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Green marketing
According to the American Marketing Association,green marketing is the marketing of products that are
presumed to be environmentally safe.Thus green marketing incorporates a broad range of activities,
including product modification, changes to the production process, packaging changes, as well as
modifying advertising. Yet defining green marketing is not a simple task where several meanings intersect
and contradict each other; an example of this will be the existence of varying social, environmental and
retail definitions attached to this term.[1]
Other similar terms used are Environmental
Marketing and Ecological Marketing.
Green, environmental and eco-marketing are part of the new marketing approaches which do not just
refocus, adjust or enhance existing marketing thinking and practice, but seek to challenge those
approaches and provide a substantially different perspective. In more detail green, environmental andeco-marketing belong to the group of approaches which seek to address the lack of fit between marketing
as it is currently practiced and the ecological and social realities of the wider marketing environment.[2]
The legal implications of marketing claims call for caution. Misleading or overstated claims can lead to
regulatory or civil challenges. In the USA, theFederal Trade Commissionprovides some guidance on
environmental marketing claims.[3]
This Commission is expected to do an overall review of this guidance,
and the legal standards it contains, in 2011.[4]
Contents
[hide]
1 History
2 Framework
o 2.1 Ecological Marketing
o 2.2 Green/ environmental marketing
3 Greenhouse gas reduction market
4 Popularity and effectiveness
o 4.1 Ongoing debate
o 4.2 Confusion
4.2.1 Greenwashing
o 4.3 Statistics
5 Target market
o 5.1 LOHAS
http://en.wikipedia.org/wiki/American_Marketing_Associationhttp://en.wikipedia.org/wiki/Green_marketing#cite_note-GR-0http://en.wikipedia.org/wiki/Green_marketing#cite_note-GR-0http://en.wikipedia.org/wiki/Green_marketing#cite_note-GR-0http://en.wikipedia.org/wiki/Green_marketing#cite_note-Belz_Peattie_2009-1http://en.wikipedia.org/wiki/Green_marketing#cite_note-Belz_Peattie_2009-1http://en.wikipedia.org/wiki/Green_marketing#cite_note-Belz_Peattie_2009-1http://en.wikipedia.org/wiki/Federal_Trade_Commissionhttp://en.wikipedia.org/wiki/Federal_Trade_Commissionhttp://en.wikipedia.org/wiki/Federal_Trade_Commissionhttp://en.wikipedia.org/wiki/Green_marketing#cite_note-2http://en.wikipedia.org/wiki/Green_marketing#cite_note-2http://en.wikipedia.org/wiki/Green_marketing#cite_note-2http://en.wikipedia.org/wiki/Green_marketing#cite_note-3http://en.wikipedia.org/wiki/Green_marketing#cite_note-3http://en.wikipedia.org/wiki/Green_marketing#cite_note-3http://en.wikipedia.org/wiki/Green_marketinghttp://en.wikipedia.org/wiki/Green_marketinghttp://en.wikipedia.org/wiki/Green_marketinghttp://en.wikipedia.org/wiki/Green_marketing#Historyhttp://en.wikipedia.org/wiki/Green_marketing#Historyhttp://en.wikipedia.org/wiki/Green_marketing#Frameworkhttp://en.wikipedia.org/wiki/Green_marketing#Frameworkhttp://en.wikipedia.org/wiki/Green_marketing#Ecological_Marketinghttp://en.wikipedia.org/wiki/Green_marketing#Ecological_Marketinghttp://en.wikipedia.org/wiki/Green_marketing#Green.2F_environmental_marketinghttp://en.wikipedia.org/wiki/Green_marketing#Green.2F_environmental_marketinghttp://en.wikipedia.org/wiki/Green_marketing#Greenhouse_gas_reduction_markethttp://en.wikipedia.org/wiki/Green_marketing#Greenhouse_gas_reduction_markethttp://en.wikipedia.org/wiki/Green_marketing#Popularity_and_effectivenesshttp://en.wikipedia.org/wiki/Green_marketing#Popularity_and_effectivenesshttp://en.wikipedia.org/wiki/Green_marketing#Ongoing_debatehttp://en.wikipedia.org/wiki/Green_marketing#Ongoing_debatehttp://en.wikipedia.org/wiki/Green_marketing#Confusionhttp://en.wikipedia.org/wiki/Green_marketing#Confusionhttp://en.wikipedia.org/wiki/Green_marketing#Greenwashinghttp://en.wikipedia.org/wiki/Green_marketing#Greenwashinghttp://en.wikipedia.org/wiki/Green_marketing#Statisticshttp://en.wikipedia.org/wiki/Green_marketing#Statisticshttp://en.wikipedia.org/wiki/Green_marketing#Target_markethttp://en.wikipedia.org/wiki/Green_marketing#Target_markethttp://en.wikipedia.org/wiki/Green_marketing#LOHAShttp://en.wikipedia.org/wiki/Green_marketing#LOHAShttp://en.wikipedia.org/wiki/Green_marketing#LOHAShttp://en.wikipedia.org/wiki/Green_marketing#Target_markethttp://en.wikipedia.org/wiki/Green_marketing#Statisticshttp://en.wikipedia.org/wiki/Green_marketing#Greenwashinghttp://en.wikipedia.org/wiki/Green_marketing#Confusionhttp://en.wikipedia.org/wiki/Green_marketing#Ongoing_debatehttp://en.wikipedia.org/wiki/Green_marketing#Popularity_and_effectivenesshttp://en.wikipedia.org/wiki/Green_marketing#Greenhouse_gas_reduction_markethttp://en.wikipedia.org/wiki/Green_marketing#Green.2F_environmental_marketinghttp://en.wikipedia.org/wiki/Green_marketing#Ecological_Marketinghttp://en.wikipedia.org/wiki/Green_marketing#Frameworkhttp://en.wikipedia.org/wiki/Green_marketing#Historyhttp://en.wikipedia.org/wiki/Green_marketinghttp://en.wikipedia.org/wiki/Green_marketing#cite_note-3http://en.wikipedia.org/wiki/Green_marketing#cite_note-2http://en.wikipedia.org/wiki/Federal_Trade_Commissionhttp://en.wikipedia.org/wiki/Green_marketing#cite_note-Belz_Peattie_2009-1http://en.wikipedia.org/wiki/Green_marketing#cite_note-GR-0http://en.wikipedia.org/wiki/American_Marketing_Association8/4/2019 Marketing Types
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6 The Green Marketing Mix
7 Eco Labels
8 Life Cycle Assessment
o
8.1 Example for LCA9 Green marketing cases
o 9.1 Phillips's "Marathon" CFL lightbulb
o 9.2 Car sharing services
o 9.3 Electronics sector
o 9.4 Products & Services
o 9.5 Introduction of CNG in Delhi
10 See also
11 References
12 External links
[edit]History
The term Green Marketing came into prominence in the late 1980s and early 1990s.[5]
The American
Marketing Association (AMA) held the first workshop on "Ecological Marketing" in 1975.[6]
The
proceedings of this workshop resulted in one of the first books on green marketing entitled "Ecological
Marketing".[7]
The Corporate Social Responsibility (CSR) Reports started with the ice cream seller Ben & Jerry's where
the financial report was supplemented by a greater view on the company's environmental impact. In 1987
a document prepared by the World Commission on Environment and Development definedsustainable
developmentas meeting the needs of the present without compromising the ability of future generations
to meet their own need, this became known as the Brundtland Report and was another step towards
widespread thinking on sustainability in everyday activity. Two tangible milestones for wave 1 of green
marketing came in the form of published books, both of which were called Green Marketing. They were
by Ken Peattie (1992) in the United Kingdom and byJacquelyn Ottman(1993) in the United States of
America.[8]
According toJacquelyn Ottman, (author of "The New Rules of Green Marketing: Strategies, Tools, and
Inspiration for Sustainable Branding" (Greenleaf Publishing[9]
andBerrett-Koehler Publishers, February
2011)) from an organizational standpoint, environmental considerations should be integrated into all
aspects ofmarketing new product development and communications and all points in
between.[10]
Theholisticnature of green also suggests that besides suppliers and retailers new
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hon.22_CFL_lightbulbhttp://en.wikipedia.org/wiki/Green_marketing#Green_marketing_caseshttp://en.wikipedia.org/wiki/Green_marketing#Example_for_LCAhttp://en.wikipedia.org/wiki/Green_marketing#Life_Cycle_Assessmenthttp://en.wikipedia.org/wiki/Green_marketing#Eco_Labelshttp://en.wikipedia.org/wiki/Green_marketing#The_Green_Marketing_Mix8/4/2019 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stakeholders be enlisted, including educators, members of the community, regulators, and
NGOs.Environmental issuesshould be balanced with primary customer needs.[citation needed]
Thepastdecadehas shown that harnessingconsumerpower to effect positive environmental change is
far easier said than done. The so-called "green consumer" movements in the U.S. and other countries
have struggled to reach critical mass and to remain in the forefront of shoppers' minds.[11]
While public
opinion polls taken since the late 1980s have shown consistently that a significant percentage of
consumers in the U.S. and elsewhere profess a strong willingness to favor environmentally conscious
products and companies, consumers' efforts to do so in real life have remained sketchy at best.[1]
One of
green marketing's challenges is the lack of standards or public consensus about what constitutes "green,"
according toJoel Makower, a writer on green marketing.[citation needed]
In essence, there is no definition of
"how good is good enough" when it comes to a product or company making green marketing claims. This
lack of consensusby consumers, marketers, activists, regulators, and influential peoplehas slowed
the growth of green products, says Makower, because companies are often reluctant to promote their
green attributes, and consumers are often skeptical about claims.[citation needed]
Despite these challenges, green marketing has continued to gain adherents, particularly in light of
growing global concern about climate change. This concern has led more companies to advertise their
commitment to reduce their climate impacts, and the effect this is having on their products and
services.[12][13]
[edit]Framework
[edit]Ecological Marketing
Ecological marketing was based on the idea that environmental protection and resource conservation can
be better advanced through less regulation by the public sector and more enterprise in the private sector.
This idea, in turn, is based on the premise that the ecologically concerned consumer is a legitimate but
largely unused market segment one that is identifiable, accessible and measurable.[14]
In the 1970s the
importances of a small number of environmental issues like oil use or pollution for a narrow range of
industries (for example cars and chemicals) was framed as something that was relevant to engineers,
lawyers and marketers within companies.[2]
Originally proposed at the American Marketing Association first conference on ecological marketing in
1975,[15]
the idea was compatible with the antiregulatory mood of these days in the U.S. It found supporter
at the 1979 conference, who felt that government and business should strike a better balance in the
division of responsibility for the management of negative social externalities.[16]
[edit]Green/ environmental marketing
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Unfortunately, a majority of people believe that ecological (green) marketing refers solely to the promotion
or advertising of products with environmental characteristics. Terms like Phosphate Free, Recyclable,
Refillable, Ozone Friendly, and Environmentally Friendly are some of the things consumers most often
associate with green marketing. While these terms are green marketing claims, in general green
marketing is a much broader concept, one that can be applied to consumer goods, industrial goods and
even services. Thus, green marketing incorporates a broad range of activities, including product
modification, changes of the production process, packaging changes, as well as modifying advertising.
Green marketing came into prominence in the late 1980s and early 1990s, it was first discussed much
earlier. The American Marketing Association (short: AMA) held the first workshop on Ecological
Marketing in 1975.[15]
The proceedings of this workshop resulted in one of the first books on green
marketing entitled Ecological Marketing. According to Dainora Grundey and Rodica Milena Zaharia
Green or Environmental Marketing consists of all activities designed to generate and facilitate any
exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs andwants occurs, with minimal harmful impact on the natural environment .
[17]
[edit]Greenhouse gas reduction market
The emerging greenhouse gas reduction market can potentially catalyze projects with important local
environmental, economic, and quality-of-life benefits. TheKyoto Protocols Clean Development
Mechanism (CDM), for example, enables trading between industrial and developing nations, providing a
framework that can result in capital flows to environmentally beneficial development activities. Although
the United States is not participating in the Kyoto Protocol, several US programs enable similar
transactions on a voluntary and regulatory basis.[1]
While international trade ingreenhousegas[18]
reductions holds substantial promise as a source of new
funding forsustainable development, this market can be largely inaccessible to many smaller-scale
projects, remote communities, and least developed localities. To facilitate participation and broaden the
benefits, several barriers must be overcome, including: a lack of market awareness among stakeholders
and prospective participants; specialized, somewhat complicated participation rules; and the need for
simplified participation mechanisms for small projects, without which transaction costs can overwhelm the
financial benefits of participation. If the barriers are adequately addressed, greenhouse gastradingcan
play an important role supporting activities that benefitpeoples lives and the environment.[1]
[edit]Popularity and effectiveness
[edit]Ongoing debate
The popularity of such marketing approach and its effectiveness is hotly debated. Supporters claim that
environmental appeals are actually growing in numbertheEnergy Starlabel, for example, now appears
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on 11,000 different companies'[19]
models in 38 product categories, fromwashing machinesandlight
bulbstoskyscrapersand homes. However, despite the growth in the number of green products, green
marketing is on the decline as the primary sales pitch for products. (NEEDS CITATION) On the other
hand,RopersGreen Gaugeshows that a high percentage of consumers (42%)[20]
feel that environmental
products dont work as well as conventional ones. This is an unfortunate legacy from the 1970s when
shower heads sputtered and natural detergents left clothes dingy. Given the choice, all but the greenest
of customers will reach for synthetic detergents over the premium-priced, proverbial "Happy Planet" any
day, includingEarth Day. New reports, however show a growing trend towards green products.[21]
[edit]Confusion
One challenge green marketers -- old and new -- are likely to face asgreen productsand messages
become more common is confusion in the marketplace. "Consumers do not really understand a lot about
these issues, and there's a lot of confusion out there," saysJacquelyn Ottman(founder of J. Ottman
Consulting and author of "Green Marketing: Opportunity for Innovation.")[21]Marketers sometimes take
advantage of this confusion, and purposely make false or exaggerated "green" claims. Critics refer to this
practice as "green washing".[citation needed]
[edit]Greenwashing
The term greenwashing refers to all industries that adopt outwardly green acts with an underlying
purpose to increase profits. The primary objective of greenwashing is to provide consumers with the
feeling that the organization is taking the necessary steps to responsibly manage its ecological footprint.
In reality, the company may be doing very little that is environmentally beneficial[22]
The term
greenwashing was first used by environmentalist Jay Westerveld when objecting to hotelier's practice of
placing notices in hotel rooms which asked their quests to reuse towels to save the environment.
Westerveld noted that there was little else to suggest that the hoteliers were interested in reducing their
environmental impacts, and that their interest in washing fewer towels seemed to be motivated by a
concern to save costs rather than the environment. Since then greenwashing has become a central
feature of debates about marketing communications and sustainability, with awards for greenwashing
established and numerous campaigns, law and advices developed in an attempt to reduce or curb it.[2]
[edit]Statistics
According to market researcherMintel, about 12% of the U.S. population can be identified as True
Greens, consumers who seek out and regularly buy so-called green products. Another 68%[21][23]
can be
classified as Light Greens, consumers who buy green sometimes. "What chiefmarketing officersare
always looking for is touch points with consumers, and this is just a big, big, big touch point that's not
being served," saysMintelResearch Director David Lockwood. "All the corporate executives that we talk
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to are extremely convinced that being able to make some sort of strong case about the environment is
going to work down to their bottom line."[21]
[edit]Target market
In 1989, 67 percent of Americans stated that they were willing to pay 5-10 percent more for ecologically
compatible products.[24]
By 1991, environmentally conscious individuals were willing to pay between 15-
20 percent more for green products.[25]
By 1993, Myburgh-Louw and OShaughnessy[26]
conducted a mail
survey of female consumers in the UK to investigate their perceptions of environmental claims on the
packaging of clothes detergents. They found that 79 percent of their sample agreed to pay up to 40
percent more for a product which was identical in every respect to their own brand and which had been
proven to be green. An important challenge facing marketers is to identify which consumers are willing to
pay more for environmentally friendly products. It is apparent that an enhanced knowledge of the profile
of this segment of consumers would be extremely useful. Efforts to identify environmentally friendly
consumers can be traced back to the early 1970s.,[27]
as well as Anderson and Cunningham,[28]
were
pioneers in studying the profile of socially responsible consumers. Overall, their combined results portray
a highly socially conscious person as female, pre-middle aged, with a high level of education (finished
high school) and above average socioeconomic status.[29]
[edit]LOHAS
LOHAS stands for Lifestyles of Health and Sustainability, and describes an integrated, rapidly growing
market for goods and services that appeal to consumers whose sense of environmental and social
responsibility influences their purchase decisions. The Natural Marketing Institutes (short: NMI) estimates
the US LOHAS consumer market of products and services to be USD 209 billion sold across all
consumer segments.[30]
The five LOHAS segments as defined by NMI include:
LOHAS: Active environmental stewards dedicated to personal and planetary health. These are the
heaviest purchasers of green and socially responsible products and the early adapters who influence
others heavily.
Naturalites: Motivated primarily by personal health considerations. They tend to purchase more
LOHAS consumable products vs. durable items.
Drifters: While their intentions may be good, DRIFTERS follow trends when it is easy and affordable.
They are currently quite engaged in green purchasing behaviours.
Conventionals: Pragmatists who embrace LOHAS behaviour when they believe they can make a
difference, but are primarily focused on being very careful with their resources and doing the right
thing because it will save them money.
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Unconcerned: Either unaware or unconcerned about the environment and societal issues mainly
because they do not have the time or the means these consumers are largely focused on getting
by.
The distribution of the different types of LOHAS.[30]
[edit]The Green Marketing Mix
A model of a green marketing-mix should, of course, contain all 4Ps:
Product: A producer should offer ecological products which not only must not contaminate the
environment but should protect it and even liquidate existing environmental damages.
Price: Prices for such products may be a little higher than conventional alternatives. But target
groups like for example LOHAS are willing to pay extra for green products.
Place: A distribution logistics is of crucial importance; main focus is on ecological packaging.
Marketing local and seasonal products e.g. vegetables from regional farms is more easy to be market
green than products imported.
Promotion: A communication with the market should put stress on environmental aspects, for
example that the company possesses a CP certificate or is ISO 14000 certified. This may be
publicized to improve a firms image. Furthermore, the fact that a company spends expenditures on
environmental protection should be advertised. Third, sponsoring the natural environment is also very
important. And last but not least, ecological products will probably require special sales promotions.
In their book of Sustainability Marketing Belz and Peattie go one step further in terms of not just
marketing but operating green. They transformed the 4 P's into the 4 C's. The four C's customer
solutions, customer cost, communication and convenience are taking the point of view of the customer
(not the producer).
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Customer solutions:These solutions go beyond selling physical products and present solutions to
customer's problems. They imply knowing customers and their needs well and offering products and
services that satisfy customer needs and that take into account social as well as environmental
aspects.
Customer Cost:Customer Cost does not only include the financial price a buyer has to pay for a
product or a service, it also considers the psychological, social and environmental costs of obtaining,
using and disposing of a product.
Communication: Green communication goes beyond promotion, which is a form of persuasion and
a one-way communication from seller to buyer. Communication is a process of interactive dialogue
within which it is essential to build trust and credibility.
Convenience: Means that customers want to use products and services that meet their needs and
that are easy and convenient to access and use.[2]
The level of greening-strategic, quasi-strategic, or tactical dictates exactly what activities should be under-
taken by a company. Strategic greening in one area may or may not be leveraged effectively in others. A
firm could make substantial changes in production processes but opt not to leverage them by positioning
itself as an environmental leader. So although strategic greening is not necessarily strategically integrated
into all marketing activities, it is nevertheless strategic in the product area.[17]
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Green marketing activities[17]
[edit]Eco Labels
An individual's belief that an environmental claim lacks honesty can have a negative effect on attitude
toward a brand. If, on the other side, the consumer grants credibility to the claim, the individual will
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behave more respectfully toward the environment. The problem in extending that credibility to a brand is
that consumers interested in ecological products generally are skeptical of commercial advertisements.
This skepticism is due to various factors such as lack of language, the absence of scientific knowledge
necessary to interpret advertising meaning, and, in particular, the falsehoods and exaggeration of some
advertising techniques. To resolve this problem, independent organizations may choose to guarantee
messages on the environmental benefits of brands with environmental labeling systems sponsored by
independent organizations. This practice tries to diminish perceived biases in environmental information
by promoting standardization of the information with the aim of improving confidence in the evaluation of
environmental benefits of productsall of which should positively affect the purchase intention.[31]
Overview of the different types of eco-labels used to indicate credibility to consumer.[32]
[edit]Life Cycle Assessment
During the late 1980's also new instruments such as life cycle assessment (short: LCA) were invented
which allowed ecological considerations to be introduced into marketing decisions.[2]
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The life cycle assessment model seeks to identify the main types of environmental impact throughout the
life cycle of a product. LCA was developed according to ISO 14040. The main goal of the LCA is to define
the energy and environmental profile of the finished products. The reasons to use LCA arose from the
need to have a precise process accounting and to highlight potential improvements that could be used in
order to increase the environmental, energy and economic efficiency and overall effectiveness of the
processes. In addition, the purpose was to quantify the environmental advantages deriving from the use
of recycled raw material.[33]
[edit]Example for LCA
LCA is used for example in the building sector. Buildings today account for the 40% of the worlds energy
use. The resulting carbon emissions are substantially higher than those of the transportation sector. New
buildings using more energy than necessary are being built every day, and millions of today's inefficient
buildings will remain standing until at least 2050. Its therefore necessary to start reducing energy use in
new and existing buildings in order to reduce the planet's energy-related carbon footprint. Growing
interest, space, and attention in the architecture sector are directed to environmental issues according to
the principles of green building. Mineral, vegetable, or animal materials such as perlite, vermiculite, rock
wool, glass wool, cork, plant fibers (cotton, flax, hemp, coconut), wood fiber, cellulose, and sheep's wool
can be used for the production of insulation panels.[33]
[edit]Green marketing cases
[edit]Phillips's "Marathon" CFL lightbulb
Philips Lighting's first shot at marketing a standalonecompact fluorescent light(CFL) bulb was Earth
Light, at $15 each versus 75 cents for incandescent bulbs.[34]
The product had difficulty climbing out of its
deep green niche. The company re-launched the product as "Marathon," underscoring its new "super long
life" positioning and promise of saving $26 in energy costs over its five-year lifetime.[34]
Finally, with the
U.S. EPA's Energy Star label to add credibility as well as new sensitivity to rising utility costs and
electricity shortages, sales climbed 12 percent in an otherwise flat market.[35]
[edit]Car sharing services
Car-sharing services address the longer-term solutions to consumer needs for betterfuelsavings and
fewer traffic tie-ups and parking nightmares, to complement the environmental benefit of more open
space and reduction ofgreenhouse gases.[citation needed] They may be thought of as a "time-sharing" system
for cars. Consumers who drive less than 7,500 miles a year and do not need a car for work can save
thousands of dollars annually by joining one of the many services springing up, including ZipCar (East
Coast), I-GO Car (Chicago),[36]
Flex Car (Washington State),[37]
and Hour Car (Twin Cities).[38]
[edit]Electronics sector
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The consumerelectronicssector provides room for using green marketing to attract new customers. One
example of this isHP's promise to cut its global energy use 20 percent by the year 2010.[39]
To
accomplish this reduction below 2005 levels,The Hewlett-Packard Companyannounced plans to deliver
energy-efficient products and services and institute energy-efficient operating practices in its facilities
worldwide.
[edit]Products & Services
Now companies are offering more eco-friendly alternatives for their customers. Recycled products for
example, are one of the most popular alternatives that can benefit the environment. These benefits
include sustainable forestry, clean air, energy efficiency, water conservation, and a healthy office. One
example, is the E-commerce business and office supply companyShopletwhich offers a web tool that
allows you to replace similar items in your shopping cart with greener products.
[edit]Introduction of CNG in Delhi
New Delhi, capital of India, was being polluted at a very fast pace untilSupreme Court of Indiaforced a
change to alternative fuels. In 2002, a directive was issued to completely adopt CNG in all public
transport systems to curb pollution.
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