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)

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,

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:

My 5: Francis Thicke, Organic Dairy Farmer, Political Candidate

January 7, 2010 by  
Filed under Blog, Front Page, Iowa, My 5, Slideshow

Blue Planet Green Living (BPGL) has endorsed Francis Thicke, Ph.D., in his candidacy for Iowa Secretary of Agriculture,. We asked Thicke two questions we like to ask all our interviewees. Following are his responses. — Julia Wasson, Publisher

5 Ways to Save the Planet

BPGL: What are the five most important things we can do to save the planet?


Francis Thicke is a candidate for Iowa Secretary of Agriculture in the 2010 election. Photo: Courtesy Francis Thicke

1. Probably the easiest thing we could do collectively in this country right now is to increase the average fuel efficiency of cars on the road. The average passenger vehicle (including SUVs) gets about 22 mpg. Hybrid vehicle technology is already on the road today that can double that mileage, and with plug-in hybrid technology — that is also available today — we could quadruple our mileage.

Clearly, we have the technology available right now to reduce the 140 billion gallons of gasoline used each year in this country to half or less. According to EPA, each gallon of gasoline burned emits 19.4 lbs of carbon dioxide. If we reduced our gasoline use by half, we would reduce carbon dioxide emissions by 679 million tons per year, and save more barrels of oil annually than are imported from the Middle East.

We seem to be slow learners in this country when it comes to vehicle fuel efficiency. Even the much touted Cash For Clunkers program was a failure for efficiency. According to data from the Department of Transportation, the average mileage for cars purchased through the program was only 24.9mpg. So even in a program with one of its goals purported to be increased fuel efficiency, we failed miserably.

2. The U.S. should step up and take a global lead in reducing greenhouse gases (GHG) that cause climate change. Arguments that we can’t do anything unless China and India sign on immediately ring hollow when you consider that the U.S. has historically been one of the largest GHG contributors, and on a per capita basis we currently produce about four times as much GHG as China. If other countries do not take appropriate steps to curb their GHG emissions, we can justifiably institute “dirty” tariffs on imports from those countries that produce goods with dirty fuel.

In the U.S. we have industry groups — like power companies and some agricultural groups — that think they should be exempt from GHG controls. We all need to step up and do our part. Reducing GHG will bring multiple benefits, including health benefits from improved air quality and economic benefits from switching to renewable energy systems and converting to a green economy.

3. Increase the amount of perennial crops used in agriculture by integrating animals back onto the landscape in ways that are ecologically sound, and by converting the U.S. biofuels industry to the use of perennial crops for feedstocks. That would convert a lot of annual row-cropped land to perennial cropping systems, which would reduce soil erosion, reduce nutrient pollution of our water resources, and save fossil fuel energy.

4. Convert our energy systems to truly renewable and sustainable systems, predominantly wind and solar. For example, according to the American Wind Energy Association, we have the potential, with wind generation, to produce three times more electricity in Iowa than we use annually. We need to develop systems to store the energy produced by wind, like hydrogen, for example. Similarly, we have only begun to scratch the surface of what is possible to do with solar energy, including solar hot water heating and photovoltaics on the roofs of the millions of homes across the U.S.

5. Help people in countries around the world develop the capacity to feed themselves using the resources available to them locally. Research from around the world is increasingly leading to the conclusion that solutions to world food problems will not come from high-input, silver-bullet technologies, or from food imports from places like Iowa. Rather, the solutions will come from local development of ecologically sound farming systems that optimize the use of resources produced locally.

2 Minutes with the President

BPGL: If you had two minutes with President Obama, what would you say to him?

THICKE: I would urge him to put more emphasis on transitioning our economy to clean, renewable energy, and suggest that if he accomplished that it would be a boon for our health, environment, and long-range economy, and it would be a legacy history would remember him for.

Blue Planet Green Living (Home Page)

Related Posts

Part 1: Francis Thicke on Biofuels, Biodiversity, and Erosion

Part 2: Francis Thicke on Renewable Energy

Part 3: Francis Thicke on Small Farms and Local Foods

Part 4: Francis Thicke on Big Ag, CAFOs, and the Future

Book Review – Who Turned Out the Lights? Your Guide to the Energy Crisis

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Who Turned Out the Lights? takes a balanced look at the pros and cons of all types of energy. Photo: © TebNad -

Who Turned Out the Lights? takes a balanced look at the pros and cons of all types of energy. Photo: © TebNad -

Blue Planet Green Living received an uncorrected, proof edition of Who Turned Out the Lights? Your Guide to the Energy Crisis, by Scott Bittle and Jean Johnson. We were asked if we’d like to review it, and that is what this post is about. In tomorrow’s post, watch for “The Great Energy Debate Pop Quiz” by Bittle and Johnson. — Publisher

Since beginning work on Blue Planet Green Living, I have made it my personal goal to gather as much information about the environment as my brain can handle, to read as much as I can get my hands on. I’m not particularly selective of the topics, but consume whatever crosses my path, defining my area of knowledge by whatever Destiny and my computer provide me. The task of keeping up with this data flow is daunting. Perhaps you feel the same.

Being an environmentalist means I have to choose from a million aspects of concern, direction, and interest. Planet Earth is facing a flood of problems, too many for one writer to assimilate, even for one magazine. For me, there is too little time to read about all the daily assaults on our planet, let alone verify the data in print; seek out authorities on the subject; interview them; type, edit, and post their points of view.

Being a journalist, as well, compounds the problem. Now, it is just as important to seek the opposing opinions and compare conflicting scientific data. Every topic has many angles, often many points of view, and frequently, two polar-opposite conclusions.

The fact that I try to keep an open mind on these issues is exactly why I like this book. The writers, Scott Bittle and Jean Johnson, have tried to present both sides of every energy issue, or at least, remain neutral in their presentation. The book gives “just the facts,” not opinions, and provides extensive end notes for the reader to verify all sources.

The following excerpt from the preface confirms the generally even-handed nature of the discussion the authors present:

For many of us, the nation’s energy debate has become an incomprehensible jumble, so the purpose of Who Turned Out the Lights? is to stop, take a deep breath, back up a bit, and go back to basics. we’ve written this book because we’re convinced that there are millions of Americans who are concerned about the energy issue and want to understand it better. Our aim is [to] explain the nuts and bolts in plain, solid, nonscientific, nontechnical English. We also believe that increasing numbers of Americans recognize that the country simply has to stop arguing about energy and start doing something about it. Our plan is to describe the chief options as understandably as we can and summarize different points of view about them. We’re not recommending solutions here. instead, we’re trying to offer enough perspective, context, and information so readers can stop relying on Hollywood stars and pundits for direction. We want to help you decide for yourself what path the United States should take.

The book tackles the single largest pollution source that exists today: energy. Whether it is for industrial, commercial, transportation or residential use, the production of the fuels, or the use of them, this book presents the many effects that carbon-based fuel is having on our country and our planet.

Topics discussed include positives and negatives about the use of —

The authors might have considered the detrimental effects of the mining process that gets the coal that Americans burn. Photo: © Jim Parkin -

The authors might have considered the detrimental effects of the mining process that gets the coal that Americans burn. Photo: © Jim Parkin -

•  coal: e.g., “On the positive side, coal is affordable, reliable, and the U.S. has plenty of it,” (Let me interject here that the good folks at Appalachian Voices dispute all three of these claims); but, “Burning coal produces sulfur and nitrogen oxide — chemicals that create smog and acid rain.”

• nuclear energy: e.g., “nuclear power is the hands-down winner when it comes to generating electricity without adding to global warming”; but, “some [nuclear waste] is so hazardous that it needs to be isolated for ten thousand to one million years”;

renewable energy: e.g., “Both wind and solar have two huge advantages … they don’t produce any greenhouse gases… [and] we’re not likely to run out of wind or sunshine anytime soon”; but, “even though you don’t have to pay for the ‘fuel,’ the initial capital costs are higher than coal or natural gas when they’re spread out over the life of the plant”);

oil: e.g., “Oil is also amazingly portable… efficient…[and] works so well that it’s knocked all the transportation alternatives out of the box”; but, “since we’re not making any more dinosaurs, we’re not creating any more oil. So at some point we’re going to run out.” Though briefly mentioned earlier in the book, I note here a giant omission in the chapter dedicated to oil: nary a drop of ink was spilled talking about the release of greenhouse gases from burning oil.

• and cars, homes, and more …

All of these are energy topics, and they all affect our environment.

In the chapter called “Flawed Ideas,” the writers discuss the possibility that, as a nation, we might not want to become completely energy independent. First of all, it is not possible, since even if we opened up all the potential oil fields, we would only produce 40% of what we are presently consuming. Second, we are not at war with Canada and Mexico, the two largest suppliers of our oil. Finally, if we produced all our own oil, this would eliminate competition, and prices would rise. Competition has its place.

One of the more interesting topics, in my opinion, was the discussion about the dollar amounts spent by lobbyists on both sides of the energy debate in 2008. The oil and natural gas industries spent $129 million to influence legislators, coal spent more than $100 million, the utility companies spent $157 million, while the total spent by all U.S. environmental groups was only $17 million. The writers did not complain or push for more environmental influence, they simply said, “That’s part and parcel of the way our democracy works.”

Offshore drilling provides a lot of oil for the U.S., but poses a serious environmental threat if a leak occurs. Photo: © Winston Lue -

Offshore drilling provides a lot of oil for the U.S., but poses a serious environmental threat if a leak occurs. Photo: © Winston Lue -

Here is how the writers describe their book in the section titled, “Pulling the Strands of the Problem Together”:

The first step is to pull the far-flung pieces of this debate together in one place. There’s the energy issue with its assorted disputes over OPEC, oil company profits, speculation in energy markets, and how to reduce the country’s dependence on imported oil. Then there’s the environmental debate on how to reduce the damage human beings do to the planet — global warming, carbon dioxide emissions, carbon footprints, pollution, that sort of thing. And finally, there is the economic fallout when the competition for energy heats up and supplies start getting tight….

These three issues — energy, environment, and the economy — all are intertwined, … and the country could get trapped … with all three problems coming to head at once.”

Although there’s much to recommend about this book, in my view, more attention could have been paid to the environmental effects of our choices of energy production. Where is the discussion of the environmental and health costs — not to mention the loss of natural beauty — of blowing up mountains to mine coal? Where is their concern for the horrible air pollution and health effects of mining the Tar Sands? What about the environmental costs of making the batteries that go into Priuses (and, yes, my wife and I drive Priuses)? These are just a few of the issues that troubled me by their absence.

Still, Who Turned Out the Lights? left me with a clearer view of the energy corner we are backing ourselves into. It’s well worth reading as a starting point, but don’t stop there. Check out some of the great environmental resources (like Appalachian Voices) to get a fuller picture.

Joe Hennager

Blue Planet Green Living (Home Page)

UNFCCC Meets on Climate Change

Global warming is the biggest single environmental threat humanity has ever faced, because every aspect of our lives will be affected by it, according to Greenpeace USA Media Officer Daniel Kessler. “It is the chaos that is going to come from climate change that is the most fearful — that we don’t know what to expect. We have models and projections but we’re messing with a system that’s much bigger and much more complex than we could ever understand,” he said.

The United Nations Framework Convention on Climate Change (UNFCCC) is holding the United Nations Climate Change Conference (UNCCC) in Poznań, Poland, December 1 through 12. The goal of UNCCC is to prepare for the final Conferences of the Parties (COP), which will establish legally binding obligations for developed countries to reduce their greenhouse gas emissions. Scientists almost universally agree that greenhouse gases are the major cause of global warming and that human activities are largely responsible for the excess of these gases in our atmosphere.

This is the fourteenth conference of the 192 Parties to the UNFCCC and the fourth meeting of the 183 Parties to the Kyoto Protocol, making it the halfway mark in negotiations on a future international agreement.

Without greenhouse gases, which trap heat from escaping into space, the earth would be too cold to inhabit. Yet, with the current excessive production, the atmosphere is in danger of becoming too hot for many sensitive species to survive, and weather patterns are becoming increasingly volatile.

According to the United States Environmental Protection Agency (EPA), the effects of climate change are limitless. What we do know, and can now observe, is that global warming causes extreme weather, de-stabilized local climates, disappearing glaciers, rising sea levels, higher temperatures, acidified oceans, and the destruction of certain ecosystems.

Since its initial non-binding agreement in 1992, at what is popularly called the “Earth Summit,” the member countries of the UNFCCC have been working toward establishing mandatory limits for greenhouse gas emissions. The goal is “preventing dangerous anthropogenic interference with Earth’s climate system,” according to the UNFCCC’s Article 2.

While the Earth Summit in Rio de Janeiro encouraged nations to voluntarily agree to stabilize greenhouse gas emissions, the 1997 Kyoto Protocol required it. Although a member of the UNFCCC, the United States did not sign the Kyoto Protocol.

The UNFCCC is only a year away from legally establishing the ambitious global climate agreement in Copenhagen, Denmark to help combat climate change. The global climate agreement that will be established at the COP will go into effect in 2013, a year after expiration of the first commitment period under the Kyoto Protocol.

According to the UNFCCC Poznań – COP 14 fact sheet, parties in association with the UNFCCC will take stock of progress made in combating climate change in 2008 and map out in detail what needs to happen in 2009.

The conference will also focus on how to reduce emissions from deforestation in developing countries and will explore to what extent the Kyoto Protocol’s clean development mechanism can be streamlined and its geographical reach extended.

The UNFCCC said that the new global climate agreement will take the stabilization of greenhouse gases one step further than the Kyoto Protocol did, because it will mandate that greenhouse gas emissions be kept at a certain level.

“Emission quotas defined by the Kyoto Protocol are no longer simple numbers on paper — they are a part of real-time operation of the global carbon market,” Executive Secretary of the UNFCCC Yvo de Boer said in a press release. “We see the carbon market working and this is an important message.”

Approximately 9,000 participants will attend the two-week-long event in Poland. Attendees include government delegates and representatives of environmental organizations, research institutions, businesses, and industries.

In order to brainstorm solutions on how to combat the effects of climate change, Kessler said, Greenpeace USA sent 45 delegates and experts to offer consultation on various issues that aggravate global warming. These issues include greenhouse gases caused by deforestation, transportation, and fossil fuel consumption. Tropical deforestation alone is responsible for approximately 20% of world greenhouse gas emissions, according to Fondation Chirac.

Kessler said that Greenpeace USA is especially concerned about deforestation, because many underdeveloped countries continue to add to global warming through the destruction of their forests. “We want to give lesser developed countries incentive to keep their forests standing and developed countries incentive to help the other countries,” he said. “This will have a positive impact globally and help combat climate change.”

Other changes also must be made, however, in order to adequately reduce the effects that climate change will have. Kessler said he hopes Americans will be able to learn more about renewable resources and cleaner burning from European countries, such as Denmark, because they are more advanced in energy-efficient technology. “We are on our way to becoming more energy efficient — but what we really want now is for the United States to catch up,” he said.

Sabrina Potirala

Contributing Writer

Blue Planet Green Living (Home Page)