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3.3.1 Credible Communication and Greenwashing

An organization's environmental legitimacy is based on perceptions of its environmental performance, not necessarily its actual performance. Therefore, the credibility of an organization's environmental communication is an important determinant of its environmental legitimacy (Hunter and Bansal 2007). Credible communication provides detailed information on topics that stakeholders would expect to be discussed, supplemented with illustrative examples. Non-credible communication is more opaque and general; omits important facts, topics, and discussions; or presents more favorable information than would be expected. Credible communication is transparent and comprehensive. Transparent communication involves letting external (and internal) stakeholders know what the organization is “really” doing. For example, a transparent environmental report presents specific information about activities and goals, such as “reduce CO2 emissions by 20 % by the year 2006.” Opaque communication uses less specific terms such as “reduce emissions.” Comprehensiveness is whether the “full story” is presented or if enough detail is provided to meet reasonable expectations. A comprehensive environmental report provides information about a range of practices such as the amount spent on an environmental initiative, the number of people executing it, and the type and amount of pollution to be reduced. Less comprehensive reports provide little if any information about activities or policies. Best Practice: Craft transparent and comprehensive messages.

Credible Communication at Tyson Foods and the Arbor Day Foundation Two of my interviewees shared their thoughts about credibility. In deciding what to include in Tyson Foods' sustainability reports, Kevin Igli, Senior Vice President and Chief Environmental Health and Safety Officer at Tyson Foods, Inc., said:

As you begin to examine and write a report about your organization, you have to create a fact book. We go through a process that is similar to a massive financial audit. Any time we write one of these reports we have a room full of lawyers and others. We fact check everything we say. I mean we lock it down and button it up. You have to. And for us the result has been the challenges we have seen to our sustainability reports is that there have really not been challenges.

I asked Woodrow Nelson, Vice President of Marketing Communication, how the Arbor Day Foundation managed their reputation so that other organizations feel comfortable partnering with them. His comment pointed to a Best Practice: Be accurate and do what you promise:

Number one, we are going to do what we say we are going to do, and we are not going to promise something that we are not going to be able to deliver. We have corporations who come and want to do the right thing—they want to give back, they want to plant trees.. . There are others who want to count carbon offset credits, and we are not going to do that because we are not able. We can't [we don't have the staff] verify that carbon still stands in a particular forest. If we can't verify it, we are not going to tell people we can.

Information not seen as credible may be labeled as greenwashing. Greenwashing is a strategy that companies adopt when they engage in symbolic communication about environmental issues without substantially addressing them through action (Walker and Wan 2012). It involves disseminating misleading information so as to present an environmentally responsible public image (Cox 2013). For example, some companies highlight a sideline of the business which is seen as more legitimate (e.g., British Petroleum's claim to be a world leader in solar energy while they derive 90 % of their income from hydrocarbons) or stress their operational efficiencies although it is their products that come into question (Emtairah and Mont 2008).

In one of the first studies to link greenwashing with the financial performance of

a firm, Walker and Wan (2012) examined over 100 top performing Canadian firms in visibly polluting industries. They differentiated between greenwashing and green highlighting. Green highlighting is when an organization provides both symbolic and substantive action talking about what they are currently doing or have done (substantive action) or their green walk and what they plan to do in the future (symbolic action). They measured financial performance using return on assets (ROA) and found a negative relationship between financial performance and greenwashing and between financial performance and only communicating symbolic actions (e.g., goals and future actions). They did not find a relationship between financial performance and communicating about substantive actions or green highlighting. The strength of their article was in their distinction between greenwashing and green highlighting rather than their conclusions about the financial implications of the messaging. Obviously, an organization's ROA is a function of much more than the messaging strategy appearing on the corporate website.

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