Going Green: It makes good business sense
With concerns about the environment and global warming capturing the collective consciousness, more consumers are clamoring for eco-friendly and Green products. Sales of hybrid cars in the United States jumped from just 20,000 in 2001 to an estimated 345,000 in 2007. Sales of Green building products are expected to reach $4.7 billion in 2011, up from $2.2 billion in 2006. Organic-food sales more than doubled from 2001, reaching $16.7 billion in 2006. A survey by GfK Roper Consulting found that 87 percent of respondents expressed some concern about the environment, and 79 percent said a company’s environmental practices influence their buying decisions.
Businesses, large and small, are taking notice. Wal-Mart Stores Inc. created a large-scale sustainability program that includes working with laundry-detergent companies to use more concentrated formulas, resulting in smaller packaging and less waste. Nike Inc. pledged to reduce its carbon emissions as well as redesign its products to reduce footwear waste by 17 percent and reduce packaging waste by 30 percent. Dole Food Co. announced plans to make its banana and pineapple supply chain carbon neutral. Enterprise Rent-A-Car Co. says it’s planning to have a fleet of fuel-efficient and alternative-fuel vehicles in the future.
In conjunction with Earth Day, April 22, the federal government launched a Green Business of its Business.gov Web site, which includes a host of tools for small businesses to “go Green.” There are “Green tips” for small and home-based businesses, a new search widget for environmental regulations and business practices, and information on how to save money and the environment. There are also several new resources for Green vendors, Green product procurement and making environmental claims. This information includes state and local information and other material specifically relevant to minority businessowners.
There’s more to the Green trend than the simple premise of companies giving customers what they want, says Joel Makower, executive editor of Green
Biz.com, a Web site that covers the growing Green business market. The real reason companies are eliminating waste or reducing toxins, he says, is because it makes economic sense — saving money and improving the bottom line. If companies use less packaging, for instance, they pay less for raw materials, less for disposal and less in staff resources. “This is not just marketing. Companies are changing the way they do business,” Makower says. “They are actually doing more walking than talking.”
On the consumer side, a recent study by Ipsos Reid, a market research company, found that 70 percent of respondents called the Green designation “just a marketing tactic.” In addition, 44 percent said they would not pay higher prices for so-called Green products. Part of the reluctance to buy Green stems from perceived “green-washing,” the trumping up by companies of the environmental benefits of a particular product. A study by TerraChoice Environmental Marketing found that of 1,018 products that made environmental claims, all but one made claims that were either “demonstrably false” or that risked being misleading. According to TerraChoice, among the six sins of greenwashing are vagueness, irrelevance and no proof. For instance, when a company says that a product is chemical-free, it is considered a sin of vagueness because nothing is made without chemicals.
The term all-natural is also misleading, because there are plenty of things such as arsenic, uranium and mercury that are natural but hardly healthy. Adding to the confusion is that — unlike the term “organic,” which is highly regulated and can only be used for products that meet strict criteria — the word “natural” is not regulated at all. Many companies also promote benefits that are not unique, according to TerraChoice. A good example is chlorofluorocarbons, or CFCs, which have been illegal for about 30 years. So products such as oven cleaners, shaving gels and window cleaners that claim to be CFC-free are just like all the others.