Most of us can agree on some common cases of greenwash. For example, the label on an environmentally toxic household product that sports pictures of trees and bunnies. Or the claims of a product’s recyclability when, in reality, there’s no infrastructure to recycle it. But we ran into more philosophically challenging examples as well in the course of the 2011 Tomorrow’s Value Rating (TVR) research.

Take the example of Caterpillar. Caterpillar has a machine refurbishing business that reduces materials and energy usage that would otherwise go toward building new machines. They also have a booming business line in alternate fuel generators that can save greenhouse gas emissions for their customers. Clear example of a win-win for business and the environment, right?

Well maybe. Caterpillar would not undertake these activities if the business case were not there. And the corollary is not true: the company does not cease profitable business activities with less compelling eco-credentials (like sales of new machinery and generators that use traditional fossil fuels). So, are we to conclude that Caterpillar is a leader in sustainability…or greenwashing?

Of course, the same question can be applied to many of the companies held up as leaders in sustainability. Do we praise GE for Ecoimagination, or revile them for the manufacture of arms? Do we write thank you notes to Chevron for providing access to energy and growth around the world, or do we protest at their front doors for environmental and community impacts?

During the course of the TVR research, we distilled this question down to the tell-tale characteristics of a company that is committed to sustainable practice rather than repackaging ‘business as usual’ in green wrapping paper. One of the most telling characteristics of the leaders: they don’t ignore the ‘sticky issues’. In fact, they embrace them.

Take the tale of two comparable corporate sustainability reports, those of Gap and Total. They are comparable in this case because they both use stakeholder questions to frame their discussion of sustainability issues. As an example, the first stakeholder question in the Total 2010 Society and Environment Report is: “Total encounters a wide array of economic, social, political and environmental interests, sometimes conflicting, that it has to meet. How does your governance system allow you to rank these interests?” But the question is framed in such a way as to allow Total to determine the context, case studies and response to best fit the message that Total wishes to provide. There is no or little difficult news in the response. Total can answer the question and still avoid the sticky issues. In a US sports metaphor, this is a ‘softball’ question and Total ‘knocks it out of the park’.

In contrast, Gap provides an FAQ section on its website (see www.gapinc.com/content/csr/html/topnavtoolbar/faq.html). The first question is: “What has Gap Inc. done in response to the December 14 2010 fire at an apparel factory in Bangladesh in which 29 workers died?” This is not a softball question. It requires Gap to take a challenging issue head on, answer specifically and discuss the issue in the context required by the stakeholder. It does not allow the company to avoid the tragedy or focus on other, more palatable case studies. Gap is addressing the sticky issues and not re-packaging business as usual under the banner of sustainability.

This is not to suggest that Total is greenwashing. But it does suggest that Gap, and other companies like them, are willing to hold steady in their commitment to sustainability even when the business case is not there and commit to transparency even when the truth is not so pretty.

This article first appeared on The Guardian Sustainable Business website

Results of the Tomorrow's Value Rating 2011