In the last blog we discussed how ‘greenwashing’ is a relative concept.  We continue with that concept by example and further develop the concept of ‘greenwashing’ and a potential strategy for your organization.  To demonstrate, let’s take for example, on one end of the spectrum, take a large organic farm.  Because it is organic one would immediately give it points for being green.  It does not use pesticides, etc. However, it is still a large farm and it will still use fossil fuels, etc.  If that organic farm is in California and only sells to New York, in which case there are a lot of fossil fuels involved for transportation, does that company rank as a greenwasher because it has a high carbon content relative to some other organic farms?  Does it fly under the radar of environmental organizations because it is a true organic farm? 

On the other hand, the polar end of the spectrum, take a small energy company using coal as a fuel.  Coal is assumed by most to be a ‘dirty’ technology and the concept of ‘clean coal’ a prime example of greenwashing.  However, the small coal company has taken out a loan and invested in some technologies to reduce carbon emissions by using algae to absorb the carbon dioxide.  Because this company uses coal it is much more likely to be targeted for greenwashing but the company is acting in an environmentally friendly way and the net environmental impact of both companies may be the same.

Working the procurement department as you do, you actually purchase from both organizations directly or indirectly.  How do you assess each company?  What are your criteria?  Are your criteria sufficient enough to match the environmental groups?  If you believe they are, are they enough to prevent your organization from being labeled as a greenwasher because you convinced your marketing organization to advertise about your green purchases?

To answer this question, you might employ a simple ratio.  Is the ratio of dollars spent by your organization to go green to the dollars spent to advertise going green greater than 1.0?  If the answer is, ‘Yes,’ then your organization is in a defensible position.  Your organization is attempting to do the right and good thing.  If your organization spends more money advertising its green activities than it spends in the implementation of green, then you are likely to be actively greenwashing.  In Procurement, as part of your Spend Analytics, you may be able to derive this ratio with the help of the marketing organization or your procurement colleagues that support the marketing organization.  This ratio, or one similar to it, is a first good step.

Behind this ratio still lies the requirement for your organization to be doing something and, further, that the ‘something’ needs to be increasing over time.  You can be rest assured that over a period of years, your marketing costs will increase.  Your green activities need to increase as well.  As always, being green, from a procurement perspective, is really two elements:  internal measures and measures with the supply base.  Those two measures are interlinked as your specifications can drive your purchasing behavior and your behavior can influence your internal actions.  The purchasing department can be the catalyst for change.  Recognize this fact as part of your greenwashing prevention campaign.  Let your entire organization know of your efforts.  Regardless of those efforts, your organization may still be accused of greenwashing.  The more green you do the better off your organization.  However, there is no certain standard.  You must be prepared to defend your organization’s claims of its environmental stewardship.

In closing this blog edition, we focus on the fact there is no standard.  If one references the seven deadly sins of greenwashing as currently listed on Wikipedia, one can derive a strategy for each.  Arguably, the procurement department can influence each of the seven.  However, of the seven, two stand out as being more directly influenced by the procurement team.  Those are the ‘Hidden Trade-Off’ and the sin of ‘No Proof.’  These two greenwashing sins account for most of the offences found in a study conducted by TerraChoice in 2007.  For both, the ‘sins’ has to do with sourcing of materials [e.g., is organic truly certified as organic].  In sum, your actions matter.  For the remainder of the greenwashing sins, the greenwashing trigger could be triggered by a relative measure.  Is your product relatively less green than another company’s but your claims are substantially the same as theirs?  As such, be aware the importance of what you do relative to other organizations within, or without, your industry.  To assist in determination of other’s actions, the topic of the next few blog editions will be common practices by government agencies throughout the world, in the US and then into large commercial enterprises.  The next few blog editions should help baseline your expectations of common activities within green procurement and purchasing.

Please continue reading the Green Purchasing Blog at [1] www.recyclechain.com with the next edition about Government programs for green procurement.