Greenwashing, says Adam Werbach, is now on the verge of finally dying off and will be over in few years, for two main reasons:

• Firstly, the death of greenwashing comes with the rise of radical transparency and external community pressure, fueled by the transparency and immediacy of the web: “Transparency is not a choice anymore, either your become transparent or transparency will be done to you,” says Werbach. The GoodGuide (see one of my previous posts here) or one of the several greenwashing indexes (here) are compelling examples that no one can hide or distort information about its products or organization.

• Secondly, greenwashing will disappear because it is simply bad marketing and does not help grow sales. Just because your product will supposedly save the world (because it is green) will not make it popular. Consumers always think: “ok, this product is good for the earth, but what does it do for me?”. There is confusion around eco-labels, and also mounting problems of trust and transparency and consumer fatigue as consumers constantly get exposed to green messages and advertising. For Werbach, only approaches like “this product will help you saving money because it saves energy” or “a product that is easier to use because it has less packaging” can work.

I agree with Werbach’s points, however I also want to highlight that green should not only be seen as a marketing tool. It is also a reputation management tool that help brands and companies get involved on issues that matter to their key stakeholders. A strong value proposition. A higher purpose that people want to engage with, through which they can feel empowered, through which they can make a difference and build a better, greener world. Consumers should not only be seen as ‘wallets’, they are citizens/netizens, they can also be your employees, etc.. . We just need to look at the Obama campaign to understand how leadership and greater purpose helped make a difference.

But then, in order to create trust and enhance reputation / relationships with stakeholders, companies or brands have to go beyond nice green messages, and show their true commitment to green through their corporate values and priorities.

* You can listen to the podcast of this interview via iTunes, or just click here to listen, right-click to download. You can also find part one of TreeHugger’s interview with Adam here, and follow @TreeHugger on Twitter & get their headlines and news with @TH_rss!

This report sucessfully shows how companies are progressing along five developmental stages of CSR, both from the outside in and the inside out.

Not surprisingly, effective stakeholder engagement is key to progress along the different stages. In order to succesfully link CSR with their business strategy, companies must indeed understand what are their stakeholders’ expectations on the ground, and what are the key issues to address. Such approach then enables companies to be proactive (instead of merely reactive) and to change the relationships with some stakeholders from adversaries to partners.

I am even more interested in the fifth stage that they call ‘transformative’: I belive this is when companies are becoming powerful agents of change themselves and when CSR or Sustainability is at the core of their brand or corporate DNA. At this stage companies fully CONNECT and PARTNER with their key audiences (e.g., consumers) to effect positive change. I am also persuaded that this is at this stage that the ROI is the most compelling (i.e. if consumer-oriented initiative, ROI is about brand involvement, brand differentiation, with positive side effects on corporate reputation, etc.).

In China, most of CSR is still at a Compliant stage or Engaged Stage, with a predominance of charity and philanthropic initiatives, which do not offer a very compelling ROI, especially in terms of corporate reputation and stakeholder relationships. What is needed to move foward? Understanding stakeholders expectations and key local issues to strategize locally-relevant and business-aligned initiatives, and this is what makes CSR work in China very interesting and also very challenging.

If you are interested in CSR, I highly recommend you to have a quick read of this report.

:: What is it?

Developed by a “For Benefit” startup and with the contribution of a team of experts (i.e scientists, consumers researchers, technologists from diverse organizations such as the MIT or the University of California), this website rates consumer products based on their health, environmental and social impacts.

More than 70,000 food, household and personal care products and even toys are ranked on the website, from the shower gel you use everyday to the latest toy you were planning to get for your kids at Christmas. At home on your PC or in the stores on your mobile, you can get the information that is most important to you about any kind of product your are planning to buy.

:: Bluring lines between brand reputation and corporate reputation

Very interestingly, I noticed that GoodGuide not only provides product-related information (ingredients, toxicity with carcinogens for instance) but also analyzes data on company’s performance (i.e. climate change policies, labour concerns, etc.).

This demonstrates that brand reputation and corporate reputation are now inextricably linked. How you operate as a company is as important as what you do and what kind of product or service you sell. Product and service quality are still important, but now the definition of what constitutes “quality” also includes social and environmental-related corporate performance.

Therefore GoodGuide is raising issues and challenges not just for marketers, but also has important implications for corporate behavior and corporate communications. I am especially thinking about the risk of greenwashing, for instance if a company is commercializing an eco-friendly product while other products in the same catergory and the company’s operations as a whole are not up to the same standards.

:: Hypertransparency

GoodGuide’s core mission is to provide the world’s largest and most reliable source of information on the health, environmental and social impacts of products and companies. It is another example that brands have lost control. Enabled with the transparency and immediacy of the web, brasnds are dealing with empowered consumers.

And no brand can now ignore this: “Increasingly discerning, well-informed consumer consumers are moving outside the purchasing funnel—changing the way they research and buy your products, resulting from the explosion of product choices and digital channels. Two-thirds of the touch points during the active-evaluation phase of a product or service involve consumer-driven activities such as Internet reviews and word-of-mouth recommendations from friends and family” (McKinsey Quarterly, The Consumer Decision Journey, June 2009)

:: What to do then? Some general principles to protect corporate reputation and enhance brand equity

• Never presume that you can hide or distort information about your company or products – there will always be someone to find it out and expose your potential misconduct to a greater audience. Same goes for greenwashing or ‘fake’ CSR

• Consumers expect transparency from the companies they buy from, so be transparent and be ready to constantly question your practices.

• Be ready to rethink your marketing & communications model. Now marketing is about directly connecting with your consumers through dialogue, openess, relationships, shared experience & engagement.

You can also follow GoodGuide on Twitter

PS: Goodguide.com is a member of bcorporation.net, a consortium of nearly 200 for-profit companies that, according to its Web site, uses “the power of business to solve social and environmental problems.” The B stands for ‘benefit’, a new kind of hybrid between for-profit and nonprofit that we are seeing more and more of today.