05 Apr 2012: Report

Betting on Technology to
Help Turn Consumers Green

U.S. consumers tell researchers they want to buy environmentally friendly products, but so far they haven’t been doing that on a large scale. Now a host of companies and nonprofits are trying to use new technology — from smartphones to social networking — to make it easier for buyers to make the green choice.

by marc gunther

The way Dara O’Rourke tells the story, the idea for GoodGuide came to him when he was slathering some suntan lotion onto his three-year-old daughter’s face. O’Rourke, an associate professor of environmental and labor policy at University of California, Berkeley, wondered about the ingredients in Coppertone Water Babies; he did some research and learned it contained oxybenzone, a potential skin irritant. Later, O’Rourke found out that Johnson’s Baby Shampoo contained trace amounts of 1,4-dioxane, a probable human carcinogen. “It shocked me,” he says, “that I basically knew nothing about the products I was bringing into my own house.”

O’Rourke started GoodGuide to plug that information gap. A five-year-old company backed by $10 million in venture capital, GoodGuide employs about 20 people, including environmental scientists, chemists, toxicologists
Are there enough ‘conscious consumers’ to make an impact?
and nutritionists, who rate more than 165,000 products, including personal care items, household cleaners, food, toys, appliances and electronics. Each product gets a numerical rating from 1 to 10 in three categories — health, environment, and society; the ratings are then made available on GoodGuide’s Web site, on Facebook and on smartphones.

O’Rourke describes GoodGuide as a social enterprise, meaning the firm has a purpose that goes beyond making money: It aims to persuade consumers to vote with their wallets for environmentally-friendly products and companies, and thereby help tackle big problems, including climate change, biodiversity loss, and industrial pollution.

“There definitely is a growing percentage of consumers who are aware and who care and who are seeking out products that have better environmental, social, and health attributes,” O’Rourke says. “We view those consumers who care as point of leverage over these big, big systems.” These “conscious consumers,” as they’re sometimes called, are important to the work of activist groups who bring pressure on corporations to reform their environmental or social practices; companies feel compelled to respond because they don’t want to alienate even a small share of their customers or potential customers.

It’s a reasonable theory of change. But does it work? Are there enough conscious consumers to make an impact? Shoppers may tell market researchers that they want to buy “greener” products — but can they be motivated to act?


GoodGuide Product Analyzer
GoodGuide
GoodGuide ranks products on — among other factors — their impacts related to climate change, biodiversity loss, and pollution.
Questions like those face not just O’Rourke and GoodGuide, but many companies and nonprofits that are betting on the power of green consumers. Greenpeace, for example, rates the world’s largest electronics companies on their sustainability practices with the hope that consumers will reward leaders and punish laggards. (This tactic is known in the NGO world as “rank ‘em and spank ‘em.”) Similarly, nonprofit Climate Counts scores big corporations on their efforts to mitigate climate change and urges consumers “to use their choices and voices” to pressure more companies to act. Taking a slightly different approach, BuyGreen.com is a shopping Web site that positions itself a “trusted source for green products.”

The most ambitious effort of all, a global initiative known as The Sustainability Consortium — which was received startup money from Walmart and now includes retailers, consumer products companies, and universities — is building scientific tools to measure and report on the lifecycle impact of thousands of products; but its progress has been painfully slow.

No one doubts that green consumers can make difference. They can be credited for the success of a slew of small and mid-sized U.S. companies like Annie’s Homegrown, Seventh Generation, and Stonyfield Farm that have built brands imbued with environmental goodness. (Annie’s, best known for its organic mac and cheese, had sales of nearly $120 million in 2011 and had a successful IPO last month.)

Jeffrey Hollender, the former CEO of green-cleaning company Seventh Generation, says the success of these socially-responsible insurgents has changed the practices of big companies. SC Johnson, for instance, listed all of the ingredients in its products only after Seventh Generation had done so. “Successful companies have learned to be incredibly sensitive to consumers,” Hollender says.

Since the launch of GoodGuide in 2007, O’Rourke says, more than 12 million people have visited the company’s Web site and used its mobile applications. Companies are paying attention, too, and taking steps to improve their
‘We’re going up against millions of dollars of marketing,’ says GoodGuide’s founder.
product scores. “Basically, all of the consumer products companies are calling us up and want to interact,” O’Rourke says. While it’s difficult to trace any specific change to GoodGuide, Johnson & Johnson and Procter & Gamble have reformulated their shampoos to reduce toxins, including 1,4-dioxane. And Clorox created Green Works, a line of cleaning products on which it has partnered with the Sierra Club.

In opinion surveys, large majorities of consumers consistently tell researchers that they care about environmental and social issues. But the numbers that really count — those at the cash register — tell a different tale. While hybrid cars are trendy, their market share peaked in 2009, at less than 3 percent of all new vehicles sold. Green laundry detergents and household cleaners make up less than 5 percent of sales in their categories, industry insiders say. Organic foods provide an impressive growth story — their sales have ramped up from $1 billion in 1990 to $26.7 billion in 2010, according to the Organic Trade Association; but their popularity is driven more by health concerns than by environmental awareness.

This debate isn’t new. Joel Makower, the founder of media company GreenBiz, is skeptical about the power of green consumers — to whom he has been paying close attention since 1991 when he was co-author of a book, The Green Consumer. “A small percentage of consumers, by changing their habits, can move markets,” Makower says. “It’s an incredibly compelling notion. I just haven’t seen it in the market.”

The idea of buying green simply doesn’t seem to drive consumer behavior, Makower notes. “Why we can’t move people to a greener household cleaner or a recycled bathroom tissue or an energy efficient light bulb in greater numbers than we’ve seen so far is one of those enduring mysteries,” he says.

In an interview at GoodGuide’s offices in San Francisco, O’Rourke admits that the company still has a lot to prove. (The 44-year-old academic is now chief sustainability officer at GoodGuide; the board hired George Consagra, a longtime technology executive, as CEO last year.) “I want to be honest about hard this is,” O’Rourke tells me. “Originally we thought that information will set you free. But we’re going up against millions of dollars of marketing.”

And yet marketing isn’t what it used to be, he notes. No longer can companies control their message. More than a decade ago, O’Rourke learned firsthand how putting a spotlight on corporate malfeasance can drive change. As a graduate student at Berkeley in 1997, he was researching
When shopping online, customers can now see how products perform on issues they care about.
pollution from factories in Vietnam when he came across a leaked internal document about a Nike shoe supplier. It showed that workers were exposed to carcinogens that exceeded legal standards, suffered from respiratory problems, and were forced to work 65 hours for just $10 a week. He provided his findings to The New York Times and posted a report on the Internet, setting off a controversy that led to a turnaround at Nike, which is now seen as a corporate leader on environmental and social issues.

His experience with Nike “showed both the potential of a new way to distribute information, and, for me, how important it is to get my research out to the public,” O’Rourke says. “GoodGuide is basically an extension of that.”

GoodGuide began with a mobile phone app that required consumers to photograph bar codes to get data on individual products. It then posted reams of information on its Web site. Now it offers a popular iPhone app, as well as software called a Transparency Toolbar that attaches to a Web browser. When shopping online at Amazon, Walmart, Target, and other sites, shoppers can see how products perform, according to GoodGuide, on issues they care about. A GoodGuide app can also ride atop Facebook, rating the products and companies in any ads that appear. GoodGuide intends to make money by providing specialized data to retailers or institutional buyers, such as hospitals; it currently generates revenues when consumers go through GoodGuide’s Web site or toolbar to make purchases on Amazon.

The company’s goal is to “get into the flow of the shopping experience and try to provide the right information at the right moment,” O’Rourke says. GoodGuide has offered to make its data available for display on supermarket and drugstore shelves, but so far it has found no takers. Some retailers may worry about how their store brands would perform; others make money by selling prime shelf space to specific brands, so negative ratings could get in the way of that business.

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Still, it’s only going to get harder to keep consumers in the dark. Environmental groups and consumers are pressing to learn more about how and where things are made. Campaigns around palm oil in Kit-Kat bars, BPA in baby bottles, and, most recently, the ammonia-treated ground beef extender known as “pink slime” have all triggered rapid reactions from business. “Spikes of information, or misinformation, in social media can pressure business practices in a big way,” says Jonathan Yohannan, an executive vice president at Cone Communications.

In such instances, the consumer doesn’t need to act. Merely the fear of exposure and a backlash can spur change. Says O’Rourke: “Transparency is moving forward. That’s unstoppable. Our big bet is that transparency is going to motivate change.” It’s too soon to say whether that bet will pay off.

POSTED ON 05 Apr 2012 IN Business & Innovation Forests Policy & Politics Pollution & Health Science & Technology Central & South America North America 

COMMENTS


Ironic, is it not, how so many mined metals, ranging from the ordinary (iron, copper, aluminum, etc.) to precious (silver, gold, platinum) to the numerous Rare Earth Elements, are used in the very equipment that people will use to make thoughtful purchases - then turn around to protest... mining?!

Posted by Greg Durocher on 05 Apr 2012


RE: "Johnson & Johnson and Procter & Gamble have reformulated their shampoos to reduce toxins, including 1,4-dioxane."

With deep respect to Good Guide's efforts, the green mom's carnival group and their friends had more to do with J&J reformulating their shampoo than Good Guide. In 2009, no one even knew Good Guide existed.

http://www.inwomenwetrust.com/2009/04/bubble-bubble-toil-and-trouble.html

Moms started the pressure points and two years later, J&J announced its change which is about how long it takes to switch out a legacy product line.

Please give women some credit for their years of work to educate mainstream consumers and business. J&J didn't meet with Good Guide during this time, it met with green mommy bloggers.

Posted by Mary Hunt on 06 Apr 2012


It seems to me that although the efforts to drive producers to make sustainable produce is worthwhile, the health risks may not be such a viable category for assesment of a product. Just because something contains a toxic chemical, it doesn't mean it is present in quantities that make it a hazard.

Using the examples given in the article, surely the shampoo and lotion will have been tested for negative health effects before release onto the market, so the small amounts of these dangerous chemicals probably have negligible risk.

When people publicly draw attention to the fact that a product contains a trace (only a trace) amount of a carcinogen (or another chemical that can be harmful in large quantities), I think it merely distracts the companies attention away from potentially more important issues, such as sustainability development, and they must spend time and money alleviating a 'problem' that may not in fact be a real problem, so as to give consumers the impression that they are listening to what they want.

In reality, is a trace amount of carcinogen in a baby shampoo is going to significantly increase the chance of getting cancer? Maybe the customer isn't always right, after all.

Posted by John Smith on 10 Apr 2012


@John, it is the cumulative toxic effect from many products, not just one product. The average woman uses 12 personal care products a day which may have questionable toxic ingredients in it. Check out the safe cosmetic campaign for more information.

@Marc, I want to echo Mary. Mommy/Women bloggers are the ones that campaigned the J&J resolution not Green Guide. Women are constantly the catalysis behind change.

As for Good Guide, they also need to listen to women. Some of my friends have questioned their rankings but their response has been inadequate. Although their intent may seem good, their customer service is lacking.

Personally, I rely more on EWG's Skin Deep database and respected women bloggers.

Posted by Anna@Green Talk on 11 Apr 2012


The folks behind Green Guide have good intentions, but the problem with the ranking system is that it relies on information provided by industry. But some of the most important information for consumers to know is proprietary and not required to be disclosed to the public. Take, for example, chemicals in plastic products and packaging. Good Guide does not address chemical additives because companies are not required to disclose them so some products may be getting artificially high ratings and actually rewarded for their lack of transparency.

Also, I agree with the two commenters above... Good Guide has not responded well to feedback from green mom bloggers who probably have the biggest voice in getting the word out about toxic products.

And to @John above, if it's possible for a company to create a product without any toxic chemicals (it is!) then why let them off the hook because they only use a small amount of a carcinogen? By forcing companies to reformulate their products, we are reducing the overall amount of toxic chemicals manufactured and released into the environment in the first place.

Posted by Beth Terry on 11 Apr 2012


Marc, with respect to Good Guide I echo comments of Mary, Anne and Beth above.. "Green" women/mommy blogger groups, including the Green Moms Carnival are voices that are being sought after by individual consumers as well as corporations and a wide range of media and marketing organizations. With the explosion of social media and the recognized purchasing power of women, not only are individuals seeking out green bloggers to guide them in their purchase options, but "brands" are looking to these resources in the opes of being identified and "endorsed" by them ..often ahead of sites like Good Guide...

Posted by Harriet Shugarman on 11 Apr 2012


The idea of creating green consumer is such a wonderful concept. Appealing to them on social networks and is a fast forward idea that should be accepted by most today, but the applications still need to be directed at those not online. Not all of those directly affected have online capabilities and my benefit from an advertisement. I think that it is imperative for consumers to be aware of products they are bringing into their homes.

Also, going green is not an easy transition for most people. I understand that it is necessary
and provides nothing but benefits for the environment and those who go green, but it is not a "cheap" process. For those of us in the middle to lower class the initial sting of the cost is a problem to be noted. This class makes up the majority of economic spending, and maybe appealing to those by creating a cost effective market would be beneficial. On average, those that buy organic foods spend approximately more than $20.00 per week than those who purchase non-organic. This may seem like a subtle difference unless you don't have an extra $20 dollars to spend every week. I am not arguing that the cost is not worth the benefits, but simply that it can be very difficult for everyone to buy these products.

I feel the pros that Good Guide provides outweigh any of the cons. People of all economic classes need to be aware of the impact the products we consume have on our direct lives. At the same time, I do feel that some effort should be put forth to include those in the lower
economic classes and make it easier for green practices to be obtained.

Posted by Ashley on 19 Apr 2012


For most of us, these green measures are a sign of progress. They're helping the environment, right? If the sheer number of "environmentally friendly" products on the market is any indication, consumers seem pretty eager to do their part. And whether the manufacturers are acting out of genuine environmental interest or simple financial interest in meeting consumer demand — that's beside the point, right? We're reducing our carbon footprint, recycling stuff and supporting local farmers.

The expanding trend toward green consumerism indicates, at the very least, widespread recognition that the planet is in trouble, and some sort of intention to do something about it — however small that something may be. Maybe that step is picking the compact fluorescent light bulb (CFL) instead of the incandescent one. There's little doubt that when it comes to a necessity like light bulbs, green consumerism works — few people are going back to candlelight in order to help save the planet.

But with the increase use of smart phones today, maybe a green app is the answer. If you are being constantly reminded to be green then well, why not do so. A quote that the stood out to me that the author had made, “Transparency is moving forward. That’s unstoppable. Our big bet is that transparency is going to motivate change.” The choice to either go green or not is taking its place among statuses such as social classes. How green you are can ultimately determine your spot in a community or society as a whole. The future for green consumerism and our technology that will help us get there is only just being born. It will have a dynamic and interesting lifespan in the years to come.

Posted by Eldon Ford on 19 Apr 2012


In Vermont, Efficiency Vermont buys down the cost of CFLs to $0.99 through partnerships with retailers. That more than better information is what has really moved VT consumers to purchase millions of efficient light bulbs. People are very sensitive to price. All things being equal, they'll choose the green product, but price usually wins out.

Posted by Emily on 19 Apr 2012


For consumers to buy environmentally friendly products on a large scale, I believe two things have to happen: green products have to be price competitive and the general public needs to be educated. We need to find a way to be both reasonably priced and environmentally friendly. Finding a sustainable fuel source is a good example. We are not going to find a fuel source to take the place of gasoline until we develop one that is cost effective and sustainable. We have to develop one that the general public will be able to afford and then free market will demand it.

Technology is a powerful tool to dissipate information and should absolutely be utilized for the environmentally friendly marketplace. As consumers become more aware of how chemicals in products may affect their health or the environment, they will be more apt to buy green. This also goes hand in hand with educating consumers on which products are environmentally friendly and available.

I believe when we see these two things happen, the shift will occur to consumers purchasing green products on a large scale.

Posted by Carrie on 20 Apr 2012


I recently have become educated on the harmful effects of many products that I have been using for years. I was shocked! I agree that the public should be made aware of the ingredients that are in a product and the affects of long-term use. As the article suggested, the stores do not want any items to be labeled as unsafe to sustain their profits. I think that the idea of an app for a phone is a great opportunity for consumers to learn about the level of harm a product can have. It is quick and convenient.

The cost of many green alternatives is one of the greatest road blocks that will have to be overcome. As I searched for comparable prices for green paint for example, I could not find any that were close to the same price. Green Planet sells paint that is wonderful for our use but costs $55.00 a can compared to the $15.00 that I usually spend. That's quite an increase. Suntan lotion at Green Planet was $32.00 for about 5.5 ounces. I would love to completely go green, but frankly can't afford some of the alternatives. Many people would switch over to healthier alternatives if prices were lower. Good Guide will at least help people like me to be educated.

Posted by Amanda on 20 Apr 2012


After reading this article and downloading the good guide application on my phone I began to think about ways I can makes changes in my own personal life to go green. Around my household we already recycle everything possible and purchase many green products, but this lifestyle is more time consuming and expensive than the alternative.

I think education is key to begin the green revolution, and we need to start in younger children and school districts. Some people are not educated on what products may be green and what products are not environmentally friendly. I think this app and others like it are a step in the right direction and once the economy begins to recover and people have more spending money then maybe the push for green will become more viable.

Posted by Ryan on 23 Apr 2012


Comments have been closed on this feature.
marc guntherABOUT THE AUTHOR
Marc Gunther is a contributing editor at Fortune, a senior writer at Greenbiz.com and a blogger at www.marcgunther.com. His book, Suck It Up: How Capturing Carbon From the Air Can Help Solve the Climate Crisis, is available as an Amazon Kindle Single.
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