FightBack Blog

The Truth About Green Marketing

We are now living in a world in which environmental factors have become a concern in everything that we do.  From recycling to fuel efficiently, most Americans are now concerned with how their lifestyle effects the sustainability of the planet.  Furthermore, many are now watching the types of products that they use, and are making sure that these products are environmentally friendly.

According to the American Marketing Association, green marketing is the marketing of products that are presumed to be environmentally safe. Green marketing incorporates a broad range of activities, including product modification, changes to the production process, packaging changes, as well as modifying advertising.

The past decade has shown that harnessing consumer power to effect positive environmental change is far easier said than done. The so-called “green consumer” movements in the U.S. and other countries have struggled to reach critical mass and to remain in the forefront of shoppers’ minds. However, because of the growing global concern about climate change, many companies now advertise their commitment to reducing their climate impacts and the effect this is having on their products and services as a means of attracting consumers who have become aware.

Green marketing is a technique that is growing exponentially. One of green marketing’s challenges is the lack of standards or public consensus about what constitutes “green”. This lack of consensus—by consumers, marketers, activists, regulators, and influential people—has slowed the growth of green products because companies are often reluctant to promote their green attributes, and consumers are often skeptical about these claims.

How will we, as consumers, know what to believe when it comes to green marketing? Sure, we want to buy products that are sustainable or are made with concern in regards to the environment, but it seems as though every company is making the claim about being “green”. Recently, the FTC began reviewing its Green Guides to lay out the groundwork for what constitutes a green claim. These guidelines should help consumers decipher what is real and what is not when it comes to green marketing.

The Green Guides was designed to help marketers avoid making environmental claims that are unfair or deceptive under Section 5 of the FTC act. However, I have found that referring to these guidelines can also help consumers decipher what is real when it comes to green shopping. The Green Guide breaks down its guidelines in this manner: biodegradable, compostable, recyclable, recycled content and ozone safe. These are the pillars of what defines a product or a company as “green”.

In addition to the original Green Guides, the FTC and the CBBB, Council of Better Business Bureaus, have recently issued some key revisions to the guide:

-   Marketers should not make unqualified general environmental benefit claims such as “green” or “eco-friendly”.

-   Seals and Certifications are considered “endorsements.”  This means that marketers may need to disclose any material connections with the certifier.  Third-party certification does not eliminate a marketer’s obligation to have substantiation for its claims.

-   An unqualified claim that a product or package is biodegradable means that it will completely decompose is no more than one year after customary disposal.

-   The Guides address claims of recyclability and introduce a three-tiered analysis for disclosing the limited availability of recycling programs.

-   Marketers making “renewable energy” claims should specify the source of the renewable energy.  If a company sells Renewable Energy Certificates (RECs) for the renewable energy they generate, it should not represent that they use renewable energy.

-   Marketers making “carbon offset” claims should disclose if the offset purchase funds emission reductions that will not occur for two years or longer.

When shopping for green products, it is important to understand what green really entails.  Many companies simply claim to be green as a way to attract shoppers who are conscious of the environment, and want to do their part.  Other products have been designed legitimately to be environment friendly, and it is these products that we want to buy. While at times it may be nearly impossible for the consumer to decide what is green and what is not, these Green Guides should help restore clarity and integrity to the process, so that buy the time the product is on the shelf, it will have earned its green label.

The FTC has a variety of consumer resources to help explain certain environmental claims and other energy issues. The FTC has issued two brochures that are an excellent starting point: “Sorting out ‘Green’ Advertising Claims”: http://www.ftc.gov/bcp/edu/pubs/consumer/general/gen02.shtm

And “Eco-Speak: A User’s Guide to the Language of Recycling”: http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt049.shtm

For more information about the Green Guides, consult the Energy and Environment website at http://www.ftc.gov/energy

I came across this excellent article in the L.A. Times regarding supplements and caffeine:

If losing weight was one of your New Year’s resolutions, you might already be growing weary of counting calories and working out. Wouldn’t it be great if you could slim down without so much effort?

Anyone looking for a shortcut to weight loss might be tempted to try one of many supplements that claim to burn fat and boost metabolism. These products often contain a not-especially-exotic ingredient that’s already a staple of the American lifestyle: caffeine.

The morning coffee drinkers at Dunkin’ Donuts notwithstanding, caffeine has a strong reputation as a weight-loss aid. The stimulant is one of the key ingredients of Zantrex-3, the popular weight-loss supplement from Zoller Laboratories, based in Salt Lake City. The company claims each capsule contains “up to” 160 milligrams of “caffeine and caffeine-like stimulants” (from green tea and yerba mate, among other sources), while a government database of supplements says each capsule of Zantrex-3 contains more than 160 mg of caffeine. That’s slightly more than you’d get from a typical double shot of espresso. Other ingredients include ginseng and damiana, a Latin American herb traditionally used as an aphrodisiac.

Users are instructed to take two capsules with a glass of water before a meal or anytime during the day when they need an energy boost. According to the label, they shouldn’t take more than six capsules in a day. Zantrex-3 is available at many drugstores. You can expect to pay about $20 for a package of 30 capsules.

LipoFuze, a weight-loss supplement from E Nutrition Research, based in Orem, Utah, also packs a significant amount of caffeine. The label says that each capsule contains 200 mg of a green tea extract that is 50% caffeine. Other ingredients include vitamin D, chromium and coenzyme Q10.

Users are instructed to take two capsules a day. A package of 60, a one-month’s supply, costs about $50.

The claims

The website for Zantrex-3 says it provides both extreme energy and rapid weight loss — “546% more weight loss than the leading ephedra-based diet pill,” to be exact. The site features a picture of reality TV star (and official product endorser) Nicole “Snooki” Polizzi of “Jersey Shore” pulling a bottle of the pills out of her purse. (The website calls her a “celebrity,” and, yes, the term is in quotation marks.)

Amy Heaton, director of scientific affairs for Zoller, says that caffeine and caffeine-like compounds have been proved to improve energy, stamina, concentration, mood and metabolism. But, she says, “they have not been shown to significantly increase weight loss.”

Heaton adds that “it’s not just about weight loss. It’s about fat loss and increased energy.” To drive home the message, she points to Snooki’s transformation “from a self-professed meatball to a sexy and slim fireball.”

The website for LipoFuze says that the supplement “increases the metabolic mechanism in your body.” The site also says the green tea and caffeine will “rev up your metabolism” and “increase energy, focus and physical performance.” The site features testimonials it says are from users who claim they have lost huge amounts of weight with the help of LipoFuze. One man says he dropped more than 100 pounds, although it’s unclear how long that took. A woman says she lost 40 pounds in less than a year, including 20 pounds in her first month.

Attempts to reach E Nutrition Research for comment were not successful.

The bottom line

Caffeine shows up in a lot of weight-loss products, but it doesn’t seem to be any sort of silver bullet against flab, says C. Michael White, a professor of pharmacy at the University of Connecticut in Storrs. White says that, to his knowledge, there are no well-designed studies showing that caffeine works better than a placebo when it comes to weight loss.

White notes that caffeine is a diuretic, which means that people taking large doses might shed some weight through water loss, but that’s not the kind of slimming most users are looking for.

As reported in a 2010 issue of the International Journal of Obesity, caffeine may in fact be able to increase a person’s metabolic rate by 4% or 5%. But, according to White, there’s no clear evidence that this translates into actual weight loss. One possible explanation: Any increase in metabolism might go hand-in-hand with a boost in appetite, he says.

Caffeine does seem to enhance the weight-loss powers of some other ingredients, White says. For example, green tea contains antioxidants that encourage cells to burn extra calories, and caffeinated green tea seems to promote more weight loss than decaf versions. But even this combination yields very modest results. “In clinical trials, the weight loss is 2.5 to 4 pounds, not 40 pounds,” White says.

Gerald Endress, the fitness director of the Duke Diet and Fitness Center at Duke University in Durham, N.C., says patients often ask about caffeine as a weight-loss aid. “I tell them it’s definitely not going to be as helpful as 30 minutes of exercise.”

Endress says a little caffeine before a workout might help a person exercise harder and longer, which could theoretically help them control their weight. But the real credit would go to the exercise, not the caffeine.

Endress also warns that too much caffeine — such as the high doses found in Zantrex — could cause jitteriness, anxiety, spikes in blood pressure and rapid heartbeats in some people.

Fewer California companies offered their workers health insurance last year, and the ones that did charged employees more for their coverage.

That’s among the findings of an annual California Employer Health Benefits Survey released Wednesday by the California HealthCare Foundation, a research and grant-making nonprofit organization.

According to the survey, premiums for employer health insurance plans have risen 153.5% since 2002, a rate that’s more than five times the increase in California’s inflation rate.

In the last two years alone, the proportion of state employers offering coverage to workers fell to 63% from 73%, the survey said.

“This is a departure from previous years and could be an early sign of future changes,” the foundation report noted in commentary on data collected between July and October 2011 in interviews with 770 private firm benefit managers.

The steady rise in costs during a prolonged economic downturn contributed to decisions by about a quarter of employers to either reduce benefits or increase cost sharing for employees in 2011. A slightly smaller percentage, 22%, opted to make workers pay more of the share of the higher premiums.

Health insurance is expected to take even more money out of workers’ pockets this year. The survey indicated that 36% of California firms said they were either “very” or somewhat” likely to raise the amount that their staff paid in premiums in 2012.

Rising costs and shrinking coverage are accelerating, said Anthony Wright, executive director of Health Access California, a group that advocates for expanded health insurance coverage.

“They are frankly multi-decade trends,” he said. “What is notable is that this is more significant than usual.”

What’s been a “gradual erosion of employer-based coverage in good years” has evolved into “a steep one in bad years,” Wright said. “To be down to 63% [of California companies offering coverage] is huge. It used to be up over 80%.”

Patrick Johnston, president of the California Assn. of Health Plans, blamed the rising premiums on expensive technology, the spread of chronic disease and an aging population, among other factors. Johnston’s organization represents 40 California health plans that cover 21 million people.

What’s more, he noted that years of cutting reimbursements to doctors and hospitals by the government-run Medi-Cal program have created a “cost shift” that has to be “made up in negotiations for higher rates for commercial payers such as employers.”

Insurer profits, Johnston argued, are not a leading cost driver since publicly traded California insurers keep only 13 cents out of every premium dollar to pay for expenses and to secure earnings that average 3% to 5% of revenue.

Both Wright and Johnston predicted that full implementation of President Obama’s healthcare reform plan in 2014 could go a long way toward broadening coverage and to an eventual control of raging medical cost inflation.

“I hope that some of the reforms start to change the picture,” Wright said. “It’s clear that if we repeal [the law] or retreat back to the status quo, we will have some trends that simply are unsustainable.”

The new head of the Consumer Financial Protection Bureau is looking into the practices of Buy Here Pay Here auto dealers and the rapid growth of the industry.

“We are looking at that space,” Richard Cordray said Thursday at his first news conference since being appointed as director last week. “We’re concerned about it.”

Buy Here Pay Here dealers often target poor people and those with bad credit. Unlike conventional auto dealers, who act as middlemen in arranging financing, Buy Here Pay Here dealers lend the money themselves — at interest rates that can top 30%. That direct lending makes them subject to consumer bureau oversight.

The Times recently published a series of stories about the Buy Here Pay Here industry, showing how dealers take advantage of people desperate for transportation by selling high-mileage vehicles for much more than their Kelley Blue Book value.

Many buyers end up defaulting on the dealer-provided loans, and the dealers repossess the vehicles and sell them again.

Cordray had read The Times’ series and also had been made aware of problems with such dealers by Holly Petraeus, who heads the bureau’s Office of Servicemember Affairs, he said.

“She has kind of taught me how it’s affecting some of these young service members,” Cordray said. “They get behind in debt, and that debt — if they can’t manage it — potentially affects security clearances and the trajectory of their entire career.”

Military commanders have complained about predatory auto dealers who operate near bases and try to take advantage of young service members, many of whom are away from home for the first time.

The agency was created in the 2010 financial reform law to protect consumers from predatory lending and other abuses by financial firms. Cordray, a former Ohio attorney general, was installed last week by President Obama in a controversial recess appointment after nearly all Senate Republicans had blocked a confirmation vote in December.

On Thursday, the Justice Department‘s office of legal counsel released a 23-page memo saying Obama had the authority to make the appointment. Rep. Jeffrey Landry (R-La.) has promised to introduce legislation to block Cordray’s appointment, and a Citigroup Inc. executive predicted this week that there would be multiple legal challenges.

Thomas J. Donohue, president of the U.S. Chamber of Commerce, said Thursday that Cordray’s appointment was “deeply disappointing.” The chamber had no plans at the moment to sue, Donohue said, but he did not rule it out.

Cordray said honest businesses should embrace the consumer bureau because it would protect them from being undercut by irresponsible companies that don’t adhere to the same standards or that break the law.

“Like every responsible financial provider, they should welcome us, and we will be good for them,” he said.

Ken Shilson, founder of the National Alliance of Buy Here Pay Here Dealers, an industry trade group, did not return a call seeking comment.

The financial reform law exempted conventional auto dealers from oversight by the Consumer Financial Protection Bureau because they do not lend the money to buyers.

But the agency has oversight of Buy Here Pay Here dealers, who directly lend to consumers, and broader powers to prohibit unfair, deceptive or abusive practices in the financial industry.

Buy Here Pay Here dealers said the high interest rates are needed to offset the increased risk of default. They make an average profit of 38% on each sale — double the margin for conventional auto dealers, according to the trade group.