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onsumers and manufacturers are becoming more environmentally conscious about packaging.

kill a product. The criticisms are a careful interweaving of facts and emotional appeals. The environmentalist often outmarkets the marketers. For the committed "greenie" the fight is real and little quarter is given or compromise accepted unless to retire to a new base line from which to relaunch an attack for the balance of the objective still remaining. In this environment it is tempting for marketers to assume a high level of importance on the part of the consumer and to make claims for their companies that are too often unsubstantiated, knee-jerk reactions to pressure. This article contends that for long-term profitability and survival any corporate move to produce more environmentally safe products should be part of a corporate's genuine acceptance of the environmental issues. The acceptance requires an associated commitment of resources and not a hastily repainted greening of existing questionably safe products for the sake of opportunism and greed.

Ethical Issues of Environmentally Friendly Packaging

Victor Gray and John Guthrie

Introduction Throughout the world there is rapidly growing interest in both business ethics and in the relationship between businesses and the environment. At the same time marketers are finding themselves in an increasingly competitive world which contains increasingly discerning customers. Customers want products and services that are streamlined, efficient and convenient. This raises dilemmas for the modern marketer. Is it possible to provide packaging that is practical (to fulfil the "protective" role of packaging), attractive (to fulfil the "promotion" role of packaging), competitive with other types of packaging, and environmentally acceptable? The answer technologically is yes. The answer as to profitability is the area which taxes the marketer's mind. The common-sense approach to the environment aside, it is clear that much of the pressure arises from political and environmental groups. There is little quantitative evidence to support an "environmentally safe" classification system for products or packaging, and little work has been done on the part that environmental factors play in the purchase decision of most consumers. The vocal and visible environmental zealots in the community apply pressures and the negative images that for the marketer can at least reduce sales and at worst

Environmental Issues The basic "green" issues that influence customers include whether or not resources are sustainable and whether habitats are being destroyed; whether waste material can be recycled and whether it is biodegradable, and whether a product contains chemicals that are harmful to individuals. As the greens move from the fringe towards the centre of the political sphere[1] vote-conscious politicians are responding to these issues. In the area of packaging, the indications in the US are that many of the large cities will run out of dump space for solid waste within the nextfiveyears[2]. It is claimed that the largest category of solid waste is consumer product containers and packaging. To combat this and to placate a vocal environmental lobby group, governments are imposing an increasing array of legislation[3] designed to force manufacturers to face up to the problem. The public and business community's concerns about the role and impact of packaging is growing[4]. A number of companies in the packaging field have already designed products to address this concern. It is also possible that in some situations packaging is being unfairly singled out as the major contributor to the solid waste problem[5]. Benefits such as public health, product quality, economics, and convenience can be too quickly brushed aside in the name of environmentalism. In the area of advertising, exaggerated environmental claims on product packaging are making shoppers cynical[6]. Claims that are vague, lack specific information, and can in fact be misleading are attracting not just consumer doubt but also the lawmakers' attention.

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Consumer Reaction The public's concern is extending beyond a passive intellectual concern into an active mode. In 1989 a survey carried out in the US by the Gallup Organisation [7] indicated that consumers are deeply concerned about potential environmental damage caused by consumer products and packaging. Consumers were asked to rank their level of concern about environmental damage caused by consumer goods and packaging. On a scale where 1 is "not at all concerned" and 5 is "very concerned" the mean ranking overall was 4.14. Nine out of every ten respondents stated that they would be willing to make a special effort to buy products from companies trying to protect the environment. In a recent national survey carried out by the Wirthlin Group in the US 72 per cent of respondents said environmental improvements should be made regardless of the cost[8]. A 1989 survey carried out by Packaging Magazine[9] indicated that "value for money" and "tamper-evident features" continued to be the most important packaging characteristics to the consumer. The survey also produced evidence that consumers have clearly begun taking into account packaging material recyclability when making purchase decisions. What is unclear is the extra cost the consumer is prepared to carry in order to have recyclable environmentally friendly packaging and its importance compared with convenience and attractiveness. Recycling is a major issue and an integral part of environmentalism. In many cases it is an apparently acceptable option. For example, many plastic processors, equipment manufacturers, and environmental agencies and activists believe that plastics recycling in the US is adopting a more responsible attitude[10]. The Society of the Plastics Industry Inc. has dropped opposition to mandatory recycling measures and is pushing for a container code to be imprinted on all plastic containers to facilitate recycling. While some suppliers of packages and packaging materials have taken action towards a well-defined recycling policy, others have no developed waste-management policy.

On the other hand, although the "bad boy" of packaging (and in many cases a justified tag), through new technology plastic is moving into an ever wider range of products. As the debate over how to control plastic wastes becomes an important political and legislative issue, opportunities arise for chemical companies to profit from it[13]. However, the lack of a standard test for biodegradability remains a problem area. Manufacturers of plastic packaging are increasingly aware of the importance of changing their negative image [14]. Ensuring that opinion leaders hear a balanced argument about plastics will require a well-co-ordinated, consistent and sustained campaign. There are two elements to such a campaign. On the one hand, manufacturers must have an honest commitment to environmentally friendly plastic products. On the other, they must emphasise their benefits such as product quality, reduced waste and packaging safety, to address the charges of environmentalists. In many countries these things are happening; for example, in New Zealand manufacturers are funding the formation of a Plastics Environmental Advisory Council[8]. The negative image of plastics is in turn creating opportunities for the paper industry, which is considered by many to offer a more environmentally friendly product at the disposable end of the cycle, but one that suffers criticism at the production end. The two industries that dominate consumer discussion on environmental issues are food and cosmetics. For food the main issue for the general consumer is the packaging, with a growing interest in the origin of the food. In the cosmetics industry concern is centred more on the product itself. Issues such as the effect on the ozone layer and the effects of the product on health play a greater role than packaging. Today's supermarket retailers view themselves as the "purchasing agent" for the consumer[15]. The volume of goods available to retail outlets such as supermarkets means that the large chains are able to dictate terms to the manufacturers. This is not just from the promotional packaging but also from the environmental point of view. Wal-Mart Stores have made a strategic move to environmentally safer products, a move that could have major repercussions for consumer product marketers and competing retailers [16]. According to Morris Saffer, chairman of Saffer Advertising, in the very near future, environmental positionings by marketers will be an absolute part of the consumers' everyday decision-making process. Retailers are finding that as environmental awareness spreads they are having to find ways of converting the trend into a greener bottom line. However, they remain divided over whether it is

The Industry The trends in consumer packaging are difficult to distinguish owing to the wide variety of reasons that underlie them. However, one clear shift is away from glass packaging, which is heavy and can pose a safety hazard, towards plastics, which offer a variety of design capabilities[ll]. However, observers such as John Daniels, Marketing Director of United Glass, believe that the trend towards plastics has slowed and that in 1992 glass might well be the preferred packaging material[12].

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better to offer consumers "green" products, such as photodegradable plastic bags, or whether to concentrate on community recycling and consumer education programmes[17]. The Loblaw chain of supermarkets is developing various "green" marketing programmes in response to increased customer concern about the environment[18]. In the cases of both Wal-Mart and Loblaw the retailer is putting the pressure on the manufacturer.

depend on how much consumers are willing to pay for such packaging and how long it will take the marketer to educate the consumers. Most companies now realise that they no longer have a choice when it comes to making environmentally friendly packaging but at the same time do not want to spend much money because they do not know whether consumers would support a price hike[22]. To date, major companies are cautious about advertising the green aspects of their products because manufacturers must first agree on what makes a product green and must assure companies that green qualities sell products. A major problem with environmental marketing, therefore, is that there are no standards as yet for evaluating environmental claims, so the opportunities for abuse are legion. The packaging industry is now at a point where there has been a realisation of the potential magnitude of environmental issues, combined with an acknowledgement of the promotional power of packaging and its demand for more and more creativity. The packaging and advertising must advance cautiously on all fronts in order to retain credibility. Turbulence and Dilemmas How and when should business respond? The current business scene relative to environmental issues has a high degree of uncertainty about it. The consumers are exposed to mixed and sometimes conflicting signals from the various environmental factions. The groups have in the past proselytised single agendas and only in the last two years have they combined on some of the larger issues to bring a consistency to their message. The technologists are divided as to the most effective means of addressing the many issues, the divisions being partly due to scientific differences, but also to proprietary rights and owned processes. The manufacturers have yet to receive definitive proof of the commercial benefit and are as yet loath to make major investments and commitment in technology and revamped marketing strategies, rather favouring a tentative "toe in the water" approach unless forced by new legislation and catastrophic bad publicity. The uncertainty is forcing manufacturers and packaging suppliers to re-evaluate their corporate motives and responsibilities to the market. The evaluations are calling in for examination the long held and often dust-covered understanding of the companies'rightsand responsibilities. As the companies consider the challenge of environmentalism they must first take time to review their position in the context of the wider strategic issues before action can be taken on the specifics associated with tactical operational aspects. However, too often the executive team is not aware of the ethical issues involved and blunders on, getting lost in the detail and ignorance of the wider

The Role of Packaging Packaging is a high profile target for the environmental "wave". However, its role as a promotional tool remains of prime importance to the marketer. Packaging can enhance the consumer's perception of the product, the brand and the company[19]. The package is a major element of the whole marketing strategy, serving not only as a container, but also as a way to communicate with the customers. Current trends in packaging include emphasis on convenience, such as single servings or microwave use, and technological improvements, such as aseptic packaging. Packaging is the single most important factor in purchasing decisions made at the point of sale. Unwilling to linger in stores because of lack of time, consumers are giving marketers only seconds to tell their story at the retail level. Vulnerable to impulse decisions, the consumer is also confronted by a barrage of different brands. Packaging both helps a product stand out from the competition, and helps in the competition for retail shelf space [20]. The importance of good, attention-getting, and persuasive packaging to marketing is clearly evident when we consider that impulse buying amounts to 80 per cent of all retail purchases, and 90 per cent of all women read food package labelling before purchasing[21]. A growing segment is willing to pay a premium for packages that help save time and effort. A largely untapped opportunity exists for marketers who package products to satisfy consumer concerns. Any company which desires to respond must take the time to understand the consumer on these issues. Market research of the psychological underpinning is essential. To anticipate needs, the future agenda of the greens is a necessary input.

What Now? The research literature, trade and popular press, send an unmistakable signal to business. The "green wave" is coming. "Suddenly, business professionalists and environmentalists are talking a similar language; green business is here and it is going to be big"[8|. Consumers and manufacturers are starting to accept with resignation the need to use environmentally sound packaging. However, how quickly it becomes a reality will

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perspective[23]. Multiple interests, values and stakeholders are in conflict with a set of laws addressing an area which in most cases is embryonic, uncertain and untested. Such a set of conditions is bound to raise complex ethical issues. The Janus problem of two separate and possibly conflicting simultaneous perspectives can make the task of finding mutually acceptable solutions impossible unless both perspectives can be merged and considered against a common and consistent set of criteria. Either the unresolvability will continue or one view will have to take preference over the other. In the business of packaging the dilemma is, should a company pursue profit regardless, or pursue an environmentally responsible track at the cost of profit? If the latter, how much profit, how much responsibility, and can you actually predetermine the impact on profit? The latter alternative could easily have the hollow ring of compromise and hence satisfy neither. What set of criteria, then, can provide satisfaction for both views where there is a genuine win-win and not a sort of win-not-lose result? The company involved in supplying packaging material has a further dilemma. As a supplier and usually the producer, not the specifier of the product, it is faced with the issue of who should set the standard. It could, of course, take an environmentally responsible position and risk alienating its non-socially responsible clients or seek to attract those companies for which environmentally safe packaging is part of their market offering. The question that must be addressed and understood is, where does the responsibility lie in the hands of the specifier or supplier? This question is somewhat simplistic, but it does illustrate the wider issues that must be addressed before action can be taken. Thus standards must touch everything and everyone if they are to be effective. A number of companies create an artificial credo of ethics, bordering on chicanery, that appears to satisfy the egos of board members or senior executives. They are artificial because they are statements that exist only on paper and are not incorporated into the philosophy, planning, action, monitoring, control and reward functions of the company. The company that makes isolated tactical changes for reasons of expediency is failing to address the inherent conflicts of the wider situation. The trends and information available lead us to deduce that an opportunistic approach will not be successful in addressing the conflict. Rather, an integrated effort of physical resources, technology and genuine human resolve must be combined. Ethical Issues Arise The complex ethical issues that arise are entwined throughout and connect the many facets of packaging and environmentalism discussed earlier in the paper. The issues are complex, but can be broken down into issues

that are easier to handle. In turbulent situations where ethical issues are involved, Parry[24] categorises them into two types. First discussed were problems where the ethics concerned the institution (the company itself). These issues address the questions arising among the group "to balance its interests against the interest of the other groups. When the balance is upset, or when the interests pull too hard against each other, the ethical system is damaged." An example of this could be the need for shareholders to forgo earnings in order to acquire new technologies to remove toxins from printing ink solvents. These institutional ethics "concern the responses of the component groups of a corporation to the constant changes of economic life". The second type of problem involves the ethics of action. "These involve the performance of a business and its transformation of the world it inhabits.'' To be successful, these ethics imply a mutual obligation by those involved in the action; the business and the consumer. The business should not permanently damage the environment, it must provide a good or service of use and value, it must not be harmful, and must be priced competitively. The consumer must be willing to pay a fair market price and not abuse the product. The above arrangement is too often disturbed either by business greed or by business responding inappropriately to perceived excessive competitor pressure. The result of both is mistrust and lingering doubt. A recently launched group of household cleaners was supported by a heavy media spend. The result was a high trial take-up followed by public criticism by the greens of the validity of environmental claims in the advertising. The utilisation of Parry's categories will lead inevitably to the development of a number of ethical understandings and/or statements with the company. To organise these often wide-ranging ideals and standards, a codification and adoption in an organised form are essential if they are to be communicated and implemented. The time, effort and commitment required to implement a formal ethical code within a company are significant and extremely difficult to analyse, and hence to justify, using traditional, objective, cost benefit techniques. In the decision process there is an element of social responsibility of which, although the costs can be determined objectively, the benefits can be determined only by at best marginal objectivity measures and more realistically by subjective calls. The current and increasing trend of moral investments where the investor sacrifices a quantum of traditional financial gain such as high yield, capital appreciation, tax incentives, etc., for the satisfaction of knowing the company is more environmentally responsible and the investors' money will not be used in a way deemed socially irresponsible, is one quantifiable measure of benefit. However, the amount of morally placed investment is as yet too small to act as

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a general appeal to companies, for the available funds would soon be swallowed up.

An Ethical Code
Frederick[25] proposed four critical phases for effective implementation of an ethical code of conduct: Acknowledge that ethics belongs at the core, and not just the periphery, of management decisions and policies Employ and train managers who accept and practise the central role of ethics in their everyday work Possess sophisticated analytical tools for detecting, possibly anticipating, and coping realistically with ethical problems affecting the company and its employees Attempt to align its current and planned future policies with the core values to be found within the culture of ethics.

Awareness of the "company standards of proper conduct relative to the industry" issues Identification of key issues in each executive's area Identification of the types of pressures that will be experienced Deliberate avoidance of likely incidences and reporting of any incidence or potential incidence Publicised consequences of non-adherence to stated standards Non-threatening mechanisms for handling enquiries and questions on ethical dilemmas An enforcement and reward mechanism.

Once these have been adopted, implemented, measured and rewarded, the organisation will have resolved the major pressure on executives that causes ethical compromise is profit taking our first or final consideration and obligation? When addressed and understood, the executive group will not be torn by the conflict of the gap between what it says and what it does. This does not mean full disclosure but it does mean truthfulness. For example, the conditions specified for a tender should be honoured rather than that the lowest bid should be met in a sidedeal. If all tenderers met the lowest bid, there would be no bid. The tenderer who bid first is disadvantaged in such a deal. An ethical standard would not rule out a negotiated bid system, but it would require the company conducting the bids to quote real figures and not artificially low figures, to drive the negotiated competitive bid down. A bidder should be able to rest assured the bid is confidential. An ethical standard would seek to engender a trust between the specifier and supplier of packaging. Expressed intentions would be true intentions. There would be an honest intention of fulfilling the contract or accepting the bid[26]. Without clear signals and guidelines to the company's ethical standards and real commitment to environmentalism, the pressures for performance, on middle level executives, are in many cases excessively high. The company without such a formal code will have in-built disharmony and imbalance between human risk and effort, stakeholder desires and consumer rights, expectation and satisfaction. The formal code suggested by Edwards [27] addresses what we believe are the keys to successful application of ethical standards in a company, once Frederick's phases have been accepted as the overall blueprint: Training of personnel to understand and accept the company's values Awareness of the issues relative to industry

From the messages sent by the market we conclude that the issue was not one of if environmentally safer packaging would increase, but rather one of when and how much of a premium consumers will pay for it. Whilst we agree with the responsiveness of business to adjust to follow the dollar, we believe business must first resolve the inherent conflicts between its interest, rights and obligations. Having done so, it can sincerely develop and implement codes of conduct which respect the demands of environmentalism in a manner acceptable to the short-term demands of stakeholders.

References

1. Tully, S., "What the 'Greens' mean for Business", Fortune, Vol. 120 No. 9, 23 October 1989, pp. 159-64. 2. Stuller, J., "The Politics of Packaging'', Across the Board, Vol. 22 No. 1,2, January/February 1990, pp. 40-8. 3. Anon., "Legal Aspects of Packaging", Packaging, Vol. 33 No. 5, 1988, pp. 221-7. 4. Erickson, G., "Earth Day 1990: A Chance to Take Action", Packaging, Vol. 35 No. 5, April 1990, pp. 8-10. 5. Ashton, R., Erickson, G. and Larson, M., "Packaging and the Solid Waste Problem", Packaging, Vol. 34 No. 11, August 1989, pp. 32-86. 6. Anon., "Marketing Greenery: Friendly to Whom?", The Economist, Vol. 315 No. 7649, 7 April 1990, p. 83. 7. Hume, S. and Strand, P., "Consumers Go 'Green'", Advertising Age, Vol. 60 No. 41, 25 September 1989, pp: 3, 92. 8. Adams, C, "Turn Green and Grow", NZ Business, August 1990, pp. 12-19. 9. Erickson, G., "Consumer Opinion Points to Packaging Profits", Packaging, Vol. 34 No. 8, June 1989, pp. 44-53. 10. Basta, N., "Plastics Recycling Grows Up", Chemical Engineering, Vol. 94 No. 17, 23 November 1987, pp. 22-7. 11. Morris, G. and Tantillo, L., "Cosmetics: Putting a Good Face on the Package: Do Good Looks Equal Good Health?", Chemical Week, Vol. 145 No. 20, 25 November 1989, pp. 42-8. 12. Kreitzman, L., "Marketing through Packaging: Styled for Europe", Marketing, 13 April 1989, pp. 47-9.

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13. Rotman, D., "Degradable Plastics Are Here to Stay", Chemical Week, Vol. 143 No. 17, 26 October 1988, pp. 3843. 14. Toensmeier, P., "Smothering in Plastics: Industry Faces a Crisis Perception", Modern Plastics, Vol. 67 No. 4, April 1990, pp. 42-4. 15. Larson, M . , ' 'Which Packages Will Score in Tomorrow's Supermarkets?", Packaging, Vol. 34 No. 10, July 1989, pp. 8-10. 16. Fisher, C. and Graham, J., "Wal-Mart Throws 'Green' Gauntlet", Advertising Age, Vol. 60 No. 36, 21 August 1989, pp. 1, 66. 17. Freeman, L., "The 'Greening' of America II", Advertising Age, Vol. 60 No. 49, 13 November 1989, p. S14. 18. Duff, M., "Springtime in Marketing: Will Supermarkets Find Gold in the "Green Issue?"; Loblaws, Wal-Mart and Others are Betting They Can'', Supermarket Business, Vol. 45 No. 4, April 1990, pp. 15-25, 45. 19. Masten, D., "Packaging's Proper Role is to Sell the Product", Marketing News, Vol. 22 No. 2, 18 January 1988, p. 16. 20. Rosenfeld, J., "Packaging Wraps Up Sales", Marketing Communications, Vol. 12 No. 9, September 1987, pp. 43-8.

21. Cook, T., "Six Points Tell You How Good Your Packaging Is", Marketing News, Vol. 21 No. 26, 18 December 1987, pp. 7, 12. 22. Miller, C., "Use of Environment-Friendly Packaging May Take A While", Marketing News, Vol. 24 No. 6, 19 March 1990, p. 18. 23. Litzinger, W.D. and Schaefer, T.E., "Business Ethics Bogeyman: The Perpetual Paradox", Business Horizons, March-April 1987, pp. 16-21. 24. Parry, C.W., "My Company Right or Wrong'', Carlow College Ethics Seminar, Pittsburgh, Pennsylvania, 16 May 1985. 25. Frederick, W.C., "Towards CSR3: Why Ethical Analysis is Indispensable and Unavoidable in Corporate Affairs", Californian Management Review, Vol. 28 No. 2, Winter 1986, pp. 126-41. 26. Baylis, M.D., "Ethical Issues in Purchasing Management", Business Quarterly, No. 48, August 1985, pp. 42-7. 27. Edwards, G.E. and Bennett, K., "Ethics and HR: Standards in Practice", Personnel Administrator, December 1987, pp. 62-3.

Victor Gray is a Senior Lecturer and John Guthrie a Lecturer in the Marketing Department, the University of Otago, Dunedin, New Zealand.