when a company s green marketing activities are not substantiated by significant investments or operational changes it may be criticized for false or misleading advertising this practice is also sometimes referred to as greenwashing and the fines and negative press can be tremendous for example on april 8 2022 the federal trade commission ftc made a public announcement that it was issuing a 5 5 million penalty via its penalty offense authority to kohl s inc 2 5 million and walmart inc 3 million due to their deceptive environmental claims about rayon products this is the largest civil penalty in ftc history 1
there are many incentives for companies that choose to engage in green marketing to begin with a companies perceived commitment to environmental causes is an increasingly important factor influencing many consumers spending habits example of green marketingstarbucks is often cited as a leader in green marketing practices the company has invested heavily in various social and environmental initiatives in recent years for example in a 2018 report starbucks reported that it had committed over 140 million to the development of renewable energy sources 2 the company purchases enough renewable energy to power all of its company operated stores throughout north america and the united kingdom 3similarly the company has made investments in social impact projects through initiatives such as the starbucks college achievement plan through this project many u s based starbucks employees who work more than 20 hours a week on average are eligible to receive fully paid tuition to the online undergraduate degree program offered by arizona state university 4 this project as well as similar commitments in areas related to the employment of veterans have formed an important part of starbucks green marketing initiatives from an investor s point of view these kinds of green marketing initiatives can prove essential in building and maintaining a valuable brand particularly for consumer facing companies such as starbucks however some critics argue that green marketing can exacerbate the existing advantages of larger companies at the expense of their small or mid sized competitors after all implementing robust social or environmental programs often involves additional overhead costs for large companies these costs can easily be borne and may even form part of the company s existing marketing budget for smaller companies however the addition of these costs may significantly impair the profitability or viability of the business 