M: Business 3rd Edition by O. C. Ferrell, Geoffrey Hirt, Linda Ferrell

Exercise 5

What makes a green product green? This question is actually quite complicated. The growing popularity of eco-friendly products is encouraging businesses to create and sell more green items. However, some businesses are cutting corners by touting their products as green when they really aren’t—a form of misconduct known as greenwashing. Greenwashers make unjustifiable “green” claims about their products to appeal to the ecofriendly consumer. As a result, 40 percent of consumers claim that they don’t know how to ensure that a company is really eco-friendly.

One common way that companies engage in greenwashing is by sustainably sourcing one product ingredient while the other ingredients remain unsustainable. This might be akin to a company claiming that its product is green since one of the ingredients is organic cotton, while simultaneously glossing over the fact that the product also consists of nonrecyclable plastics or chemicals. Unfortunately, the subjective nature of greenwashing makes it harder to detect, as consumers themselves differ on what is green and what is greenwashing. For instance, some consumers feel misled by Cascade Farm’s logo of a small idyllic farm when they discover that the brand is actually owned by General Mills. Others are unconcerned as long as the brand’s organic claims are true.

The topic of greenwashing has become so pervasive that it is prompting government intervention. The Federal Trade Commission is releasing guidelines to define what is acceptable in green advertising. The FTC has also begun cracking down on companies making false claims. For now consumers must investigate green claims for themselves. Such an investigation could include looking for third-party certification of a product’s “greenness,” paying attention to ingredient lists, and looking for information at trustworthy websites. However, until more stringent guidelines are created, the term green is likely to remain steeped in subjectivity.

What will happen to companies and their products if consumers find their green claims are false?

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Today, many consumers prefer buying from the companies that share values and are environmentally conscious. It is obvious that consumer want companies to be honest in their green claims. Unfortunately, it is not always easy to tell if the product is really green or not.