How green are you?

01 July 2010
Retailers are looking at more ways they can 'green up' their goods and services.  The fashion industry is just one industry that has embraced this trend.  Coffee houses are another.  Increasingly, others are looking at how they can also use the 'green' trend to their advantage.

Watch those ‘green claims’

For some time now, consumers have been environmentally concerned and, in many cases, are choosing sustainable products over ones they perceive as being less sustainable.  ‘Green marketing’ is a real focus for many retailers, but getting it right takes care and effort. The Commerce Commission is concerned about the claims made by some businesses and is keeping a close eye on ‘green claims’.

As with any marketing, what you say needs to be accurate and truthful, and comply with the Fair Trading Act.  Other legislation and codes may also need to be complied with. 

Environmental claims can be a powerful marketing tool.  However, if you get it wrong you could cause significant damage to your business.  If consumers find out you are making untruthful or unsupportable claims, you can expect a public relations nightmare to descend upon you.


Being green can give you a competitive edge

As more consumers seek sustainable goods and services, smart and savvy businesses are looking at ways they can make green claims.  And many are doing so successfully.   Retailers like Kate Sylvester, Untouched World, Macpac, and Antipodes Water are actively promoting the steps they are taking to make their businesses sustainable.  Groups like the Sustainable Business Network provide a platform to discuss sustainable business practices.  Conscious Consumers is a group of café operators who are looking to promote what they are doing in their industry.  Certification programmes like CarboNZero provide tools and resources to help businesses measure, manage and mitigate their greenhouse gas emissions with credibility and integrity.

Coupled with this trend however, has also been a surge of businesses ‘green washing’.


What is ‘green washing’?

‘Green washing’ occurs when a business spends more time and money claiming to be ‘green’, than actually implementing business practices that minimise environmental impact.  It’s whitewashing, but with a green brush.

An example might be an energy company that promotes a ‘green’ technology they’re working on which only represents a small portion of the business’s otherwise not-so-green business.  Or it could be a company that makes claims it is a green but is marketing on the heels of an oil spill or plant explosion.

We have seen a significant increase  in businesses making green claims.  These claims come in a wide range of forms.  Environmental claims are now relevant to a larger product range, from small household items to major whiteware appliances.  Unfortunately not everyone making green claims has been truthful.  This has led the Commerce Commission to issue guidelines for businesses wanting to use green claims in their marketing.   These guidelines provide a useful reference point for businesses wanting to better understand how to comply with the Fair Trading Act.  You can read them online at: www.comcom.govt.nz.


The guidelines in a nutshell

It is important that all retailers understand their obligations under the Fair Trading Act, especially if you’re making environmental claims in your advertising and promotional material.  A green claim can breach the Act in one of two ways—either as misleading and deceptive conduct, or as a false or misleading representation. 

The Fair Trading Act applies to all forms of advertising when it comes to making environmental claims.  This includes packaging, labelling and all forms of advertising and promotional collateral, including your point-of-sale, website and customer newsletters.

You should be careful to ensure the overall impression you create about the products you sell is not misleading. 

Generally a claim should:

  • be honest and truthful;
  • detail the specific part of the product or process it is referring to; 
  • use language which the average consumer can understand;
  • explain the significance of the benefit; and
  • be able to be substantiated.


Don’t forget that pictures can also be representations.  Some pictures may suggest environmental benefits or advantages to consumers and must be used with care. 

Where the scientific basis for your claim is under dispute or not clear, you should be careful not to present your claim as being universally accepted.


Watch those words

Think about the words you are using.  Make sure you can prove any statements if called upon to do so.  Use the following words and phrases with care.

  • Environmentally friendly.
  • Environmentally sage.
  • Energy efficient.
  • Recyclable or recycled.
  • Carbon neutral.
  • Renewal or green energy/electricity.


Also consider carefully your company or trading name.  If your company or trading name implies you have green credentials that do not exist, they could be misleading. 

You should not represent that the goods or services you offer have any sponsorship, approval, endorsement, performance characteristics, accessories, uses or benefits that they do not have. 

Taking simple steps can avoid a breach of the Fair Trading Act.  Often the devil is in the detail.  Put in place a checking system to ensure that your marketing materials do not breach the Act. Testing your claims against the Commerce Commission guidelines may help you remove any misleading impressions. Also get your lawyer to check your promotional material.

Consumers rely on any environmental claims you make and they expect those claims to be truthful.  The ‘green’ trend can be used as a powerful marketing tool to differentiate yourself in the market place.  However, if you get caught ‘green washing’ it can be expensive, and cause significant damage to your reputation.

Be ‘green’, but take care.  We expect the scrutiny of environmental claims will grow with the trend itself.

An edited version of this article was published in NZ Retail, June 2010.

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