Transcript Green Marketing

Green Marketing
What is it?
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Using claims about a product's
environmental "friendliness" in order
to promote the product
Examples of “green” advertising
claims?
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biodegradable
compostable
recyclable/recycled
environmentally safe
ozone friendly
Why do companies use it?
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Research shows that consumers
prefer--and are willing to spend more
money on--products they perceive as
environmentally safe
More than half of American
consumers have purchased a product
because of a label that said it was
environmentally safe or
biodegradable
Are there problems of deception
with “green” claims?
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Keyes Fibre Company's claims for Chinet
disposable tableware
• biodegradable
• compostable in municipal solid waste
composting facilities
• Recyclable
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In fact, according to the FTC
• Won’t degrade in landfill
• Few municipal composting facilities
• No facilities accept it for recycling
Why are consumers fooled by such
claims?
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consumers generally can't tell
whether a product will do what the
advertiser claims
• degrade in a landfill
• not deplete the ozone layer
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even if the claims are true, it may
not be evident for five, ten, fifty or
more years
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As a result of concerns about
growing use of such claims, the FTC
issued Guides for the Use of
Environmental Marketing Claims
What do the Guides cover?
Any way in which a message can be
received
 labeling
 advertising
 promotional materials
Any form a message can take
 words
 symbols
 emblems
 logos
 depictions
 product brand names
260.6 General Principles
(a) Any qualifications or disclosures
should be sufficiently clear,
prominent and understandable to
prevent deception
(b) Claim should make clear whether it
applies to the product or the package
(c) Claims should not overstate the
environmental attribute or benefit
260.7 Environmental Marketing
Claims
(a) General claims (e.g., “eco-safe”)
must be
 not misleading
 substantiated in advance of the claim
• burden of proof on advertiser
(b) Claims of degradability,
biodegradability, and photodegradability
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are deceptive unless there is
scientific evidence that the entire
product or package will completely
break down and return to nature (i.e.
decompose) within a reasonably
short period of time
(c) Claims of compostability (of the
product or package)
 are deceptive unless all the materials
in the product or package will break
down into usable compost in a safe
and timely manner
• in an appropriate composting facility; or
• a home compost pile
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are deceptive if
• the item is not compostable in a home
compost pile; and
• there are no institutional or municipal
composting facilities in the community
where the item is sold
(d) Claims of recyclability
 are deceptive unless the product or
package can be collected, separated or
otherwise recovered from the solid waste
stream
• for reuse; or
• in the manufacture or assembly of another
package or product
• through an established recycling program
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If only part of a package or item is
recyclable, any claim of recyclability
must be adequately qualified to
avoid consumer deception
A claim of recyclability is not
deceptive if only minor, incidental
components are non-recyclable
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Claims of recyclability have unique
potential for deception because
not all communities have recycling
facilities
not all facilities recycle the same
products and packages
As a general rule, use of the term "recyclable"
and/or use of symbols that imply recyclability are
deceptive
 unless collection sites for recycling the material
are available to a substantial majority of
consumers or communities
 even if collection sites are established in a
significant percentage of communities or
available to a significant percentage of the
population
 unless the claim is qualified to indicate the
limited availability of recycling programs
Symbols that imply recyclability include
 three chasing arrows
• FTC Guide says that, unless qualified, it means
product or package is made of recycled
materials as well as being recyclable
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SPI symbol
• code developed by the Society of the Plastics
Industry to indicate the type of plastic from
which product is made
• numbers run from 1 to 7
Qualifications that adequately notify
consumers of limited availability of
recycling programs include
 "This bottle may not be recyclable in your
area"
 "Recyclable in the few communities with
facilities for foam polystyrene cups"
 providing the approximate number or
percentage of communities or population
to whom programs are available
(h) Claims relating to the preservation
of the ozone layer
 For example:
• ozone safe
• ozone friendly
• contains no CFCs
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are deceptive if the product contains
any ozone-depleting substance
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Problem: all ozone is not alike:
ozone layer in upper atmosphere is
necessary to prevent sun's harmful
radiation from reaching earth
ozone at ground level forms smog
• can cause serious breathing problems
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"ozone safe" products should not
harm the atmosphere at either level
Green Power
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Green marketing heavily used in
electricity generation/marketing
What is green power?
electric power that is
• generated by renewable resources
• less polluting than fossil fuels and
nuclear power
What types of power are “green”?
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Wind
Bioenergy
Geothermal energy
Solar power
Hydroelectric power
Why is green power attractive to
consumers?
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Electricity generation is largest industrial
polluter in US; currently produces:
two-thirds of the annual U.S. emissions of
sulfur dioxide (main cause of acid rain)
30 percent of the nitrogen oxide emissions
(stress forest ecosystems; combine with
organic compounds in sunlight to form
smog)
40 percent of carbon dioxide emissions
toxic-metal emissions (mercury and lead)
nuclear waste.
What are the “dirtiest” energy
sources?
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Coal
Oil
Nuclear power
Natural Gas
What are the green power options?
1. Green Pricing
 Consumers do not have to change their
electricity provider
 Customers choose to pay a premium on
their electricity bill to cover the extra cost
of purchasing clean, sustainable energy
 As of March 2003, more than 300
electricity providers in 32 states have
implemented green pricing options or
announced plans to do so
 Green Mountain Power’s Coolhome,
Coolbusiness
2. Green Marketing
 Sale of green power in competitive
markets; consumers have option to
choose among suppliers and service
offerings
• like choosing long-distance telephone carriers
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As of October, 2003 green marketing was
available in nine states
• all in the northeast except Texas
• not in Vermont
3. Green Tags
 Tradable Renewable Certificates (TRCs)
represent the environmental (non-power)
attributes or benefits of renewable electricity
generation
 consumer pays for the benefit of adding clean,
renewable energy generation to the regional or
national electricity grid
 provides same environmental benefit as
purchasing green pricing or green marketing
product
 provide “green” option for people in states
where green pricing/marketing not available
Consumer Protection Issues in
Green Power
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When power flows from the
generator to your house, electrons
get mixed together on the wires
• You can't specify which electrons you
get
• you can't know for sure if they are being
generated by "green" power sources
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A number of mechanisms have been
established to avoid consumer
deception
1. Voluntary certification
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Green-e
Establishes consumer protection and environmental
standards for electricity products, and verifies that these
products meet the standards.
Standards include:
50% or more of the electricity supply comes from one or
more of these eligible renewable resources: solar, wind,
geothermal, biomass, and small or certified low-impact
hydro facilities
if a portion of the electricity is non-renewable, the air
emissions are equal to or lower than those produced by
conventional electricity
there are no specific purchases of nuclear power, and
the product meets the Green-e new renewable requirement
2. State standards
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In 2002 Illinois established a "green power
standard" for green power claims. The standard
establishes three tests:
100% of the power must come from new clean
power sources (i.e., coming online after January
1, 2002)
at least 2/3 of the power must be produced by
wind or solar energy, with the remainder from
other renewable energy sources such as landfill
gas, small hydro, and biopower
the power purchase must create clear air quality
benefits for the Illinois airshed
3. National Association of Attorneys
General (NAAG)--Environmental
Marketing Guidelines for Electricity
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Provisions include:
term "green" and other similarly general
statements of environmental benefit should be
used with caution; every implied representation
of environmental benefit must be substantiated
term "clean energy" means energy whose
generation does not cause significant emissions
a "renewable" energy source is one which is
naturally replenishable and is replenished on
some reasonable time frame
Green Power in Vermont
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Apparently the only green power option
available in Vermont is Green Mountain
Power's Cool Home project
Customers make a $6 monthly taxdeductible contribution to the non-profit
group Clean Air-Cool Planet
through the Vermont-based group
NativeEnergy, new renewable energy
projects are developed
• wind farms
• farm methane systems