Features

There Is No Such Thing as a Green Product

By Trevor Zink & Roland Geyer

Stanford Social Innovation Review

Spring 2016

Copyright  2016 by Leland Stanford Jr. University

All Rights Reserved

Stanford Social Innovation Review

www.ssir.org
Email: [email protected]
26 Stanford Social Innovation Review / Spring 2016

Touting products like LEDs and recycled plastic packaging as “green” is misleading, because it fails to
, account for their effects on markets and consumer behavior and for the resulting environmental consequences.
The authors offer what they say is a better approach: measuring the overall “net green” impact of the product.

There Is No
Such Thing as a
Green Product

By Trevor Zink
& Roland Geyer
Illustration by JooHee Yoon
T here is no such thing as a “green” product. I’m afraid you read that
correctly. The corporate sustainability gospel—that green companies
sell green products, and green products have some absolute and well-
defined environmental attributes—evaporates on closer inspection.
Let’s first take a closer look at the current thinking about green
products. Most managers realize that virtually all products and services
have environmental impacts, just as they have economic costs. In other words, practi-
cally all products and services require the extraction of natural resources and cause
the release of wastes and emissions, and both these activities are almost certain to
affect the natural environment adversely. The environmental benefits of green prod-
ucts are not that they somehow fix the environment or have zero impact, but rather
that their environmental impacts are less than those of similar products.
Products can have an impact on the environment during one or more stages of
their life cycles, which are production, use, and end of life. A natural step is therefore
to tally up the environmental impacts of similar products throughout their life cycles
and compare the results. (The same can be done for services, which typically involve
the use of products, but we will mostly use product here to keep things simple.)
A whole new profession has sprung up that has become ever more sophisticated in
making these so-called attributional life-cycle assessments (LCAs).1 LCAs result in a set
of environmental impact indicators per product. When this analysis is used, product A
is deemed greener than product B if it has lower indicator results than product B. All
we need to determine whether a product is green is a benchmark product, which de-
fines the amount of environmental impact that is typical or average. A product is called
green when its life-cycle environmental impacts are lower than those of the benchmark.
Stanford Social Innovation Review / Spring 2016 27
28 Stanford Social Innovation Review / Spring 2016

This is the state-of-the-art thinking about green products. In Roland Geyer is associate professor of Trevor Zink is an assistant professor of
industrial ecology and green supply chain sustainability and corporate social responsibil-
fact, many managers and management scholars have a much cruder
management at The Bren School of Environ- ity at the College of Business Administration,
approach to greenness. Frequently, they simply look for one prod- mental Science & Management, University Loyola Marymount University.
of California, Santa Barbara.
uct attribute that can be labeled green and call a product green if it Note: Both authors contributed equally to
scores high in this attribute. This way bio-based materials (such as this article.

clothes made from natural fibers), products with recycled content,

and hybrid cars are labeled green products even without genuine them green. We felt unable to answer the question meaningfully.
analysis. LCA, with its life-cycle perspective and multiple environ- In the end, the foundation that licensed the story to the film studio
mental indicators, is clearly an improvement over such simplistic decided to not have any franchise toys at all, confirming the suspi-
thinking. Unfortunately, even adding life-cycle thinking cannot save cion that there was no meaningful benchmark product to determine
the fundamentally flawed concept of the green product. the greenness of the proposed recycled plastic franchise figurines.
There is an alternative approach that avoids these problems and
gives us a much better idea of the overall impact that a product or Green Products That Grow Market Demand
business activity has on the natural environment. We call it “net The examples where the correct benchmark seems to be no pur-
green,” because it calculates the net impact on the environment, chase at all overthrow the naïve assumption at the core of the green
after accounting for all factors, including the impact that the product product idea, which is that each product category has a constant or
or service has on markets and consumer behavior. We will explore at least predetermined sales volume, and customers simply choose
net green in more detail later in the article, but first it’s important among the alternatives within the category. That the problem goes
to understand the limitations of the popular idea that products far beyond choosing benchmarks can be illustrated with a close
themselves can be green. examination of the mother of all green activities: recycling.
How could recycling possibly be bad for the environment? First,
The Elusive Benchmark Product let’s recall the mechanism by which recycling generates environmen-
The trouble with green products starts with the seemingly common- tal benefits, using metals as an example. Recovering metal scrap from
sense idea that greenness can be determined through comparison discarded products and turning it into secondary (recycled) metal
to a benchmark product. LCAs would help you conclude that a has, of course, its own environmental impacts. Nevertheless, LCAs
hybrid SUV is indeed greener than a conventional, equal-sized SUV. show that those impacts are much smaller than those of producing
But the customer might actually choose the hybrid SUV instead of the metal from primary resources, that is, ores. If increased produc-
a conventional compact car with higher fuel economy. The bench- tion of recycled metal generates an equal decrease in primary metal
mark idea can be just as problematic for intermediate goods. An production, total environmental impact is reduced. So a product
example would be a utility that chooses electricity from natural gas made from recycled steel, aluminum, or copper should clearly be
over renewable electricity, and not over coal-based electricity as is greener than a benchmark made from primary steel, aluminum, or
typically assumed. Suddenly, the hybrid SUV and electricity from copper. Well, not according to the metal industries.
natural gas are not green any more. The metal scrap markets, argues the industry, are constrained
You may contend that these examples demonstrate that the by supply rather than demand. Therefore, increasing the recycled
benchmark product needs to be chosen carefully, but the problem content in your product will just force someone else to use primary
runs deeper than that. It can be argued that packaging made from metal instead, because there is not enough scrap supply for both
recycled plastic is green compared to identical packaging from the of you. As your environmental impact goes down, someone else’s
primary polymer. But a consumer may buy produce in recycled plas- goes up by the same amount. Therefore, the only way to decrease
tic clamshells instead of buying it without any packaging at all. The overall environmental impact, so all major metal associations have
benchmark would now be no packaging at all, which means that us believe, is to increase the supply of scrap. 3 A metal-containing
no packaging could possibly be green. Could this example just be a product is thus green if and only if it is recycled at the end of its
minor exception? We’re afraid not. life. Recycled content doesn’t matter.
Imagine someone buying a refurbished cell phone (or any other Chew on this for a bit. It gets worse.
refurbished electronic device) in addition to, rather than instead of, The argument above is essentially about whether increasing scrap
a new one, say as a backup device.2 Or picture someone buying the demand or scrap supply leads to higher levels of recycling. It has
refurbished product because she cannot afford a new one. What about plagued LCA practitioners and users for more than 20 years. What
someone who buys a brand new, very energy-efficient gadget, not in- all agree on, however, is that every kilogram of recycled metal avoids
stead of a less energy-efficient gadget, but instead of no gadget at all? the production of one kilogram of primary metal, given that they
Maybe the advertised greenness of the energy-efficient gadget even en- are technically equivalent. Again, the assumption behind this belief
couraged the consumer to purchase it instead of not buying anything. is that market size is given and fixed. Increasing secondary mate-
At this point we feel compelled to share the story of a company in rial production therefore must decrease primary material produc-
the business of making franchise toys for children’s movies—think tion by an equal amount. Unfortunately, this is unlikely to be true.
plastic replicas of superheroes, princesses, cowboys, astronauts, Let’s assume for a moment that the scrap market is supply con-
and Stormtroopers. An animated movie with a deep environmen- strained because recycled metals have a cost advantage over primary
tal theme was being made, and the toy company asked us whether metals, which would make scrap desirable. This could be seen as
making the franchise figurines from recycled plastic would make a beautiful example of the holy grail of corporate environmental
 Stanford Social Innovation Review / Spring 2016 29

sustainability, a win-win situation with double dividends, economic They all show that indeed LED lighting is the greenest source of
and environmental. But basic microeconomics also tells us that be- artificial lighting, measured in lumen-hours.7 But historical analy-
ing able to produce and sell a commodity at a lower price than your sis of artificial lighting shows that total consumption has increased
competitors will bring the overall price of the commodity down, dramatically as the cost of lighting has decreased. 8 Other studies
which in turn will increase the demand for it. In other words, recy- suggest that lighting demand in both developed and developing na-
cling metal scrap may not just reduce primary metals production, tions is far from being saturated, and that further decreases in the
but also grow the overall size of the metals market.4 This is good cost of lighting will undoubtedly lead to high levels of rebound, as
news for the metal industries, but bad news for the environment. users will leave lights on longer, illuminate more areas, buy larger
To be clear, we are not saying that recycling is bad for the envi-lit products (such as flat-screen TVs), and find whole new applica-
ronment, but that it is almost certainly not as good as you think. To tions for lighting (think, for instance, of the rapidly proliferating
summarize: The controversy over recycled content makes touch-operated LED-screen soda fountains).9 This could
the choice of a benchmark product difficult enough. even lead to what is called “backfire,” the situation
The fact that recycling may grow the market where the increase in lighting consumption
rather than displace primary metals produc- outweighs the increase in lighting efficiency
tion one-to-one makes it meaningless. If there
is no and leads to a net increase in electricity
such thing as a green consumption and related environmen-
Green Products That tal impacts.
product, is the pursuit
Increase Consumption Unfortunately, if backfire oc-
We would like to point out an emerg- of corporate environmental curred, it would not make lighting
ing theme. What makes the notion sustainability futile? Not at all, an outlier. A recent study of ten in-
of a green product so elusive is that but the goal shouldn’t be dustrial activities showed that, over
introducing or offering a green prod- the decades, growth in consumption
uct not only makes certain consumers
as simplistic as trying to outpaced efficiency improvements in
switch from a well-known benchmark sell as many green every case.10 (The ten activities studied
to the green product, but can have all products as possible. were production of pig iron, aluminum,
sorts of other unintended market effects. and fertilizer; electricity generation from
Not only can it increase the product’s market coal, oil, and natural gas; travel by rail, air,
size, but it can even increase the rate at which and motor vehicle; and residential refrigeration.)
the product itself is used. Probably the best-known ex- A product that reduces environmental impact per unit
ample of this phenomenon is the so-called “direct rebound effect” service but increases total environmental impact should not be called
of fuel-efficient vehicles. green despite its apparent eco-efficiency.
This is how the direct rebound effect goes: The owner of an old
SUV with poor gas mileage gets the brand-new hybrid version with Net Green to the Rescue
improved fuel economy, clearly a green version of the old car. In the If there is no such thing as a green product, is the pursuit of cor-
green product narrative, the owner drives a fixed number of miles porate environmental sustainability futile? Not at all, but the goal
every year, so the hybrid car will reduce gasoline consumption and shouldn’t be as simplistic as trying to sell as many green products
all related emissions. It will also save the owner money. There is, as possible. Efforts to increase the environmental sustainability of
however, considerable evidence that the owner will use some of corporations should lead to an overall reduction in environmental
the savings to drive more (for instance, taking a job that is farther impact, or be “net green,” as we like to call it.
away from where she lives, or moving farther away from her job). 5 We define net green thus: A business activity is net green if and
The larger this so-called direct rebound effect is, the less green is only if it reduces overall environmental impact. Although this state-
the hybrid vehicle. ment sounds straightforward, implementing it is not trivial, as
The logic of the direct rebound effect applies not only to cars, our discussion of the elusive green product has shown. One good
but to all products that consume energy during their use. Another thing about the net green concept is that it applies not just to sell-
example is the use of light-emitting diodes (LEDs) to reduce energy ing products, but to any business activity—and because a business
consumption and related environmental impacts from lighting. The is at some level simply a collection of activities, net green can be
breakthrough invention of the blue LED (necessary to create white used to evaluate entire businesses as well.
LED light) earned scientists Isamu Akasaki, Hiroshi Amano, and To illustrate the power of this seemingly simple concept, we will
Shuji Nakamura the 2014 Nobel Prize in Physics. The Nobel com- now apply it to a business model that is commonly thought of as
mittee hailed the LED as a “fundamental transformation of lighting green: car sharing. Car sharing, championed by companies such as
technology,” stating that because they are energy-efficient, “LEDs Zipcar, Flexcar, and RelayRides, is a business in which subscribing
contribute to saving the Earth’s resources. Materials consumption members can use cars on an hourly basis in cities and metropolitan
is also diminished as LEDs last up to 100,000 hours, compared to areas. Car sharing is different from car rental in that it is meant as
1,000 for incandescent bulbs.” 6 an alternative to owning a car. Selling services instead of products
As you may have expected, there are plenty of attributional LCAs is one of the mantras of corporate environmental sustainability,
comparing LED lighting to incandescent or fluorescent lighting. and it is seen by many as green even without any rigorous analysis.
30 Stanford Social Innovation Review / Spring 2016

Typical arguments for the greenness of car sharing include vague travel increase by previously carless users was small, car sharing
assertions that it is more efficient, and slightly more defensible (after averaging over all users) was found to reduce vehicle travel
claims that it reduces the total number of cars, such as Zipcar’s by more than 1,700 miles per user per year.
statement that “each and every Zipcar takes 15 personally owned Two secondary factors further enhance the net greenness of car
vehicles off the road.” 11 sharing. First, shared cars are, on average, more fuel efficient than
the cars owned by car-sharing users. The University of California,
Is Car Sharing Net Green? Berkeley, survey finds an average difference of 10 miles per gallon,
To determine whether car sharing is net green, we need to first increasing fuel efficiency from 23 to 33 mpg. This does not come as
identify and then quantify the ways in which car sharing causes a big surprise, because car-sharing companies include the gas in
changes in environmental impact. For cars and all other types of the price of the rental and therefore have a financial incentive to
transportation, the lion’s share of environmental impact happens use a fuel-efficient fleet.
during their use, not during the production of the vehicles. The im- The second factor is that car sharing does indeed reduce the num-
pact of transportation use is determined by the distance traveled ber of vehicles as Zipcar claims, but not in the way Zipcar thinks.
and the efficiency of the transportation mode. Alternative and public Zipcar counts all cars that car-sharing users sold after joining, or
transportation modes are typically more efficient than private cars. would have bought if they had not joined car sharing, as cars taken
There are four types of changes car sharing can effect in the off the road. This method of counting ignores that sold cars end up
transportation behavior of its users. First, joining a car-sharing on the used car market and are therefore still on the road, and that
service can lead users to increase or decrease their amount of car some of the forgone cars would have been used cars, too. The real
travel. Next, the shared cars might have higher or lower fuel ef- mechanism by which vehicle production is avoided is that car sharing
ficiency than the cars owned by its users. Third, car sharing can reduces the miles users travel in cars, which means that fewer cars
change the mix of transportation modes used by their members and are needed to meet aggregate transportation needs. Recognizing
the frequency with which they use them. And fourth, car sharing this decrease, we have independently estimated that every shared
can affect the total number of cars produced and sold, as claimed car avoids the production of just over half a car.13 This is much less
by Zipcar. In principle, the environmental impact of each of the than the 15 cars that Zipcar estimates, but still significant.
four effects could be positive or negative. To determine whether Most of the change in environmental impacts from car sharing
car sharing is net green requires us to estimate the direction and comes from changes in distance traveled by car-sharing users. There-
size of each effect. fore, one of the critical insights from this example is that
Luckily, a team of researchers from the Uni- the service of car sharing cannot be deemed green
versity of California, Berkeley, investigated or not green on its own. Whether car sharing
most of these questions by surveying the is green is not an attribute of the service
changes in travel behavior of more than The growing itself; it depends on who the customers
6,000 car-sharing users before and af- environmental literacy are, what they would do without the
ter joining a car-sharing service.12 The service, and how joining the service
survey results show that the major-
of customers, policymakers, changes their behavior. If car sharing
ity (58 percent) of car-sharing users investors, and the public attracted only previously carless us-
were previously carless and joined will increasingly reward ers, it would increase total environ-
car sharing to gain access to per- mental impacts. If it attracted only
the pursuit of net green and
sonal automobiles. These users thus people who shed cars and drive less,
shifted from more efficient public and increase the reputational risks it would decrease total environmen-
alternative transportation modes to of using unsubstantiated tal impacts.
less efficient cars. They also generally claims of greenness. In the survey results, the travel re-
increased their total travel, though not by ductions and efficiency improvements of
a large amount (typically less than 620 miles the car-shedding users outweighed the travel
per year). As a result, the majority of car-sharing increases and efficiency losses of the formerly car-
users actually increased their environmental impacts less users, making car sharing net green for the user
from transportation, but only slightly. group studied. It is worth pointing out, however, that this net im-
On the other hand, a minority (17 percent) of car-sharing users pact could vary by car-sharing company: A company marketing to
sold, donated, or retired one or more cars after joining car sharing. and attracting primarily previously carless people is unlikely to be
These users made a moderate shift toward public and alternative net green. A company attracting many people who will shed cars and
transportation, and, most important, they reduced the miles they drive less, on the other hand, is much more likely to be net green.
traveled in cars as well as their overall amount of travel. These
mileage reductions were typically much more dramatic than the Net Green Enhances Environmental Communication
increased car use of the previously carless majority. As a result, the Embracing net green will make corporate environmental sustain-
car-shedding minority of car-sharing users created large reductions ability efforts more complex, but also more meaningful, rewarding,
in the environmental impacts of their transportation activities. Be- and defensible. It will also help companies enhance the credibility
cause the travel reduction by car-shedding users was large and the of their environmental communication efforts and avoid the hot
 Stanford Social Innovation Review / Spring 2016 31

water of greenwashing. Any corporate environmental communica- they have economic costs. Net green business activities are those
tion strategy based on selling green products will always be plagued that reduce or avoid other activities that have even larger environ-
by the fact that all products have environmental impacts, and the mental impact, so that overall impact is reduced. It is the difference
greenest option will always be no product at all. between avoided and incurred impacts that is the source of mean-
The apparel company Patagonia understands this argument bet- ingful corporate environmental greening.
ter than most other companies. It freely admits that producing and Companies that are serious about corporate environmental sus-
selling garments is still a substantial source of environmental impact. tainability need to identify and pursue business activities that are
On Black Friday, 2011, Patagonia even took out a full-page ad in The net green. In some instances that may be as simple as displacing a
New York Times showing one of its fleece jackets with the headline, high-impact product with a low-impact one, but frequently it will
“Don’t Buy This Jacket.” Although the underlying reasoning is spot be more complex than that. In these cases companies need to un-
on, the request of the ad is also a great way to put your company derstand not just their products, but all the other aspects that are
out of business. A better approach is to identify net green business affected by their business activities, including those outside their
activities. Patagonia, for example, has just added garment repair to corporate boundaries. For manufacturers of fuel-efficient cars
its business and is about to start selling used products in its stores. and LED lighting, this means understanding how customers make
As many companies can attest, advertising products as green has product purchasing and use decisions and finding ways to reduce
a habit of backfiring. In 2007 the state-run Norwegian Consumer the direct rebound effect. Producers and users of recycled material
Ombudsman determined that carmakers Toyota, Opel, Mitsubishi, need to make sure that their products displace primary materials
Peugeot Citroen, Saab, and Suzuki had all used misleading phrases rather than grow the total market. Refurbished or remanufactured
to advertise the greenness of their products. Norway has since products need to successfully compete with new products, not just
changed its advertising guidelines, and as a result no car can now find additional buyers. Car-sharing companies need to attract us-
be called green, clean, or environmentally friendly.14 We believe ers who use the service to replace owned vehicles and drive less.
that the growing environmental literacy of customers, policymak- By abandoning the well-intentioned but flawed search for green
ers, investors, and the public at large will increasingly reward the products and embracing the pursuit of net green, companies finally
pursuit of net green and at the same time increase the reputational have a roadmap to becoming part of the solution. n
risks of using unsubstantiated claims of greenness.
N ote s

The Road to Meaningful Corporate Greening 1 Ana Campoy, “Hot Job: Calculating Products’ Pollution,” The Wall Street Journal,
September 1, 2009.
Until the global economy reaches a point at which it extracts re-
2 Roland Geyer and Vered Doctori Blass, “The Economics of Cell Phone Reuse and
sources and emits wastes, effluents, and emissions at a pace and Recycling,” International Journal of Advanced Manufacturing Technology, vol. 47,
in a way that lie well within the carrying capacities of our planet, issue 5-8, 2010, pp. 515-525.
meaningful corporate greening means reducing the overall environ- 3 John Atherton, “Declaration by the Metal Industry on Recycling Principles,”
International Journal of Life Cycle Assessment, 12, no. 1, 2007, pp. 59-60.
mental impacts of business activities. This reduction requires a solid
4 Trevor Zink, Roland Geyer, and Richard Startz, “A Market-Based Framework for
understanding, and ideally an actual measurement, of all significant Quantifying Displaced Production from Recycling or Reuse,” Journal of Industrial
environmental implications of a given business activity, be it a new Ecology, published online July 21, 2015.
business model, the launch of a product, a new procurement policy, 5 Steve Sorrell, John Dimitropoulos, and Matt Sommerville, “Empirical Estimates
or an internal cost or waste reduction program. of the Direct Rebound Effect: A Review,” Energy Policy, 37, 2009, pp. 1356-1371.

The popular corporate sustainability strategy of identifying and 6 “Blue LEDs—Filling the World with New Light,” Nobel Foundation, 2014.
7 Energy Savings Potential of Solid-State Lighting in General Illumination Applications
selling green products is ill equipped to guide companies toward
2010 to 2030, Navigant Consulting, 2010. Harry D. Saunders and Jeffrey Y. Tsao,
meaningful environmental action, because it ignores the mecha- “Rebound Effects for Lighting,” Energy Policy, 49, 2010, pp. 477–478.
nisms by which selling a product—or any other business activity 8 Jeffrey Y. Tsao, Harry Saunders, Randy Creighton, et al., “Solid-State Lighting: An En-
for that matter—reduces overall environmental impact. Instead it ergy-Economics Perspective,” Journal of Physics D: Applied Physics, 43, 2010, p. 354001.

naïvely assumes that each green product displaces a product with 9 Roger Fouquet and Peter J. G. Pearson, “Seven Centuries of Energy Services: The
Price and Use of Light in the United Kingdom (1300-2000),” Energy Journal, 27,
higher environmental impacts, and that everything else stays the no. 1, 2006, pp. 139–177. Tsao, Saunders, Creighton, et al., “Solid-State Lighting,” p.
same. This assumption is clearly wrong, and ostensibly green prod- 354001. Roger Fouquet and Peter J. G. Pearson, “The Long Run Demand for Light-
ing: Elasticities and Rebound Effects in Different Phases of Economic Develop-
ucts may actually increase total environmental impact by outcom- ment,” Economics of Energy & Environmental Policy, 1, 2012, pp. 1–24. Andrea L. Hicks
peting even greener options, increasing total market demand, or and Thomas L. Theis, “Residential Energy-Efficient Lighting Adoption Survey,”
increasing product use. Car sharing completely defies the notion Energy Efficiency, 7, 2014, pp. 323–333.

that a green product or service has lower life-cycle impacts than a 10 Jeffrey B. Dahmus, “Can Efficiency Improvements Reduce Resource Consumption?
A Historical Analysis of Ten Activities,” Journal of Industrial Ecology, 18, no. 6, 2014,
benchmark, because there is no meaningful benchmark at all. Rather, pp. 883–897.
car sharing reduces overall environmental impact by changing the 11 “This Idea Is Bigger Than All of Us, Is It for Me?” Zipcar Inc., 2014.
travel behavior of its customers. 12 Elliot W. Martin and Susan Shaheen, “Greenhouse Gas Emission Impacts of Car-
The concept of net green, on the other hand, is applicable to sell- sharing in North America,” IEEE Transactions on Intelligent Transportation Systems,
12, no. 4, 2011, pp. 1074–1086.
ing products, changing business models, developing new business
13 Trevor Zink, Net Green: The Impact of Corporate Social Responsibility on the Natural
segments, and any other business activity, and it focuses managers’ Environment and Employee Satisfaction, 2014, ProQuest UMI #3645720.
attention on the actual source of environmental impact reduction. 14 Alister Doyle, “Norway Says Cars Neither ‘Green’ nor ‘Clean,’” Reuters, September 6,
Virtually all business activities have environmental impacts, just as 2007.