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Corporate Greenwashing vs. Real Environmental Concerns

My column last week produced some interesting reactions among readers, and I wanted to follow up before leaving the subject. (See: China, Emerging Markets Ready to Pay More for Green Products.)

As reported then, a DHL study of 1,002 respondents found that Asians were 30 percent more likely than North Americans to pay higher prices for environmentally shipped goods. But readers wondered — and DHL left out — why Asian consumers, and DHL, were suddenly so virtuous. Were the respondents being honest, and was DHL greenwashing?

There's more evidence surfacing to flesh out the story. As DHL was announcing its consumer study, Australia’s Reputex, a consulting firm specializing in carbon emissions risk, released similar research on the corporate side of the matter. In a look at 300 Asia/Pacific corporations, conducted along with Standard and Poor’s Australia desk, the consulting firm claimed to have found Asian companies running cleaner than competitors. “Potential for carbon 'leakage' appears much lower than in other regions,” Reputex claimed, adding that “only 5% of respondents in Asia Pacific would consider relocating production facilities to an unregulated market, versus 17% of companies in Europe.”

“The results of the survey,” concluded Standard and Poor’s, “indicate that respondents view the incremental cost of creating a solid carbon-management strategy as trivial in comparison to its potential value in acquiring competitive advantage.”

If true, the Reputex/S&P claim would reveal greening in Asian corporate spending that DHL could identify but couldn’t really demonstrate in consumer spending. The Australian study also ties the increased corporate attention directly to supply chain concerns. When corporations in Asia looked to manage costs for environmental improvement, according to Reputex, they saw that “supply chain (63%) and electricity-related cost increases (34%) together combine for 97% of all carbon liabilities.”

Keep in mind that the Reputex survey only included companies listed on the S&P. So unlike DHL’s consumer study, we can probably throw out public spiritedness as a primary motivation for respondents to swallow increased costs. DHL’s consumers might make good on their promise to researchers, and pay more for their shipping to save trees. Publicly held Asian companies, facing quarterly earnings reports, are presumably less sanguine about the millions needed to reorganize and retool for cleaner operations. The shippers also appear willing to spend more in the long term, it appears. But they'll do so, the new research suggests, to save the other kind of green.

A summary of the Reputex report is here. It identified corporate concern with carbon cost risks to be highest, among Asian countries, in Malaysia, India, and Japan.

10 comments on “Corporate Greenwashing vs. Real Environmental Concerns

  1. Barbara Jorgensen
    October 26, 2010

    Thanks for digging deeper on this. My skepticism has been answered–somewhat–and it's good to see two analyses back up this trend. I'd still like to know how much more corporations and/or consumers are willing to pay for greening, and on the corporate side, whether this makes them more competitive or less competitive in the short term. But the dialog is flowing and that is a great start!

  2. Steve Saunders
    October 26, 2010

    thsi story gets more and more interesting. So now we have the countries that i thought were the worst polluters actually being the greenest, and corporations being more green than their consumers.

    Basically this turns all my assumptions about this stuff on their head (no bad thing).

    Thanks for the follow up.

     

     

  3. Ariella
    October 27, 2010

    The article mentions DHL, but I recall seeing something about UPS and environmental initiatives, so I looked it up at http://www.ups.com/ecoresponsible which presents UPS as a the bearere of the green stamp of approval.

    It says: “You've seen the Eco Responsible Packaging Program logo on a package shipped with UPS and you are curious about what it means. It signifies that the company who shipped this package cares about conservation and protecting the environment. More specifically, it shows that this company passed a comprehensive UPS evaluation of its packaging processes and that the company has received approval to affix this label to every package that it ships using these practices.”

    The slogan, “Want to make a greener choice? We can get you started.” appears on  http://www.ups.com/bussol?loc=en_US&viewID=productView&contentID=ct1_solg_sol_pkg_eval

     it explains: “ You've seen the Eco Responsible Packaging Program logo on a package shipped with UPS and you are curious about what it means. It signifies that the company who shipped this package cares about conservation and protecting the environment. More specifically, it shows that this company passed a comprehensive UPS evaluation of its packaging processes and that the company has received approval to affix this label to every package that it ships using these practices.”

     

  4. Marc Herman
    October 29, 2010

    Thanks for the continuing comments (I've had some connectivity issues the past few days; sorry about the delay in replying). Bottom line I wonder what happens when everyone is so convinced that “green” imagery helps sales, that everyone has it. At that point you have to distinguish your light greens from your deep greens. (Like “diet” food, right? Like, there's Diet cola, but “healthy” fruit, but also “recommended by the Heart/Lung/Healthy Elbows and Eyelashes Coalition…” and then there's “low in fat!” Good luck with that.)

    In the case of the DHL study, I don't doubt there's good business sense but also an earnest desire to run cleaner. I also don't doubt they had to be dragged into it by their heels, at a very late date. So I'm suspicious that any labeling, regulatory or other regime under which supply chains will increasingly function, will have to be viewed, tragically, with a bit of a police perspective. Somewhere in here there's a great metaphor about holding someone's feet to the fire they started, but someone more poetic than I am will have to discover it.

     

  5. Marc Herman
    October 29, 2010

    Re: Steve's comment about being flipped on his head. Yeah. Funny thing about that. My strong impression is that environmental attitudes are very difficult to generalize about, even within nations (Japan's corporations care more than Indonesia's….really? How do you measure that?). Regulations, and changing costs, do seem to be creating similar responses in otherwise dissimilar places, however. To me the key fact was that two things — supply chain costs, and the electric bill — make up such a whopping percentage of carbon liabilities for anyone doing business in Asia. That suggests to me that there's hope of finding solutions that cut across national and sub-regional boundaries. Usually I'd suspect that you can't really apply what works in Bangladesh to Malaysia, and what works in Malaysia to Mongolia. But maybe in this case, in at least a limited way, you can. This is going to be an ongoing theme in this space. Thanks again for replying.

  6. Ariella
    October 29, 2010

    Marc, your mention of diet cola reminds me of what struck me as absurd:  Coca Cola's attempt to market itself as a healthy choice because it provides hydration.  Forget about the fact, that along with the water, you get a lot of other stuff that you don't need.  When it comes to “green,” just about anyone can claim to be devoted to a clean environment — even manufacturers of non-biodegradable plastic packaging. (I looked it up for a writing job I was working on.)  So long as the solvents used do not harm the environment, they comply with the Clean Air Act, and ignore the fact that all those plastic bags will likely end up in a landfill after the product they contain is consumed.   Frito Lay, I believe, recently ceased its earth friendly packaging because the material was very crinkly and made a disturbing amount of noise.  Sometimes it really isn't easy being green. 

  7. Ariella
    October 29, 2010

    Marc, your mention of diet cola reminds me of what struck me as absurd:  Coca Cola's attempt to market itself as a healthy choice because it provides hydration.  Forget about the fact, that along with the water, you get a lot of other stuff that you don't need.  When it comes to “green,” just about anyone can claim to be devoted to a clean environment — even manufacturers of non-biodegradable plastic packaging. (I looked it up for a writing job I was working on.)  So long as the solvents used do not harm the environment, they comply with the Clean Air Act, and ignore the fact that all those plastic bags will likely end up in a landfill after the product they contain is consumed.   Frito Lay, I believe, recently ceased its earth friendly packaging because the material was very crinkly and made a disturbing amount of noise.  Sometimes it really isn't easy being green. 

  8. Steve Saunders
    October 29, 2010

    Hi Marc,

    My Aisa attitudes performed another flip today after reading the article in the NY Times about rare earth exports from China. It was accompanied by a picture of about 100 tons of rare earth (potentially radioactive, definitely poisonous) just sitting on a dock ready to be shipped to the US!

    http://www.nytimes.com/imagepages/2010/10/29/Rare.html

     

  9. Ariella
    October 29, 2010

    Now that is scary.  Are there no regulations for screening and safely containing what is mined before shipping it?

  10. Steve Saunders
    November 2, 2010

    well, it's China. So no.

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