On Environmental Crimes and Greenwashing 2.0

Incidents of greenwashing continue apace, increasingly in the realm of what I call Greenwashing 2.0, i.e., misrepresentations in business dealings relating to commercial cleantech equipment and services as opposed to marketing consumer products.

A Colorado company called Executive Recycling, Inc. (ERI) and some of its officers were recently sentenced to imprisonment and fines for fraud and international environmental crimes (see the DOJ’s Colorado office press release here). ERI was in the business of recycling electronic waste such as cathode ray tubes (CRTs).

According to the press release, ERI falsely represented that the company would dispose of all electronic waste in an environmentally friendly manner, in accordance with EPA, state and local laws and regulations, and would do so in the United States.

Contrary to its representations, the company sold the electronic waste it received to brokers for export overseas to China and other countries. ERI did this on a significant scale, being listed as the exporter of record on over 300 exports between 2005 and 2008, including exports of more than 100,000 CRTs.

U.S. Attorney John Walsh noted both the harm to the environment and the damage to ERI’s customers caused by the fraudulent activity:

The defendants in this case not only caused actual harm to the environment by shipping electronic waste overseas for dumping, they defrauded their customers by falsely claiming to be disposing of that waste in an environmentally safe way.

This Greentech Media story reports that the FBI is investigating a number of fraud complaints against a Missouri solar installer called U.S. Solar.

The central allegations involve abuses of the Missouri Public Service Commission’s solar rebate program, specifically, instances in which the installer allegedly pocketed rebate checks that were supposed to go to customers who had the solar energy systems installed.

In one case, U.S. Solar allegedly installed solar panels on a customer’s roof that an independent installer later assessed to be too shaded for solar energy production. The independent installer said the roof has “a significant amount of shaded panels and a lot of exposed wires” and the system should be reinstalled. The customer did not receive his rebate check.

U.S. Solar’s rebate abuses may have contributed to utility Kansas City Power and Light prematurely reaching the $21 million cap on solar rebates. According to a Solar Energy Industry Association representative quoted in the Greentech Media piece, there should be a full investigation:

We need to determine the extent of U.S. Solar’s bad practices and how much they might have impacted the rebate program.

In my opinion, these cases are properly viewed as a greenwashing because they involve false or misleading statements and/or deceptive activity relating to the environmental benefits of a produce or service.

Most discussions of greenwashing are unduly restricted to cases in which an individual consumer, a class of consumers, or a consumer watchdog such as the FTC challenges a company making false or misleading green claims about its products or services.

To put greenwashing in its proper context I think we should consider a wider range of cases, some of which are not immediately recognizable as instances of greenwashing, including civil cases brought by commercial consumers and criminal cases brought by governmental authorities.

From this broader vantage point, and keeping in mind the definition of greenwashing – making false or misleading claims about purportedly environmentally friendly products, services, or practices – we are able to recognize, observe and understand greenwashing in its proper context.

Eric Lane is a patent attorney at McKenna Long & Aldridge LLP in San Diego and the author of Green Patent Blog. Mr. Lane can be reached at elane@mckennalong.com