLP, a law firm focusing on climate, environmental, energy and clean-tech law and policy.