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Corporate Sustainability: Profit, Motive and Intention in Greenwash

 

rio20-green-washing-capitalism

 

 

A large-scale sustainable trajectory is impossible without the corporate sector, whose profit is neither necessary nor sufficient for sustainability, and where ethical motives, positive intention and measurable results are important drivers in its successful acceptance, application, and interpretations of ‘greenwash’.  However, given the diversity of commerce, the variety of initiatives, and multitudinous conditions and applications, there are an almost indecipherable complexity of variables to evaluate.

1       Is corporate sustainability just greenwash?

From the deeply embedded nature-commerce dichotomy to the introduction of Sustainable Development as a concept on the world stage by the 1987 Brundtland Commission, corporate attitudes to sustainability have improved, if only superficially for some of the major polluters (e.g., Bansal, 2004).

A multitude of businesses are investigating, promoting and reaping CS benefits as they realise its consistency with profitability (e.g. Perera et.al., 2013; Hart,.1997; CBI, 2012; Zaidi.et.al., 2012; WBCSD, 2010).  Some companies are utilising the momentum of the environmental movement and the advertising industry methods, whether good intentioned or otherwise (Motavalli, 2011).  Attempting to convince others of their ‘green’ credentials, commerce has long tried to engage the public with messages associating business endeavours with socially, environmentally and economically acceptable methods and outcomes (Livesey, 2002; Karliner, 2001).  With multifarious motives and methods, corporations have been found wanting in their representations of truth in the drive for profit (Livesey, 2002; Motavalli, 2011; etc.).

From a ‘deep’ green perspective, all CS attempts are greenwash unless companies are holistically, 100%, certifiably:

1)     Ethical,

2)     Zero- or positive-impact (socially, environmentally and economically), throughout its operations,

3)     Consistently monitoring and reporting results in continuous cyclical development processes.

The likelihood of this remains to be seen.  In the real world of 7-billion where ‘business angels’ coexist with corporate ordure, CS has important objectives albeit with unclear motives, varying intentions and erratic execution.  Therefore, motive, intention, application success and prevailing conditions can be used as principal variables to identify ‘greenwash’ or ‘greenheart’.

2       Corporate sustainability?

High-profile environmental accidents, media coverage of climate change and environmental disasters are contributing to greater concern for human and environmental wellbeing, leading to an inevitable rise of corporate scrutiny.  In today’s intense competition, increasing environmental awareness, and progressively demanding regulation, companies find they must undertake their business with ever-greater attention to wider issues of social justice and environmental welfare, not just bottom-line profit.

Beyond an initial denial of environmental responsibility in the 1960-70s, early efforts of companies to address their environmental impacts began primarily in response to strict legislation resulting from widely publicised industrial accidents and ecological problems (Hart, 1997).

Convergent challenges and crises across the spectrum of human existence, from the environmental, social, economic and political, have begun to confound accepted capitalist and neo-liberal economic wisdom.  Combined with increased competition, regulation, media exposure and public pressure, corporate responses to such predicaments are helping to create the conditions for efforts to unite toward common goals in which equity and justice become comfortable bedfellows with profit.  These diverse, compound issues and initiatives are the hallmarks and lifeblood of CS.

Strictly speaking, CS might be considered both a documentable ideology and a measurable process whereby commercial entities seek advantage (profit, strategic or otherwise) whilst promoting prosperity and providing tangible benefits.  Ideally, sustainability is sought and promoted throughout an organisation as a means to:

A        Minimise environmental burdens created by corporate activities,

B        Maximise social welfare and justice provided through commercial endeavours,

C        Maintain or increase equitable economic health within the company and externally, including the community, however defined geographically (Bansal, 2004; Elkington, 1998; WBCSD, 2010).

The precise crafting and implementation of CS programmes is highly specific to the organisation.  The general view suggests CS represents value-for-money independent of timescale (Livesey, 2002, etc.), as incremental gains are contributory to greater progress and imperceptible influences often extend beyond the measurable.  Whether such initiatives are successful when assessed individually is not entirely evident from the literature.

Recent research showed that “using a ‘sustainability lens’ to evaluate business opportunities has helped companies grow revenue and gain competitive advantage (Perera, et.al.,2013).”  This is despite previous views that redirecting funds to address ‘externalities’ and non-central business objectives risked depleting profits and reducing competitiveness (e.g.VanDerPijl, 2009).

Only by understanding CS strategies, both ideal and practical, can we begin unpacking the corporate ideologies, motives and intentions behind them to grasp how they interrelate, are co-dependent and co-produced with prevailing conditions.

3       Strategies

As a measurable process, CS strategies can be devised to address a range of conditions associated with issues or objectives arising internally and/or externally through pre-emptive assessment, planning, or response to events real or perceived, across the temporal divide.  These would lead to corporate behaviours that broadly seek to ‘ameliorate the negative’ or ‘enhance the positive’ in ways that are beneficial to the organisation in some form, either directly or indirectly, immediately or in the future, as individual resolutions or continual processes.

It is conceivable that successful CS strategies will be designed in advance based on a thorough, cyclical process of research, analysis, consultation, testing, implementation, feedback and reassessment, with full cognisance of existing conditions and potential impacts.  This is an ideal characterisation of how such tools as audited Environmental Management Systems (EMS) and bespoke CS systems are devised and implemented.  Ideally companies would employ such measures early and effectively to mitigate detrimental impacts and accentuate positive benefits.  However, we have seen from such high-profile events as Exxon-Mobil’s Valdez spill and Shell’s Nigerian debacle have led to new sustainability strategies (Livesey, 2002; Bansal, 2004).  Shell’s Brent Spar and Camisea experiences have proven that such attempts can be successful, spurring improved local stakeholder engagement and relevant amendments to corporate plans (Livesey, 2002).

Strategies for CS can be generally characterised in several ways.  Strategic stages may be defined according to the industry and scope of sustainability initiatives (Hart, 1997).  A framework or system is necessary to give structure and impetus to strategies, ensuring continued development and relevance, evolving with changing times (Hart, 1997).

Various approaches and initiatives can comprise a CS strategy, either individually or in combination.  Such strategies may be voluntary or statutory, mandated or regulated either externally or internally, and can comprise:

  • Sustainability indicators/reporting,
  • Carbon accounting/management,
  • Social/environmental reporting (Laufer, 2003),
  • Corporate/ecological citizenship and social/environmental responsibility (Rondinelli, 2000),
  • Triple-bottom-line/integrated reporting (Elkington in Livesey, 2002),
  • Corporate policies/controls/systems and EMS such as ISO14000 (US-EPA, 2002).

In devising strategies for preventing degradation and ‘greening’ processes, companies are reaping financial benefits, a key driver (Hart, 1997).  For example, a $250m revenue-stream was generated by Aeroquip through emissions-reduce products.  Interestingly, Hart also writes: “by co-locating facilities that […] have been geographically dispersed, BASF was able to create industrial ecosystems in which the waste from one process becomes the raw material for another (1997:71).”

Product stewardship is characterised by full-lifecycle impact minimisation, creating “products that are easier to recover, reuse, or recycle (ibid.).” Several such processes include industrial symbiosis, eco-design, design-for-environment, cradle-to-cradle, lifecycle design, etc. (Hart, 1997; McDonough, 2002).  For example, Xerox Corporation developed initiatives to reuse parts from outdated leasehold machinery in ‘like-new’, state-of-the-art models with c$300m/year cost-savings.

Recognising the unsustainable industrial technology base, Clean Technology takes impact reduction to its conclusion through zero-impact ideologies (Hart, 1997).  This is particularly necessary in developing countries where financial and natural resources are stretched by human development needs, population and manufacturing growth.

Both Hart and Rondinelli (ibid.) suggest that, in addition to the more visible external reporting and initiatives, corporations put enormous effort into internal development, much of which goes unnoticed, thereby impoverishing our understanding of the full scope of CS.

4       Ideology

Fundamentally, humans must consume to survive, and businesses fulfil this fundamental need.  When formulating and justifying their ideologies, businesses refer back to markets, external demands and consumption in justifying their role in fulfilling needs and satisfying demands.  Then who is responsible for sustainability?  Addressing liability for corporate environmental degradation and unsustainability, defensives and the closed-minded regularly shift responsibility from the company, who are ‘just fulfilling needs and providing services’, rather than recognise the fundamental, unassailable fact that business remains responsible for their actions as possessors of free will.  Hart believes: “…corporations are the only organizations with the resources, the technology, the global reach, and, ultimately, the motivation to achieve sustainability (1997:67).”

Corporate strategic ideology is therefore incredibly important in setting the context, framework and conditions for sustainability to flourish, or flounder.  The ideology of organisational approaches to sustainability depends on motive, intention and prevailing conditions.

Motive is the reason, incentive, cause, goals or object of a company’s actions and CS initiatives (Dictionary.com), which help define and frame their intentions.  Motives are qualified as ethical to eliminate singular self-interest to focus on the just, conscientious, and moral that is equitable and fair (Giddens, 1974).

Intention is the attitude toward the effect of CS (Dictionary.com), qualified as positive to accentuate the inclusive, externally-focused framework extending well beyond organisational boundaries toward planetary parameters.

Prevailing conditions and their impacts on CS approaches, behaviour and results (successful or otherwise) define and frame both motives and intentions, giving rise to a range of rational options and the possibility of accident.

Using the example of Shell, Livesey reminds us that commerce naturally seeks profit; it is therefore important to understand the relationship of profit to sustainability.  Shell, among many, considers profit necessary for business to reinvest to achieve sustainability goals and corporate citizenship.  But what are the motives behind this logic?  If profits are necessary for CS, are they sufficient?  One could argue that sustainability is possible without profit; simply ‘breaking even’ is sufficient.  I would argue that profit is neither necessary nor sufficient for sustainability, which must be premised on, and therefore necessitated by, a supporting motive.  Accidental or unintended CS is possible, but I hold that its perpetuity must be intended and its ideology communicable and therefore documentable for CS to be genuine sustainability.

Is the pursuit of profit at odds with sustainability?  What was once profit versus sustainability must become an ideology of profit and sustainability if we are to prosper, not stagnate in poverty.  The real question is whether commerce can ever be truly sustainable regardless of profit or growth, taking into account the nature of inputs and resources required for business operation.  Therefore is greenwash inherent in any business claim about their ‘sustainability’?  Is the ‘deep’ green perspective actually just a rationalisation drawn to its logical conclusion?

Rondinelli (2000:10) suggests the Reduce-Reuse-Recycle ideology is part of ‘social responsibility’, a notion introduced by Brundtland’s SD definition.  It might then be possible to interchange one pillar for another in ideological terms only if the result contributes to holistic, tripartite sustainability.  Sustainable resource use becomes not only an environmental issue, but also an economic and social one, and by extension, commercial.

5       Reasoning

Humankind’s unsustainable burden on world economies and planetary systems necessitates a radical shift towards sustainability in the widest sense.  Reducing our environmental burden (I/impact) requires reductions in the I=P*A*T equation’s right-hand side.  No-one seems to address the Population issue, as there are few feasible, realistic or acceptable measures; decreasing Affluence results in increased poverty and population (Hart, 1997).  Although these are societal issues, Hart suggests the ‘Technology’ used in goods and services to create human wealth is actually the central focus of business.

Until the late 1990’s sustainability strategy was framed in operational or technical terms.  More recently, explanations for pursuing CS include:

  • positive or green ideology/social responsibility,
  • pressure response,
  • PR/engagement,
  • risk reduction/damage limitation,
  • regulations adherence,
  • cost-cutting/profit,
  • survival (see Hart, Livesey, Everard, ibid.)

Such intentions are presumably determined by prevailing conditions, available ‘information’, and perspective, potentially co-dependent and co-produced.

Research has identified a wide variety of different approaches to, and types of, CS activities, asking whether are they worthwhile, successful, necessary, sufficient (See Singh et.al., 2009; Livesey, Rondinelli, etc.).  Several large companies – including Alcoa, AkzoNobel, Johnson & Johnson, Siemens, Staples, Target, United Technologies, and Wells Fargo – cite dwindling resources resulting from development and population expansion pressure as a major factor in this drive toward a competitive edge in a weak economy, working to develop a “sustainable trajectory” for their business (Perera et.al.,2013.).

Companies recognising added value in sustainability seize opportunities for revenue growth (Hart, 1997).  Bansal (2004) identifies why and how organisations are evolving sustainably, several variables can contribute to CS adoption:

  • International experience
  • Capital management capabilities
  • Organisational Slack
  • Fines and penalties
  • Mimicry
  • Media Attention

Varying levels of commitment, scale and penetration exist, summarised below.

Perera.et.al-2013; Table1-Barriers to scaling Invest in CS

Perera.et.al-2013; Table1-Barriers to scaling Invest in CS

Source: Perera et.al.,2013

Despite both positive benefits and negative consequences, CS efforts continue to be marginalised, lacking priority in core corporate strategies, competing against profitability targets and product/service development (Perera et.al., ibid.).  Rondinelli reports that CS efforts represent only a ‘small fraction of annual sales’ (ibid.).  A critical view similar to Livesey’s discourse analysis (2002) might suggest that CS attempts to legitimate business operations through public relations despite the gross imbalance of environmental investment versus commercial profits, as in the oil industry.

Although significant successful CS operations exist, it must not be assumed that all CS initiatives are successful or significant.  Two opposing perspectives emerge.  As in the case of Interface carpets, CS can be deeply embedded, strategically prioritised and implemented in ways that deliver successful and significant sustainability outcomes (Strong CS).  At Shell for example, CS was condition-responsive, adopted in a form that suits those conditions, and delivers successful outcomes that may only achieve small or incremental benefits, but are accepted as benefits regardless (Weak CS).

For many, sustainability remains just another externality in the quagmire of corporate regulations and demands.  In economically challenging times, businesses question undertaking costly sustainability measures when they seem to erode profits.  Begrudging or short-termist views prevent envisioning sustainability as game-changing progenitor of competitiveness, resilience and longevity.

6       Greenwash?

Very simply, greenwash is the process of, or outcomes from, promoting corporate activities as ‘environmentally friendly’ when they can be construed, argued or proven otherwise, either through false intention or failed implementation, usually in the continued drive for profit (Motavalli, 2011).  In assessing corporate accountability and representational integrity, Laufer identifies a body of literature that finds “corporate posturing and deception in the absence of external verification”, describing greenwash as form of “corporate disinformation (2003:253)”.

Corporations are easy targets for critics through their own advertising, corporate reporting and media relations.  From Greenpeace to NEF, Guardian, and WIRED, coverage abounds of companies making tenuous claims to eco-friendliness and green practices (Greenpeace, 2013; Meadway, 2012; Hagerman, 2008, etc.), such as PolandSpring’s claim for their eco-shape bottle (less plastic and paper): “A little natural does a lot of good”; and Airbus’ fossil-fuelled, CO2-spewing A380: “A better environment inside and out.”

Unfortunately, even non-commercial NGO’s promoting and implementing sustainability require funding; therein rests an artifice of CS (Barker, 2010).  Fundamentally, CS investments perpetuate capitalism however sustainable their operations or green their philanthropy.  Barker observes that:

“…[capitalists’] ‘radical’ investment has helped sustain the illusion that capitalism can be green and good for the environment …a win-win-win scenario for capitalism, but not for us.  Quite expectedly such good fortune has not been visited upon the environment, and capitalism has barely missed a beat in its profitable consumption of planet earth (2010:12).”

Likewise, with diverse businesses, each employing highly idiosyncratic and complex processes (supply chains/production/distribution/consumption), products, lifecycles (raw materials/design/marketing/manufacturing/packaging/distribution/use/disposal/reuse-recyle (Rondinelli, 2000)) and markets, the measures adopted aren’t enough to cope with the scale of the problem (Perera et.al., ibid.).

Despite apparently fruitful convergences such as the ‘SustainableBrands’ conferences, there are instances where companies aren’t genuine about their goals; greenwash becomes positive marketing spin, evident throughout commerce.  To combat misrepresentation and false advertising, several initiatives have been deployed, including:

  • sustainability and carbon reporting
  • ISO14001externally-audited standards,
  • crowd-sourced, internet-based GreenWashing Index,
  • US Federal Trade Commission’s enforceable Green Guide, “eliminating fuzzy, unsubstantiated or misleading environmental claims (Neff, 2012)”

These seem to have unfortunate side-effects for progress generally.  Neff reports strict guidelines are a problem for ‘incremental improvements’ if organisations are restricted from marketing their advances.

Livesey contends that corporate reporting/PR fails to challenge fundamental tenets of neo-liberal “markets, competition, and economic actors”, “demonstrat[ing] strong residual effects of the dominant discourse of economic development (2002:339)”, perpetuating the no-longer sufficient anthropocentric view of nature as a social resource Brundtland originally embedded.

7       Discussion

What should become clear is the necessity to differentiate fact, fiction and misinterpretation, with authorities seeking to limit the window for misleading statements and false interpretations, regardless of the motive or intention.  Critically, companies must assess not just their activities and impacts, regardless of whether intentional, accidental, or co-incidental, but also externalities.  Thus, external conditions and relations are increasingly important in modern business planning and operation, no matter the scale.

Combined with varied motives for initiating CS and methods for realising and publicising efforts, it is challenging to identify false claims to sustainability and greenwash, increasingly requiring professionals trained and employed for that purpose.  Add to this the preeminent ambiguity of ‘sustainability’ and ‘sustainable development’ terminology and their concomitant misinterpretations, we have an almost indecipherable complexity of variables to evaluate.  It is therefore variously unfair or disingenuous to label all CS efforts as greenwash.

Stuck with the current economic system, corporations must redouble their efforts in finding, implementing and perpetuating the balance between satisfying market demands (whether real, perceived or manufactured) and negatively impacting social, economic and environmental welfare.   Doing so will require addressing, minimising and/or eliminating the negative whilst concentrating on the positive, engaging stakeholders truthfully, and understanding interactions and impacts, whether they are, as Neff begins to suggest, related to policy, governance, management or input-output.  In CS, size matters, but only insofar as motive is ethical, intention is positive and application is congruent with beneficial results.

Understanding sustainability relationships between inputs and outputs must include life-cycle design with new methodologies to plan and mitigate impacts going well beyond intended end users, whose own motives, intentions and actions affect product or service sustainability.  Without demand, markets contract and companies fail.  Therefore, individuals now have a responsibility to demand sustainability.  Commerce is obliged to react with timely, innovative responses, thus ensuring resilience.  Only with the convergence of individual and corporate sustainability will we redress our currently unsustainable trajectory.

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3 comments on “Corporate Sustainability: Profit, Motive and Intention in Greenwash

  1. Pingback: Affluence and the Environment | ECOANT2013

  2. Pingback: The New Racism | Strangers and Aliens

  3. Pingback: Video: The Greening of Industry/Eco-innovation | Marc Hudson

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