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GLOBAL: False 'Green' Ads Draw Global Scrutiny

by Tom WrightWall Street Journal
January 30th, 2008

With companies eager to tout their "green" credentials to consumers,
advertising watchdogs in a number of countries are stepping up efforts to
rein in marketers that make false or exaggerated claims.

In one of the latest examples, the United Kingdom's Advertising Standards
Authority found this month that a series of television ads by the
Malaysian Palm Oil Council misleadingly claimed the industry was good for
the environment. In one ad, which appeared on satellite channels across
Europe, Asia and the U.S., a man jogs through a natural rain forest,
interspersed with shots of palm-oil plantations and wildlife. "Malaysia
palm oil. Its trees give life and help our planet breathe," the voice-over

The problem: Oil-palm plantations, which produce a vegetable oil used in
products such as margarine and soap, have often been planted in illegally
cleared natural rain forests. In neighboring Indonesia, where Malaysian
palm-oil companies own large operations, plantation development is
destroying the natural habitat of species such as the Sumatran elephant,
environmentalists say.

"We concluded that the ad was likely to mislead viewers as to the
environmental benefits of oil-palm plantations, compared with native rain
forest," the U.K. authority ruled.

One limitation with these groups is that the fact-finding process can
sometimes take so long that the offending ad is no longer on the air when
the ruling is issued. That's what happened with the Malaysian Palm Oil
Council, which wasn't affected by this month's decision, because it had
already stopped showing its ad last year. The Advertising Standards
Authority can take as long as a month to make a decision.

From the U.S. to Norway to Belgium, watchdog groups are trying to police
against the rise in bogus environmental marketing, a practice known as
greenwashing. In most cases, these groups are set up by the advertising
industry and run by a third party, and they operate on the honor system.
When the watchdogs are set up, marketers and ad agencies agree to abide by
their rulings, which often means dropping ads that are deemed deceptive.
If the marketers later fail to do so, they run the risk of bad publicity
or possibly even litigation. Only in a few countries, such as Norway, can
regulators impose fines.

Environmental advocates say the increased vigilance is welcome, even if
the watchdogs have limited powers. "Since the climate-change issue is hot,
in Europe there's a load of 'greenwash' advertising," says Paul de Clerck,
a campaigner with Friends of the Earth Europe.

In the U.S., the Federal Trade Commission, which oversees advertising
claims, began hearings this month to determine the kinds of claims that
can genuinely qualify as green marketing. The FTC plans to update its
environmental advertising guidelines, which were last revised in 1998.
Those guidelines set standards for terms such as "recyclable" or
"biodegradable" in the advertising of products. But they don't deal with
standards for trendier environmental claims such as "carbon neutral,"
where a company asserts that it has offset the amount of carbon dioxide (a
heat-trapping greenhouse gas) emitted in making its product.

Sometimes, companies try to knock a rival business's products as bad for
the environment to gain a competitive edge. The National Advertising
Division of the Council of Better Business Bureaus, a U.S. industry-run
advertising body, last year ruled that Born Free LLP, a distributor of
infant feeding bottles, had to drop ads that claimed that the plastic used
in a competitor's bottles was unsafe for both the environment and kids.
The division says it heard no environmental cases from 2000 to 2006, but
has adjudicated six since then.

In Norway, government regulators in September banned all car ads from
stating that their vehicles are "green," "clean" or "environmentally
friendly" on the grounds that all car production leads to more, not fewer,
carbon emissions. The Belgian industry-run, advertising-standard authority
in October ruled that Swedish auto maker Saab Automobile, a unit of
General Motors Corp., must pull a print campaign in which it claimed that
its "Biopower" range of cars make the roads "finally turn green."

Despite the regulatory backlash, companies are often loath to use subtle
language to advertise their environmental claims for fear the ads won't
stand out, says Mike Longhurst, a London-based executive with
McCann-Erickson, a unit of Interpublic Group.

"Clients prefer to say it's good for the environment, rather than it's not
so bad for the environment," Mr. Longhurst says.

Malaysia's palm-oil industry decided to come out with its TV ad because
environmentalists recently have stepped up attacks on palm oil, calling it
a major driver of forest loss: Trees soak up carbon dioxide, and cutting
them down emits huge amounts of the heat-trapping greenhouse gas back into
the atmosphere, spurring global warming.

The Malaysian Palm Oil Council, a grouping of producers, hired TWBA
Worldwide, a unit of New York-based Omnicom Group, to promote the
industry's green credentials. "We decided it was about time we gave a
public-service announcement to the consumer," says Yusof Basiron, chief
executive of the palm-oil council.

But the U.K body ruled that by blending footage of rain forests and
oil-palm plantations, the ads misled the public.

The council maintains that since 1990, all oil-palm plantations in
Malaysia have been planted on already denuded land, not natural rain
forests. It also says it didn't mean to imply that oil-palm plantations
were as biodiverse as rain forests.

"A lot of the implications were something we didn't intend in the ad,"
says Aaron Cowie, chief operating officer of TWBA Worldwide in Malaysia.

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