Greenwash fails to cover ethical cracks for Britain's consumers

The Times
February 26, 2009

Marcus Leroux
The ethical and environmental reputations of leading DIY, furniture and garden retailers has fallen across the board, according to a Populus poll for The Times — despite a veritable blitz of green initiatives.
Every home or gardens retailer featured in the poll suffered a fall in how ethically aware consumers rated their behaviour.
The findings come amid fears of a “greenwash” in companies' marketing of their environmental credentials. The Times recently reported that the Advertising Standards Authority, the advertising watchdog, was cracking down on spurious green claims regarding, for example, carbon neutrality.
David Lourie, an analyst for Good Business, the ethical consultancy, said that the decline in ratings by concerned consumers of their social and environmental conduct is a symptom of the economic climate. He said: “Consumers are more nervous and less trusting of companies. People are withholding their belief until they have sorted out what is greenwash and what isn't.”

He added that the desperation of retailers to be on-message on environmental and social concerns, such as the use of child labour, meant that they were saying what “sounded right”, even if it was some way from the truth, and the cloud of mistrust obscures even the activities of well-meaning companies. “As customers become more suspicious, companies need to be more careful about how they talk about their environmental or social standards,” he said.
Industry “kitemarks”, such as the Forest Standards Council, which guarantees that timber comes from a sustainable source, can help to restore trust — yet the survey found that awareness of the FSC had stalled. Slightly less than a third of consumers had heard of it, the same figure as last year.
Mr Lourie said: “A universal standard that is recognised by the industry is a good way to go, as it informs consumers and forces the laggards to buck up their ideas, while allowing the market leaders to push the whole area forward.”
Information is also a critical factor. Nearly 80 per cent of concerned consumers do not believe that they have sufficient information on the environmental and social impacts of goods to make an informed choice. More than 90 per cent would find it useful to have more information on recycling — a demand that may be difficult to meet because of the variance in rules on what can be recycled between different councils.
Mr Lourie said: “Customers lack information that would help them to make an informed decision. Lots of environmental measures have been taken already, but are not communicated well.
“Value is the No 1 factor for consumers at the moment, but at the same time, if you can deliver value, your differentiator can be the environmental and social factors that are already inherent. That will help you to stand out.”
About 80 per cent of concerned consumers believe that companies have some responsibility for the disposal of old furniture. Homebase provides such a service, but, after the imposition of European regulations, such as the Waste Electrical and Electronic Equipment Directive, there is likely to be growing pressure for others to follow. The directive obliges producers to finance the collection, treatment and recovery of products.
Among the top concerns for consumers was the use of child labour — even though the home and garden category, unlike the clothing trade, has not been struck by controversy on the subject.
Mr Lourie said: “This shows that issues that are affecting other sectors or industries, like the fashion industry or whoever else has been tarred with that brush, are of concern to consumers, even if they have not arisen. It means that if an issue does crop up, it could do extraordinarily serious damage.”
In 2007, home and garden centres were at the centre of the controversy over outdoor heaters, which were attacked for their energy use. This year, B&Q stopped selling wind turbines, which allow homes to generate their own energy, thanks to concerns they did not work well enough.
David Cameron, the Tory leader, installed one. B&Q had hoped that the law would be changed to allow the windmills to be installed without planning permission.
B&Q recently opened what it said was its greenest store in New Malden, southwest London, which features Britain's largest building-mounted wind turbine and ground-source heating. Kingfisher, the owner of B&Q, said that it hoped its features would reduce the store's emissions by half.
It sells loft insulation for £1 a roll, a fraction of the normal price, which is subsidised by British Gas under the Government's carbon emissions reduction target scheme.
Separately, nearly 75 per cent of concerned consumers said that packaging on an Easter egg was one of the main factors in a purchasing decision. In recognition of this trend, Nestlé said last week it had reduced packaging on its Easter eggs by 30 per cent, saving 700 tonnes of waste.
Make the most of what you have Giles Gibbons: Viewpoint
When times are tough, make the most of what you have. Companies must extract every iota of value from existing assets, rather than investing in the acquisition or creation of new ones. It is the corporate equivalent of finding forgotten goodies in the attic — particularly pertinent to many of the home-and-garden companies that are the focus of our survey this month.
B&Q is a case in point. It has a significant untapped asset. Here is a company that has been investing seriously in its social and environmental performance for years. It spearheaded the move towards sustainable timber use that has become widespread. Initiatives such as B&Q's One Planet Home moves it closer to the attic door, but for many it is still in the attic.
It is about time that stories such as these saw the light of day. Of course, when times are tough, consumers' primary focus is on value, but this does not mean that they immediately cease to care about anything else. As they consider each purchase decision more carefully, it becomes ever more important for the retailer to remove any factors that could tip the balance into a decision not to buy.
And this includes ethical qualms and doubts. In the survey this month 80 per cent of consumers said that they were concerned about the use of child labour in the production of home-and-garden products.
It would not take much. These times do not lend themselves to the loudspeaker approach, even if the marketing budgets were there to fund it. Much more appropriate, and eminently cost-effective, would be for companies that have values to start making them evident to consumers at the time and place of the purchase decision. This means making the most of in-store space and existing brochures and mailouts, thus providing added reassurance to consumers that not only are they getting value, but they are also getting values to which they adhere.
In these frugal times, every asset should be made to count.