Software to Hold “Greenwashers” Accountable

When a business uses "greenwashing," it's like painting over rotten wood. The rot is still there, underneath the paint. Similarly, pollution doesn't go away just because a company tells us it's not creating any. Photo: Petoo (c) Fotolia.com

Greenwash (verb, \ˈgrēn-wȯsh\) – to market a product or service by promoting a deceptive or misleading perception of environmental responsibility.

It’s no secret that “going green” has become the next big thing in the corporate world. Riding the wave of consumers’ growing interest in environmental sustainability, companies are launching major ad campaigns to tout their green credentials. But many of their claims are misleading or downright false. The ads are compelling, but how are we to know who’s telling the truth? “Greenwashing” is eroding the credibility of well-intentioned green businesses and turning would-be green consumers into skeptics.

It’s reminiscent of the challenge to hold corporations accountable for their financial reporting. While the recent financial crisis highlighted the shortcomings of our markets and reporting structures, the United States business community is still a leader in financial accounting, reporting and ethics. Our system is sophisticated, consisting of a combination of generally accepted accounting principles (GAAP), fairly rigorous government oversight, a massive industry of accounting professionals and mature accounting software technologies that keep track of every last dollar.

We must develop the same infrastructure for environmental accounting. The development of Enterprise Carbon Accounting (ECA) software is well underway, with roughly 60 vendors bringing solutions to market. ECA software enables companies to track their carbon footprint and the footprint of their suppliers as well as the impact of customer use of their products. It’s a promising innovation that can help us manage corporate America’s environmental footprint, but it’s still at the early stages of adoption. We need a number of things to happen for the ECA market to mature and develop environmental accounting to the same level as financial accounting.

So what will it take to develop the ECA software market and have the infrastructure necessary to hold greenwashers accountable? We think there are five key requirements to get us there:

  • Clear government action on regulations;
  • Adoption of carbon accounting principles;
  • Expansion of “Scope 3” emissions accounting;
  • Better business incentives to go green; and
  • Demanding, informed consumers.

Clear Government Action on Regulations

If corporations are to be held accountable for green claims, we need orders from the top. But the U.S. has been relatively slow to pass laws with lasting environmental impacts. The Environmental Protection Agency (EPA) and Congress are at a stalemate in agreeing upon carbon emission regulations. Legislation often gets caught up in political gridlock – such as the American Clean Energy and Security Act, which would introduce an emissions trading plan not unlike Britain’s CRC Energy Efficiency Scheme. The bill passed the House in 2009 but has yet to be addressed by the Senate.

However, steps are being taken in the right direction – like the EPA’s Mandatory Greenhouse Gas Reporting Rule, which requires companies that emit 25,000 metric tons or more of greenhouse gases annually to disclose emissions information to the EPA. There’s also progress at the state level. California’s Global Warming Solutions Act of 2006 aims to reduce the state’s carbon emissions to 1990 levels by 2020. The increasing role of government-imposed transparency requirements over the coming years will be a major obstacle to greenwashing.

Adoption of Carbon Accounting Principles

We have GAAP and the International Financial Reporting Standards (IFRS) as standards for financial reporting; we need similar principles for environmental accounting. These principles make sure that each corporation is reporting apples-to-apples numbers. The current most widely used set of international carbon accounting standards, the Greenhouse Gas (GHG) Protocol, is still maturing. When a business is required to disclose its carbon footprint according to broadly accepted standards, regulators, investors and consumers will all be able to see who’s truly green and who’s just greenwashing. Companies like Dell, Apple, IBM, and Wal-Mart have already begun to adopt nascent carbon accounting principles.

As ECA and similar innovations arise, carbon accounting will become more widespread and lessen the potential for greenwashing. As more companies face requirements to track and disclose emissions, others will voluntarily do so as the process becomes more standardized and manageable. Once carbon accounting has been adopted by most businesses, disclosure of the company’s carbon footprint will be a prerequisite for businesses to make any sort of claims of environmental friendliness.

Expansion of “Scope 3” Emissions Accounting

Scope 3 emissions are indirect emissions resulting from a company’s actions, the sources of which are not owned by the company. An example is the carbon emitted by a company’s suppliers. Requiring Scope 3 in every carbon accounting report would prevent companies from cutting corners to artificially report a smaller carbon footprint. Take Dell’s report of its carbon “neutrality” for example.

In 2008 Dell claimed to have become “carbon neutral,” but estimates had neglected to account for Scope 3 emissions. Intentional or not, Dell was grossly under-reporting its carbon footprint and claiming false credit for distorted reports — a form of greenwashing. With a rigid set of carbon accounting standards, including Scope 3 disclosure, this never would have occurred. In the GHG Protocol, tracking Scope 3 emissions is currently optional. As more companies voluntarily track Scope 3, though, it’s only a matter of time before it’s required and fully incorporated into ECA software – making it nearly impossible to “pull a Dell.”

Scope 3 disclosure requirements will also force wider adoption of comprehensive carbon accounting among related businesses. A viral effect will spread adoption, killing the potential for greenwashing throughout the supply chain. To disclose its Scope 3 emissions, a company often must ask suppliers to track their emissions. With Scope 3 requirements, these suppliers will have to request the same of their own suppliers — and so on. With carbon accounting requirements and a standardized Scope 3-inclusive reporting scheme, the number of businesses with full emissions records will explode — dealing a critical blow to greenwashing potential in the process.

Better Business Incentives to Go Green

Sustainable business practices are more often than not motivated by revenue generation or inherent cost savings. As these incentives increase, truly beneficial green actions will take hold and the need for greenwashing will fade. For example, nearly one-third of small businesses face energy costs as their largest expense. They have an economic incentive to trim these costs, reducing their waste and carbon footprint. When it becomes easier to identify cost-saving opportunities, as with the use of a mature ECA software system, carbon footprints will shrink naturally.

Government incentives are also cost-saving opportunities for businesses with environmental responsibility. Tax incentives are awarded for using hybrid or green diesel for transportation, for example. A global survey this year by workspace solutions provider Regus concluded that 63% of U.S. companies need more tax breaks to accelerate green investments. The government will likely expand financial incentives for green businesses as environmental stewardship becomes more of a national priority. Similar to compliance capabilities in other software systems, ECA software could develop to alert users to new opportunities to take advantage of government incentives. When a cap-and-trade scheme or similar system is finally implemented, the economic incentives will skyrocket, further spreading carbon accounting practices and edging out potential greenwashers.

Demanding, Informed Consumers

As green buyers become more savvy, greenwashers will no longer be able to conceal fraudulent claims. This year’s third annual environmental consumer behavior survey by the National Geographic Society and GlobeScan polled consumers in 17  countries, determining that they perceived greenwashing as the biggest obstacle to environmental improvement. Consumers are demanding product sustainability information before believing the green hype. Wal-Mart plans to use supplier-provided carbon accounting information to start a system of product labels for customer reference. As detailed sustainability information develops into the new norm, claims of green marketing will fizzle without hard evidence. Greenwashers will obtain ECA software to comply and the resulting transparency will effectively destroy false marketing potential.

Hunter Richards, Accounting Market Analyst, SoftwareAdvice.com

What are your thoughts? Are we missing a critical new weapon against greenwashing? Let us know in the comments.

Hunter Richards
Accounting Market Analyst, Software Advice

Blue Planet Green Living (Home Page)

Hunter Richards’ article was first posted here: SoftwareAdvice.com

EPA’s STAR Fellowship Competition Underway — GRO Soon to Begin

September 1, 2009 by  
Filed under 2009, Blog, EPA, Front Page, U.S.

Comments Off on EPA’s STAR Fellowship Competition Underway — GRO Soon to Begin

College and University students in environmental fields are invited to apply for funding through the EPA. Photo: © Laurence Gough - Fotolia.com

College and University students in environmental fields are invited to apply for funding through the EPA. Photo: © Laurence Gough - Fotolia.com

Are you a US undergrad or grad student engaged in environmental studies? Here’s your chance to earn an EPA Fellowship in either the STAR or GRO programs. The graduate STAR competition is underway now, and the Greater Research Opportunities (GRO) competition to support college and university juniors and seniors begins September 3.

STAR Fellowships

The STAR program is designed to “help defray the ever-increasing costs associated with studies leading to advanced degrees in environmental sciences.”

But it’s not just a matter of asking; it’s highly competitive. Applicants undergo “a rigorous review process.” Master’s and doctoral degree options include “traditionally recognized environmental disciplines as well as other fields such as social anthropology, urban and regional planning, and decision sciences.”

Grad students can earn up to $37,000 each year of the fellowship, with $12,000 of that going to yearly tuition and fees. Fellows also receive an expense allowance of $5,000 each year they’re in the program. The amount of the stipend varies, however, based on factors such as actual school costs and how long you need support.

Begun in 1995, the EPA program has supported some 1,500 STAR fellows through awards to students “in every state and most territories. Fellowships have helped educate new academic researchers, government scientists, science teachers, and, environmental engineers.”

If you’re applying as a Master’s level candidate, your maximum fellowship is two years. If you’re applying as a doctoral candidate, you can be supported for three years, with a possible extension for a fourth year, if approved.

Opening Date: August 19, 2009
Closing Date: October 22, 2009

GRO Undergraduate Scholarships

Undergrads are invited to apply for GRO support for study in environmental sicence and related fields.

“Eligible students will receive support for their junior and senior years of undergraduate study and for an internship at an EPA facility during the summer between their junior and senior years. The fellowship provides up to $17,000 per year of academic support and up to $7,500 of internship support for the three-month summer period.”

Opening Date: September 3, 2009
Closing Date: December 11, 2009

Other Funding Opportunities for Students

Additional Fellowship opportunities posted on the EPA website include:

American Association for the Advancement of Science (AAAS) Science and Engineering Fellows Program

Association of Schools of Public Health (ASPH) Fellows Program

EPA Marshall Scholarship Program (in collaboration with the UK’s Marshall Aid Commemoration Commission)

Julia Wasson
Blue Planet Green Living (Home Page)

ISO 14001: Comply with Laws, Prevent Pollution, Continually Improve

Long and two other environmental auditors prepare to enter a steel mill blast furnace.

Long and two other environmental auditors prepare to enter a steel mill blast furnace.

“When something goes wrong, a company has an accident or a mistake, we immediately blame that company for not doing things right. And then, inside that company, it goes down from the plant manager, whose neck is on the line, and he starts looking for somebody he can blame,” says Molly Long. “There’s a hierarchy of blaming that occurs. It’s the picture of the two-story outhouse. No one wants to be on the bottom floor.”

As president of A.W.E. Consulting, Long audits compliance with ISO 14001, which, she describes as, “an international standard that helps people coalesce their environmental management into something that’s meaningful and trackable.” When a business seeks ISO 14001 certification, it enters into a process that changes that blaming mentality by putting responsibility where it belongs: at the top.

In Part 1, we interviewed Long about the abundance of laws, rules, and regulations surrounding environmental management. In Part 2, we talk with her about about her role as an ISO 14001 auditor. In Part 3, we’ll find out about Long’s role as an environmental consultant. — Publisher


BPGL: What is ISO 14001, and why should businesses care?

LONG: ISO 14001 guarantees the community in which the business operates that they are doing what they can to meet their environmental commitments: pollution prevention, compliance, and continual improvement. It sets up a framework for businesses to interact with their community, to comply with laws, and to make sure that the business is sustainable.

The primary purpose is to protect the environment, but businesses also can use ISO 14001 to help them innovate. The Environmental Protection Agency (EPA) sets standards so that everybody can be safe and healthy, and no one blows things up and kills fish and so on. But, if a business wants to, they can take it further and do what is environmentally correct and, at the same time, innovate a benchmark for other businesses to follow.

The ISO standards are created by the International Organization for Standardization. It’s a much broader group of people than if you just had legislators who were affected by their local issues. And there are lots of people who submit comments on the standards, too.

BPGL: As an ISO 14001 auditor, what are you looking for in terms of environmental management?

LONG: A lot of companies already do environmental management. They have to, because of all the regulations, but they don’t have a systematic way of doing it, and they’re not very good at collecting data about performance.

The way most companies interact with the environment is, “The EPA tells us we have to do something, so we’re going to do it this way.” They’re not necessarily doing it the best way, the way that’s the most efficient for them. They’re just doing it because they have to do it.

But the best environmental management involves three basic things:

  • Defining what needs to get done
  • Defining who needs to do it
  • Identifying the things that will tell you whether it’s been done properly
A typical day for auditor Long includes reading a LOT of paperwork.

A typical day of auditing includes reading a LOT of paperwork. Photo: Courtesy Molly Long

A lot of people do the first part, or maybe the second part, but when it comes to measuring whether it was done properly or effectively or in the best way, they don’t do a lot of that. So ISO 14001 sets up a system that is driven by the top management in an organization. Top management uses this data on performance to help them meet three basic commitments:

  • To comply with laws and regulations that apply to them.
  • To prevent pollution wherever possible. So even if a law or regulation doesn’t tell their business they have to do something, but they know that it will prevent pollution, they pledge to do it.
  • To continually improve. They try to make their business better, more efficient, and more effective at preserving the environment, at the same time making it more economically feasible and more sustainable.

Everything each employee does must be in line with those three commitments, which are stated in the organization’s environmental policy. The standard recognizes that the ultimate responsibility lies with top management to meet these commitments and provide the necessary resources to get the job done — it breaks the blaming cycle.

BPGL: How does a company get certified as ISO 14001 compliant?

LONG: The pathway to certification is through an independent body. If somebody wants to register their system to the ISO 14001 standard, they have to go to an authorized registrar. The business’s relationship with the registrar is as auditor and auditee. We differentiate between compliance and conforming, because compliance refers to laws and regulations, but the ISO standard is voluntary. Also, unlike most legal requirements, the requirements of the standard can be implemented in a variety of ways and still be considered conforming.

An audit is similar to an EPA inspection, except that instead of assessing compliance to a few environmental laws and regulations, the auditor is looking at the organization’s approach to environmental management holistically, all the ways their operation can affect the environment, both positively and negatively. The auditor for the registrar visits the facility to determine if they’re meeting  the requirements for 14001, or whatever standard it is that they want to become registered for, so they can recommend that the organization receive certification for their efforts.

But certification is just the start. In a systems audit, we’re looking at the management of all media — air, water, and land, as well as effects to the community and natural resources use. We also look to see what positive impacts an organization is having on the environment. When a business has met the baseline for compliance, we want to take it a step further and help them make improvements to their management of environmental issues. We have to see evidence of that improvement in order for them to keep certification.

BPGL: Is ISO 14001 certification voluntary or a requirement for all businesses?

ISO 14001 is a requirement for US businesses that trade overseas.

ISO 14001 is a requirement for US businesses that trade overseas.

LONG: It depends. ISO 14001 is a requirement for companies that want to do business or sell things overseas. But for companies that just do business in the US, it’s not a requirement, yet. Many automotive companies require their suppliers at various levels to be certified, as they are themselves.

In some states there’s an environmental award issued by the governor or by a state agency, or even by the EPA, which has an environmental performance track. The award is a special type of recognition that has benefits that go along with it. And, often, one of requirements for getting into those programs or awards is that a business is a 14001-certified system. That’s as far as we’ve taken it in this country.

I think we place too high a value on compliance with laws and regulations. Our focus on compliance skews the metrics for performance by equating compliance with doing what is best for the environment. ISO 14001 requires the focus to shift to efficiency and sustainability, but many do not understand this. Also because it is voluntary, ISO is seen as less stringent, so businesses, regulators and the community at large still view compliance as the gold standard for environmental stewardship. We’re really missing the boat here.

Think of driving your car within the posted speed limit — you are complying with a law, but it doesn’t mean you are a good driver, or that you are committed to improving your driving skills.  Lets face it: Many drivers focus on avoiding getting caught speeding more than they do driving as well as possible. It’s no different with environmental regulations.

Sure, obeying the laws is important, but our laws aren’t always the best option for environmental protection. Plus, laws don’t require you to improve or be more efficient — the EPA doesn’t care if businesses operate efficiently, their primary concern is for the public welfare. But as we talked about before, using laws to eliminate businesses because of environmental concerns is no more sustainable than allowing businesses to pollute as much as they want.

BPGL: Are many US businesses opting for ISO 14001 certification?

LONG: The US lags far behind the rest of the world in putting ISO 14001 systems in place. Any kind or size of operation you can think of can implement the standard, whether it’s a mom-and-pop grocery store or a not-for-profit organization, an office building, or a major industrial facility. And it’s an international standard, so it doesn’t just mean that the US can do it.

BPGL: Is a lack of efficiency something the environmental manager should be watching for?

Businesses can't be very profitable when they operate inefficiently. Photo: Joe Hennager

LONG: Of course. Businesses want to be as profitable as possible, but you can’t maximize profits when you operate inefficiently. In ISO 14001, we have to look beyond compliance and understand the metrics that indicate good environmental performance as well as the context of the business, in order to make a judgment about whether they’re actually being successful at protecting the environment, being efficient, and becoming a sustainable business.

BPGL: So in some cases you’re an auditor and in other cases, you’re a consultant?

LONG: Exactly. I play two very different roles in my career. And the two really don’t meet. They can’t meet. I could never audit somebody that I consulted and I would not consult somebody that I had audited.

Consultants and auditors aren’t miracle workers — successful environmental management is up to top management. They have to be committed and supportive of environmental management, or it doesn’t work. Something I see everywhere is that companies hire an environmental manager, and he becomes the scapegoat. He’s the person that gets blamed whenever something goes wrong. But that’s just one person overseeing the activities of many other people, sometimes hundreds or even thousands, who all have the ability to impact the environment in some way through their work. I can speak to this, because I was in this position. One environmental manager, or even a small group of them, cannot possibly know what any one person is going to do right or wrong on any one day, and cannot possibly carry out all those activities by themselves just to ensure they happen properly.

A single environmental manager can't possibly know everything that everyone does on any given day.

A single environmental manager can't possibly know everything everyone does on any given day.

Regardless of this impossible scenario, it is the reality in most traditional compliance-based system: all the onus comes back down on one person’s shoulders, the environmental guy/gal. So when mistakes are made, there’s a blaming culture that is very much out there, and it happens at all levels. But blaming doesn’t solve any problems.

BPGL: But how do you get away from that, when it all rolls downhill?

LONG: ISO 14001 tries to change that. The first thing it asks is, “Who is ultimately responsible?” Top management. They’re the ones who need to provide the resources to be able to get these things done. And that means resources throughout the organization. So you can’t just hand it to one person and say, “Here you go, here’s your system.” I try to work with management so they can get the right information to the right people, so they can each do their own work properly. That is so key.

BPGL: How can anyone be expected to be compliant when they can’t possibly know all the laws?

LONG: Being an environmental manager in a traditional compliance-based system is almost an impossible job. There’s no one person who can know everything, every law that is out there. I don’t profess to know even close to a small decimal point of all the laws that are out there.

This is one of the things I really like about 14001. Of course, you have to know what laws apply to you. However, at the end of the day, if you’re in doubt, you have your two other commitments to fall back on: Is what you’re doing preventing pollution? And is what you’re doing helping you to get better? If you meet those other two commitments, you are usually in compliance as well.  By the same token, if those two questions aren’t answered, it doesn’t matter whether you’re compliant or not.

Businesses are using their down time to get organized. Photo: Joe Hennager

Businesses are using their down time to get organized. Photo: Joe Hennager

Compliance is ultimately arbitrary, because the same laws often apply in different environments, and also because they are influenced by politics and culture. For example, who is protecting the environment better? California doesn’t allow you to dump oil on the ground, but they do exempt some other nasty stuff from environmental regulation because of political lobbying. Whereas Mexico doesn’t care too much about oil on the ground, but you have to plant a lot of trees to offset the land you took up to build a parking lot.

ISO 14001 provides the tools for moving beyond compliance to arbitrary laws and begin following the path to true sustainability. It helps its adherents make sure the right people are doing the right job, and that they have adequate resources. It eliminates the blaming cycle by assigning accountability and responsibility to those with the proper authority. It also demands cooperative effort to find solutions that address the roots of problems rather than their symptoms, and recognizes that you can’t push your problems off on someone else. These are the management concepts I try to help people grasp, not only as an auditor, but as a consultant and trainer.

BPGL: Are you seeing a decrease in voluntary compliance in this economic downturn?

LONG: It’s interesting, because a lot of people are asking, “Is this economic slowdown affecting people’s ability to comply with environmental laws, are they cutting corners, things like that?” Actually, what I’ve found in my travels, has been more that people are taking the time to focus on some things that they don’t have the time to do when they’re running full bore. They’re doing maintenance, they’re taking the time to do some projects. So actually, we’re seeing some environmental improvements.

At least at this stage, we’re seeing that people are taking some time to do the little things that don’t cost a lot of money but the kind of things they couldn’t really justify in the course of day-to-day operations. For example, they’re organizing so that parts and materials are inside or in areas where they are less likely to impact the environment. They’re getting the stuff out of the way so they can continue running their lines. Now they’re saying, The line’s down, let’s organize this area. Let’s make it neat and safe and as environmentally friendly a space as possible.

Part 1: Red Tape, Regulations, and Environmental Crimes

Part 2: ISO 14001: Comply with Laws, Prevent Pollution, Continually Improve (Top of Page)

Part 3: Green Consultant Boosts Efficiency and Profits

Julia Wasson

Blue Planet Green Living (Home Page)

Related Post:

My 5: Molly Long, A.W.E. Consulting

Part 1: Much Ado about Batteries

November 9, 2008 by  
Filed under Batteries, Blog, Front Page, Hazardous Waste, Landfill, Tips

Billions of spent batteries end up in landfills each year. Photo credit: Joe Hennager.

Billions of spent batteries end up in landfills each year. Photo credit: Joe Hennager.

According to the U.S. Environmental Protection Agency (EPA), Americans use billions of batteries every year. That’s Billions, with a B. We’re absolutely dependent on them. Try getting through a day without using batteries at home or at work. Chances are you use batteries to do all kinds of things: start your car, talk on your cell phone, take photos with your digital camera, read email on your laptop, and relax (or rock out) to the music on your iPod. And if you happen to be a patient when the hospital loses power, you’ll be grateful for life-saving batteries.

But that presents a major problem: What do you do with all those dead batteries? Throw them out. Buy some more. Use those up. Throw them out. Buy, use, throw. Buy, use, throw… Sounds like a bad habit.

Batteries are considered a disposable commodity in the United States. It’s relatively cheap to stock up on extras, and many of us do, just to be sure we have them around when one of our toys or tools dies. A better alternative would be to use rechargeable batteries, though they, too, have a limited life span.

In the past, pretty much everyone threw their spent batteries into the trash, which was hauled away to a landfill. We did it for years. Now, landfills across the U.S. hold billions of discarded batteries, leaking zinc, alkalis, nickel, cadmium, lead, mercury, and silver into our groundwater supplies. Sure, the batteries themselves are small. Some are tinier than an adult’s little finger. But the environmental punch they pack is huge.

Reduce Your Use

The most important step you can take in eliminating battery waste is to reduce the number of batteries you buy. But that’s not practical unless you also purchase fewer items that use batteries to operate, and that’s not likely. We Americans love our battery-operated gadgets. In many ways, we depend on them. So the next-best step is to stop buying so many disposables.

One of many battery choices in U.S. stores. Photo credit: Sam Dundon.

Consumers have many battery choices in U.S. stores. Photo credit: Sam Dundon.

In a 2007 study, Bio Intelligence Service found that rechargeable batteries were better than disposable batteries in several ways. (As you look at these results, keep in mind that the study was sponsored by Uniross, a French battery manufacturer.) Compared to disposables, rechargeable batteries were found to be potentially less harmful to the environment in the following ways:

  • Air Pollution (Ozone): 30X less
  • Global Warming: 28X less
  • Non-Renewable Natural Resources: 23X less
  • Air Acidification: 9X less
  • Water Pollution: 3X less

So, if you have a choice between using rechargeable batteries or alkaline batteries, choose rechargeables. And if you have AC power available, and your gadget is equipped with a cord, plug in. Let the grid run your equipment while you can, and use batteries only when you have to pick up and go.

Part 1: Much Ado About Batteries

Part 2: The Inside Scoop on Batteries

Part 3: Finding a Battery Recycler

Part 4: Safety Tips for Battery Recycling

 

Julia Wasson

Blue Planet Green Living (Home Page)