'Greenwashing' might be financially beneficial--until your customers catch on: Across all industries, overstated sustainability initiatives run rampant.

• Author: Manos, Diana

CONSUMERS INCREASINGLY WANT to purchase eco friendly products--and they're willing to pay more for them, according to a recent survey. But how do consumers know if a product, energy or service is truly sustainable?

They don't, according to Larry Baxter, professor of chemical engineering and a sustainable energy researcher at Brigham Young University. Some organizations may claim to certify sustainability, but there is no generally accepted metric or organization that does so, he says.

"It is common for companies and governments, including the US government, to misrepresent their efforts to mitigate climate change, just as it is for them to misrepresent other socially sensitive contributions," Baxter says. This makes it very difficult for consumers to assess the net benefits of the product, service or activity being promoted. This makes it difficult for consumers to make good choices and for policymakers to establish priorities and use resources wisely.

"Greenwashing is a term used to describe overstating or misrepresenting efforts to support sustainability, and it does more damage than just misinforming the public or other reviewers," Baxter says. "It also can inappropriately direct funding and priorities to activities that do little to increase sustainability but may be financially or otherwise beneficial to the perpetrators. It can also encourage activities that have little value, creating an opportunity cost for those that do."

Not only are consumers confused or kept in the dark, but in some cases, companies don't even know the truth behind their products. A study conducted by Google Cloud shows that many companies think they're doing better than they are on sustainability.

Eighty percent of the executives surveyed give their organization an above-average rating for their environmental sustainability effort, according to the Google Cloud study. Eighty-six percent believe their efforts are making a difference in advancing sustainability, yet only 36 percent of respondents said their organizations have measurement tools in place to quantify their sustainability efforts. Just 17 percent are using those measurements.

How, then, can you know what products to use? Baxter advises consumers, first and foremost, to inform them selves enough to be able to see through advocacy and other one-sided representations. "In this regard, it is good to focus on finding a correct answer and not be unduly influenced by emotional or attractive and/or effective...