Today, an increasing number of companies are staking out a competitive position in the green marketplace by attempting to “out-green” their competitors. This tactic, however, is a double-edged sword. While companies may benefit from being a leader on green – by increasing sales, reducing costs or mitigating risk, they also expose themselves (and their green initiatives) to a higher level of public scrutiny than those with less competitive claims. In fact, despite good intentions, if these leading companies engage in even simple acts that diverge from their green claims, they risk public charges of “greenwashing”.
Over the past few weeks, two leading green companies learned this first hand. Tesco, the UK-based retailer, was criticized for apparently shipping DVDs 1,400 miles (from the UK to Switzerland and back again) in order to save UK consumers a pound fifty in tax. Lexus (a division of Toyota) took heat for tuning a hybrid engine not to minimize fuel consumption, but to maximize power. A 438 horsepower car (called “the world’s first luxury hybrid muscle car” by USA Today) that goes 0 to 60 in 5.5 seconds may be hot for consumers, but does not help cool the planet.
When events like these occur, consumers are increasingly turning to the Internet to express their views. Anti-corporate blogs provide one outlet for consumers. Content posted on these sites, however, tends to be too brash to appeal to mainstream consumers.
Alternatively, Do the Right Thing provides a powerfully simple way for consumers to express their opinions: consumers can read news articles and rate companies based on their positive or negative social impact. This site operates in a similar way to Digg (click to view environmental stories on Digg). But, instead of ranking stories based on popularity, it ranks companies based on consumer perception of how positive or negative their social impact is.
The weighted average ranking reflects (with sufficient sample size) the consensus of the community. One recent example: while Google and Whole Foods both get 3.9 ratings on the site for their efforts to invest in renewable energy, Toyota gets a -2.4 for its low fuel economy Tundra pick-up truck.
The emergence of such sites will likely add to the growing pressure on companies to green their activities and do so in a way that is genuine, transparent, consistent (both internally and externally) and impactful. For companies, such consumer-powered content sites can provide positive benefit as well: ratings provide a simple way to gauge consumer attitudes and sentiment on a specific initiative or over time.
So, corporations take note: Companies that stake out a leading competitive position on green also expose themselves to a greater level of public scrutiny. Consumer-powered content sites are making it easier for mainstream consumers to express their opinions on green corporate initiatives. Corporations must respond by policing their own activities more carefully to ensure that they are aligned with green competitive claims. Companies that fail to do this risk that consumers will expose these initiatives as simply “greenwashing.”