Eco-friendly production serves companies well for a couple of reasons: it's truly responsible, and it's marketable. There is a distinct, influential and growing segment of consumers who are influenced by a company's environmental responsibility.
My wife bought a journal yesterday called "ecojot" (ecojot.com). It's a writing journal made in Canada of 100% recycled materials (100% post-consumer waste, vegetable based inks and glues, recycled labels). A great concept... but the journal came wrapped in plastic!
If you are that brand-committed - that dedicated to establishing a position in the market (in this case, an eco-friendly position), then you have to go all the way! You can't be half pregnant. You can't claim to be eco-friendly then wrap your product in plastic. You lose all the credibility you tried so hard to establish. Al Gore lost a lot of credibility when they measured the carbon footprint of his mansion. Stephen Page lost credibility when he was arrested. Inconsistencies like these create a negative impression in the consumer's mind that is hard, if not impossible to reverse.
This is the whole point when talking about branding. EVERYTHING you do needs to strengthen your brand. Inconsistencies between your brand positioning (your "reputation") and your actions can do nothing but deflate opinions about your company and therefore, sales.
If you put a stake in the ground, stand by it.