Green or Greenwashed?
Opinions of Ken Beiser
When corporations or other vendors make claims about their environmental behavior, they are trying to make consumers think better of them. Why? They seek improved sales, differentiation from competitors, a positive image to help recruiting, or to gain favorable treatment from government, investors, or even lenders. Should we doubt their claims or accept what we are told? DOUBT!
Better environmental behavior usually requires hard work from businesses: Greater care in creating a good or service, greater care in procuring energy, and more diligence in selecting suppliers and assessing their green behavior. Doing this may cost more in the short term, or impose changes in packaging, product, design, delivery, look, feel, taste, shelf life, or other attributes. These alter consumers’ engagement with a product or service and so may put revenue at risk! If being Green might cost more, and change a product or service, businesses are going to be tempted to cut corners. This can include everything from lying outright (risky for high-scrutiny public companies) to taking actions that appear to be very green but are light green, or not green at all.
How to assess real green actions from greenwashed?
Read the actual words. Between the Federal Trade Commission, green watchdog groups, and consumer-protection lawyers, gross misstatements create liabilities that most corporate PR departments avoid: it is usually not worth their jobs. So look for the exact wording of such claims, which are almost always lawyer-vetted! Weasel-wording shouts “greenwashing”.
Read between the lines on Anheuser-Busch’s green targets: “Our ambition: 100% of our purchased electricity will be from renewable sources and we will reduce our carbon emissions by 25% across our value chain by 2025.” Points of suspicion: “Our ambition” is not a commitment, not a corporate goal. Something less. “purchased electricity” Does not include the electric power breweries generate using gas generators on AB InBev’s own sites.
In fact, Anheuser-Busch contracted in 2017 to acquire wind credits from a fully built wind project in Oklahoma. They claim this offsets 50% of their US-purchased electricity. This actual behavior is quite “light green”. Why?
The project is not an incremental addition to clean energy capacity because the project was already complete when the brewer contracted – so the decision to build pre-dated Anheuser-Busch’s commitment by 2-3 years. Anheuser-Busch’s action is not facilitating any additional new carbon reduction.
The project is not local. Anheuser-Busch’s breweries are spread far from Oklahoma so the wind farm does not deliver power to any of their breweries.
Transparent links to tie generation to delivery are absent. Virtual Power Purchase Agreements are real: Companies do contract to buy electricity at a point of generation and contract for deliver or trade for power at point of consumption. This deal does not do that!
The claim is a 50% offset, but this project defies intuitive facts: it includes no power usage, no energy efficiency, and no lowering of Natural Gas consumption. Breweries are huge users of steam, hot water and so, natural gas. If a brewer refitted its steam plants with electric boilers, that would be a real green action.
Real claims are incremental, local, transparent and intuitive. They acknowledge imperfections and incremental improvement.
Contrast this with Patagonia, the clothing manufacturer:
Yvon Chouinard, its founder, writes that Patagonia’s sustainability journey started small and accelerated over time: "We started with our products, using materials that caused less harm to the environment. More recently, in 2018, we changed the company’s purpose to: We’re in business to save our home planet." For years Patagonia has donated 1 percent of its sales largely to grass-roots environmental nonprofits. Chouinard has transferred company ownership to a trust and nonprofit dedicated to fighting climate change. Their recent commitments include their own product recycling/repair, procurement of recycled fibers for new products, and 100% renewable energy use. Additionally, they have chosen to reject selected corporate customers: one set for being prominent in backing big oil, another for supporting a hard anti-environmental congresswoman.
Real green claims are incremental, local, transparent, and intuitive.