Imagine a marketplace where every product promises to save the planet and protect the environment while meeting your needs. These green promises are everywhere, from "eco-friendly" packaging to "sustainable" apparel lines. However, beneath these glossy labels often lies a disturbing reality: many claims are overstated or false. This deceptive practice, known as greenwashing, misleads both consumers and companies into believing they are making environmentally responsible choices when they are not.
Greenwashing is a rising issue; consumers and companies need to understand this concept. For consumers, it means making informed decisions that genuinely support sustainable practices. For companies, it involves maintaining integrity, building trust, and promoting real sustainable progress.
What is greenwashing?
Greenwashing is the deceptive practice of companies conveying a false impression or providing misleading information about how their products, services, or overall operations are environmentally sound.
It is derived from the combination of "green," which indicates environmental benefits, and "whitewashing," which refers to glossing over wrongdoings. Greenwashing tells “green lies” and aims to make consumers believe that a company is more eco-friendly than it truly is.
Greenwashing is an attempt to make people believe that a company is doing more to protect the environment than it is. It is a barrier to true sustainability.
Key takeaways:
- Greenwashing attempts to exploit the growing consumer demand for environmentally responsible products.
- It creates a false impression that a company or its products are environmentally conscious or friendly, which can mislead consumers.
- Some companies have been accused of greenwashing to capitalise on the environmental, social, and governance (ESG) investing movement.
- Genuinely green products or businesses back up their claims with verifiable facts and detailed information.
Understanding greenwashing is crucial for consumers who want to make informed decisions and support sustainable practices. While some companies genuinely strive for sustainability, others use greenwashing to attract eco-conscious consumers without making real environmental improvements. Recognising greenwashing holds companies accountable and ensures that genuine sustainability is achieved.
Once upon a time: The history of greenwashing
Credit: Plan A
The term "greenwashing" was coined by environmentalist Jay Westerveld in 1986. The origins of the term trace back to a trip Westerveld took in 1983 to Fiji, where he encountered a hotel promoting a towel reuse program under the guise of environmental conservation. However, he observed that the same hotel was undergoing expansion, which involved significant ecological disruption. This contradiction highlighted the hotel's primary intent to cut costs rather than genuinely conserve resources. Westerveld detailed this experience in a 1986 essay, using "greenwashing" to describe such deceptive practices.
Initially, greenwashing was seen in industries like hospitality and automotive. For instance, Chevron's "People Do" campaign in the 1980s portrayed the company as environmentally responsible despite its ongoing environmental transgressions, such as oil spills and habitat destruction. This period saw the rise of superficial environmental claims aimed at improving corporate images without substantial ecological action.
Now, modern greenwashing has become more sophisticated and widespread. Companies across various sectors employ complex marketing strategies and ambiguous claims to appear environmentally friendly. Examples include misleading certifications, selective disclosure of information, and nature-themed imagery to create a false impression of environmental responsibility.
Examples of greenwashing
Greenwashing can take various forms, each designed to mislead consumers about the environmental benefits of a product or service. Here are some common examples:
Misleading labels
Products often feature labels such as "all-natural," "eco-friendly," or "green" without any substantial evidence or certification to back these claims. For example, a plastic bottle may be labelled "eco-friendly" because it is recyclable, even though its production involves harmful chemicals.
Real-life example: Coca-Cola faced criticism for labelling its Dasani water bottles as “100% recyclable.” While the bottles themselves were recyclable, the misleading label overlooked the environmental impact of plastic production and the low recycling rates of plastic bottles.
Hidden trade-offs
Companies might highlight a single positive environmental aspect of a product while concealing other significant adverse impacts. For instance, a company may advertise that its paper products come from sustainably harvested forests but must disclose that the manufacturing process is highly polluting.
Real-life example: Unilever was scrutinised for its Dove body wash, which was marketed using recycled plastic bottles. However, the environmental footprint of producing these bottles, including significant fossil fuels and chemicals, must be disclosed.
Vague claims
Another common tactic is using broad, ambiguous terms like "green" or "sustainable" without providing clear definitions or supporting evidence. For example, a product might be advertised as "green" simply because it uses less packaging without any additional information about the overall environmental impact.
Real-life example: Fiji Water was sued for labelling its product as "carbon negative," claiming that the production process removed more carbon dioxide from the atmosphere than it emitted. The lawsuit argued that these claims were misleading because they did not account for the total lifecycle emissions, including transportation and packaging. Fiji Water agreed to settle the case and pay fines.
Environmental imagery and branding
Brands frequently use imagery associated with nature, such as trees, leaves, and green colours, to create a perception of environmental friendliness. This visual strategy can effectively mislead consumers into believing that a product is more environmentally friendly than it truly is.
Real-life example: Shell faced backlash for its advertisements depicting wind turbines and solar panels despite its significant fossil fuel investments. The imagery created a misleading impression of Shell’s overall environmental impact.
Irrelevant claims
Sometimes, companies make truthful claims that are irrelevant or insignificant in the context of the product's overall environmental impact. For example, a cleaning product might claim to be "CFC-free," even though CFCs have been banned for decades and are irrelevant to the product.
Real-life example: Windex claimed to be “non-toxic” and “safe for the environment,” but this ignored the broader environmental impact of the production and disposal of its plastic bottles.
Lack of sustainability initiatives
Some companies may boast about minor environmental initiatives with little to no impact, using them as a marketing ploy to appear eco-conscious. For example, a large corporation might promote a small-scale tree-planting campaign while continuing to engage in large-scale deforestation activities elsewhere.
Real-life example: Starbucks launched a campaign to eliminate plastic straws, promoting it as a significant environmental initiative. However, the company continued using plastic cups and lids, contributing to plastic pollution.
Selective disclosure
Another form of greenwashing involves selectively disclosing only the positive aspects of a product or company’s environmental impact while omitting negative information. For instance, a company might highlight its use of renewable energy in one facility while ignoring its reliance on fossil fuels in other operations.
Real-life example: Amazon faced criticism for highlighting its investments in renewable energy while failing to disclose the substantial carbon footprint of its global logistics network.
False certifications and endorsements
Some companies may use fake certifications or endorsements, often through labels made ‘in-house’, to give the impression of third-party validation of their environmental claims. These deceptive endorsements can be compelling to consumers who rely on such certifications to ensure a product’s sustainability.
Real-life example: H&M was criticised for using the “Conscious” label. The company was accused of misleading consumers by creating a certification system that lacked transparency and rigorous standards. Also, H&M was fined over $40 million for falsely marketing certain products using recycled materials.
Overstating benefits
Exaggerating a product's environmental benefits is another common greenwashing tactic. For instance, a car manufacturer might claim that its vehicles are "eco-friendly" because they achieve slightly better fuel efficiency, although they still contribute significantly to carbon emissions.
Real-life example: In 2023, Apple was called out for cherry-picking data in its sustainability reports. Critics argued that while Apple highlighted specific environmental achievements, it ignored ongoing issues such as labour conditions in its supply chain and the ecological impact of continuous product launches.
By recognising these tactics, companies can avoid making these mistakes, and consumers will better identify these misleading statements.
The difference between greenwashing and other green-related terms
Greenwashing is just one of many terms that describe various corporate practices related to environmental claims and sustainability efforts. Understanding the distinctions between these terms can help businesses navigate the complex landscape of corporate sustainability.
Green hushing
Green hushing refers to the practice of a company intentionally downplaying or not communicating its sustainability achievements. This is often done to avoid scrutiny or greenwashing accusations or to prevent competitors from copying their initiatives.
Example: A business might achieve significant reductions in carbon emissions but choose not to publicise these achievements to avoid potential criticism if they fail to meet future targets.
Green botching
Green botching occurs when companies implement sustainability measures poorly, causing more harm than good. This typically results from a need for more resources, knowledge, or planning.
Example: A company might ban plastic bags in its stores but fail to provide adequate alternatives, leading to customer inconvenience and backlash and ultimately undermining its sustainability efforts.
Greenwishing
Greenwishing describes situations where companies or individuals have noble environmental intentions but lack realistic plans or achievable targets. These efforts often fail to produce significant benefits due to poor execution or unattainable goals.
Example: A company may set ambitious targets for reducing its carbon footprint without a clear strategy or the necessary resources to achieve these goals, leading to little progress.
Key differences between greenwashing and green-related terms
- Intent vs execution: Greenwashing is about deception—making false claims to appear green—while green-hushing, botching, and greenwishing involve varying transparency and execution. Green hushing hides actual achievements, green botching poorly executes good intentions, and greenwishing lacks realistic planning.
- Visibility: Greenwashing is a public deception, green hushing is a deliberate silence, green botching is a visible failure, and greenwishing is an idealistic but impractical approach.
- Impact: Greenwashing erodes trust and misleads consumers, green hushing prevents knowledge sharing and collaboration, green botching can cause reputational damage, and greenwishing can lead to unfulfilled promises and wasted resources.
For a comprehensive overview of these and other green-related terms, visit our detailed guide on key green-related terms.
The effects of greenwashing on the environment
Greenwashing has several detrimental impacts on the environment and society.
Undermines genuine environmental action
Greenwashing erodes consumer trust in environmental claims, making it harder for genuinely sustainable businesses to be recognised and supported. When companies falsely advertise their products or services, it dilutes the perceived value of absolute sustainability efforts. The European Commission found that 42% of green claims were exaggerated, false, or deceptive. Greenwashing is hindering the progress of actual green initiatives.
Misallocation of resources
Resources that could be used for real environmental improvements are often redirected to marketing campaigns designed to greenwash a company’s image. This misallocation prevents meaningful investments in sustainability, such as reducing carbon footprints, improving energy efficiency, or investing in decarbonisation. As a result, opportunities for significant environmental benefits are lost. According to a landmark report, 95% of consumer products claiming to be green were found to commit at least one vice of greenwashing.
Encourages environmentally harmful practices
Greenwashing enables companies to pursue harmful practices without accountability by creating a false sense of environmental responsibility. For instance, a company might promote a minor sustainability initiative while engaging in significant polluting activities elsewhere. This tactic allows ongoing ecological degradation under the guise of sustainability. Greenwashing could significantly delay meaningful ecological action as companies divert attention from their harmful practices.
Weakens regulatory efforts
When companies engage in greenwashing, they often hide their operations' real environmental impact, making it difficult for regulators to enforce standards and policies effectively. This lack of transparency impedes the implementation of solid sustainability regulations to mitigate climate change and protect ecosystems. The United Nations has called for zero tolerance for net-zero greenwashing, emphasising the need for transparency and accountability.
Impacts on climate change mitigation
False claims about sustainability can slow down the global response to climate change. For example, companies that greenwash their net-zero pledges without making substantial changes to reduce emissions contribute to the illusion of progress. According to the UN, misleading net-zero pledges and greenwashing could push the world over the climate cliff if not addressed promptly.
Legal and financial repercussions
Greenwashing is increasingly becoming a legal issue, with a rise in climate litigation cases targeting companies for false environmental claims. These legal actions can result in significant financial penalties and damage a company’s reputation. Climate litigation cases have nearly doubled over the last three years, with many targeting greenwashing practices. Thus, companies found guilty of greenwashing can face fines of up to 4% of their annual revenue under the new greenwashing laws of the EU.
Greenwashing has far-reaching adverse environmental effects. It undermines genuine sustainability efforts, misallocates resources, enables harmful practices, complicates regulatory enforcement, and delays climate change mitigation. Consumers, businesses, and regulators must recognise and combat greenwashing to foster actual environmental progress.
A guide on how to spot greenwashing
Identifying greenwashing is crucial for making informed, sustainable choices. Here are key strategies to help you spot greenwashing,
1. Look for proof
A legitimate green claim should be backed by verifiable evidence. Companies should provide clear, accessible information about their environmental practices, such as third-party certifications, detailed reports, and transparent supply chain data. Be wary of claims that lack concrete proof or seem vague and unsupported.
2. Beware of vague language
Terms like "eco-friendly," "natural," or "green" are often used without clear definitions. These terms can be misleading if not backed by specific details about how the product or company meets these claims. For example, just because a product is labelled as "natural" does not necessarily mean it is environmentally friendly or safe.
3. Check for hidden trade-offs
Some companies highlight a single positive attribute of a product while ignoring other significant adverse impacts. For instance, a product might be marketed as being made from recycled materials, but the manufacturing process could still be highly polluting. Consider a product's total environmental impact, including its production, use, and disposal.
4. Assess consistency in sustainability efforts
A company genuinely committed to sustainability will have consistent practices across its operations. Inconsistencies can be a red flag, like a company promoting “net-zero” products or services solely by purchasing carbon credits. Consistent and transparent communication about sustainability efforts is a hallmark of genuine environmental responsibility.
5. Scrutinise marketing and imagery
Greenwashing often involves the use of misleading imagery and branding. Pictures of nature, green colours, and eco-friendly visuals can create an illusion of sustainability. However, these visuals do not necessarily reflect the company's actual practices.
6. Verify the company's overall commitment
Research the company’s overall environmental track record. A company genuinely committed to sustainability will have a comprehensive environmental policy, set measurable goals, and regularly report on its progress. Look for detailed sustainability reports that cover all aspects of their ecological impact.
Ten principles to end greenwashing for companies
Greenwashing can significantly undermine genuine sustainability efforts and erode consumer trust. Here are ten principles that companies can follow to avoid greenwashing and promote transparency and sustainability.
1. Be honest and accountable
Ensure that all sustainability claims are scientifically accurate and specific. Avoid using vague terms like "green" or "eco-friendly" without presenting verifiable facts. Honesty and precision in your statements build credibility and trust.
2. Use scientific verification
Back up your claims with solid scientific evidence. Conduct comprehensive life-cycle analyses to understand the environmental impact of your products. Use recognised carbon accounting methodologies, such as the GHG Protocol, to support claims of net-zero emissions.
3. Use established labelling
Use well-known third-party certifications to validate your environmental claims. Avoid creating in-house labels that can mislead consumers. Recognised certifications like B Corp, Fairtrade, or the EU Ecolabel enhance credibility and consumer trust.
4. Be transparent about your company’s carbon footprint
Be transparent about your carbon footprint, including all emission scopes (1, 2, and 3). Even when things go wrong, public accountability is crucial for maintaining trust. Transparency helps stakeholders see your genuine commitment to reducing environmental impact.
5. Implement immediate and realistic action
Set clear, actionable goals for sustainability and begin implementation immediately. Announcing initiatives without follow-through adds to public distrust. Short, mid, and long-term goals with a realistic plan demonstrate a genuine commitment to sustainability.
6. Prioritise reduction over offsetting
Focus on reducing emissions before turning to offsetting. While offsetting is essential, it should not replace direct action to reduce your carbon footprint. Sustainable practices like increased energy efficiency and using renewable energy should come first.
7. Understand the rebound effect
Recognise that improvements in resource efficiency can sometimes lead to increased consumption, which may offset the benefits. Monitor and mitigate such rebound effects to ensure your sustainability measures have the intended positive impact.
8. Integrate sustainability at the core of your business
Sustainability should be integrated into all departments and not confined to marketing. Engage all parts of your organisation in environmental efforts and create a designated 'green team' to foster a sustainable company culture.
9. Go beyond donations and sponsorships
Donations and sponsorships are not substitutes for real sustainability progress. Partner with environmental organisations to share knowledge and best practices while continuously working to reduce your ecological footprint.
10. Have a holistic approach to SDGs
Focus on the Sustainable Development Goals (SDGs) that your company can directly impact, but keep your efforts consistent. Strive for net-positive change across all relevant SDGs, understanding that they are interconnected and support each other.
These principles will help companies avoid greenwashing, build consumer trust, and contribute to genuine sustainability efforts. For more detailed guidance, refer to Plan A's comprehensive Whitepaper on 10 principles to avoid greenwashing.
Tactics to avoid greenwashing as a company
1. Commit to genuine decarbonisation
Focus on actual emission reductions rather than relying heavily on carbon offsets. Invest in renewable energy, enhance energy efficiency, and transition to low-carbon technologies. This commitment should prioritise direct actions over compensatory measures.
2. Implement rigorous carbon accounting
Adopt established carbon accounting methodologies, such as the GHG Protocol, to measure and report your emissions accurately. This will ensure that your net-zero pledges are based on rigorous and transparent data, enhancing their credibility and impact.
3. Set clear and measurable targets
Establish short-, mid-, and long-term targets that are specific, measurable, achievable, relevant, and time-bound. Use the Science-Based Targets initiative (SBTi) for credible reduction targets. These targets should cover all relevant emission scopes (1, 2, and 3) and be aligned with international climate goals such as those outlined in the Paris Agreement.
4. Enhance transparency and reporting
Provide detailed and transparent reporting on your sustainability initiatives, including successes and setbacks. Use globally recognised standards to ensure your reports are comprehensive and comparable.
5. Educate and train your workforce
Ensure that all employees understand the importance of genuine sustainability efforts and the risks of greenwashing. Provide training on environmental practices and encourage a culture of sustainability within the organisation. This internal alignment is crucial for executing credible and effective green strategies.
6. Leverage third-party verification
Use independent third-party verifiers to audit and certify your sustainability claims. This adds an extra layer of credibility and helps prevent accusations of greenwashing. Certifications from reputable organisations like B Corp or Fairtrade can enhance trust in your environmental initiatives.
7. Engage stakeholders and foster accountability
Involve all stakeholders in your sustainability journey, including employees, customers, investors, and regulators. Create mechanisms for feedback and accountability to ensure that your green initiatives are scrutinised and improved upon continuously. Transparency in stakeholder engagement fosters trust and drives genuine progress.
By implementing these tactics, companies can avoid greenwashing and contribute meaningfully to global sustainability efforts. This approach enhances credibility and drives real environmental progress, building long-term stakeholder trust.
The main European regulations tackling greenwashing
The European Union has introduced several regulations to combat greenwashing, enhance transparency, and ensure that environmental claims are reliable and verifiable. Here are the fundamental EU greenwashing regulations and UK to look out for:
The Green Claims Directive
In March 2023, the European Commission proposed the Green Claims Directive to standardise and enforce the substantiation of environmental claims made by companies. This directive requires that all ecological claims be based on robust, science-based, and verifiable methods.
Companies must provide clear, specific evidence for any claims about their products' environmental benefits, ensuring they are reliable and comparable across the EU. The directive also mandates that an independent and accredited verifier check all green claims to prevent misleading information.
The Unfair Commercial Practices Directive (UCPD)
The revised Unfair Commercial Practices Directive, adopted in February 2024, includes specific provisions to address greenwashing. It adds greenwashing practices to the list of unfair commercial practices, making it illegal for companies to make vague, misleading, or unsubstantiated environmental claims.
The directive also enhances consumer protection by requiring companies to provide detailed information about their product's environmental impact and durability before purchase.
The Empowering Consumers for the Green Transition Directive
Adopted alongside the Green Claims Directive, this regulation aims to strengthen consumer rights and ensure better information on product durability and environmental impact. It provides consumers reliable information to make informed decisions, promoting sustainable consumption patterns. This directive also aims to harmonise the rules across the EU, creating a level playing field for businesses and enhancing market transparency.
New Anti-Greenwashing Rule by the UK FCA
The UK's Financial Conduct Authority (FCA) has introduced a new anti-greenwashing rule to complement existing EU regulations. This rule requires financial firms to ensure that their sustainability claims are transparent, fair, and not misleading. The FCA's guidance emphasises the need for robust governance and oversight to prevent greenwashing and protect consumers.
Greenwashing undermines genuine sustainability and erodes trust. Recognising and addressing these deceptive practices is crucial for fostering real environmental progress. Consumers and companies can support authentic sustainability efforts by staying informed and vigilant.
Are you ready to enhance your company's sustainability efforts? Schedule a call with Plan A today to achieve genuine sustainability.
