What is Greenwashing?
What is Greenwashing?
In the corporate world, greenwashing refers to a company’s efforts to make it seem as if they are more environmentally friendly than they really are. The term is a combination of the words “green” and “whitewashing.”
If a company that produces high levels of pollution or uses environmentally unfriendly practices wants to improve its public image, it might try to convince the public that they are environmentally conscious. To do this, they may introduce “green” efforts like planting trees or making their buildings more energy efficient. However, these efforts often only amount to window dressing and don’t result in any real change for the environment.
Deforestation and greenhouse gas emissions
Another reason greenwashing is a social problem is that it contributes to deforestation and greenhouse gas emissions. Companies do not need as much paper or cardboard if they use sustainable marketing practices. Packaging alone contributes over 82 million tons of solid waste per year, which finds itself in landfills. When companies make these claims and they turn out to be false, it means there is less recycled material being used, less money building sustainable systems, and more deforestation.
$100B wasted time and money
Finally, this practice can take away from the time and money spent by organizations developing truly beneficial environmental practices if they are instead spending their time trying to fool people into thinking they already have those benefits. Greenwashing also raises costs for consumers who might buy products that claim to be earth-friendly but are really not. Over $100 billion is spent each year on green products and services that people think are better environmentally than they actually are, which could be better used elsewhere.
The Greenwashing Strategy
Greenwashing is not an accusation; rather, it is a strategy used by businesses to appear more environmentally friendly when in fact they are not trying to be. The problem with greenwashing is that it makes consumers less aware of the real environmental practices a company uses and gives them a false impression about how earth-friendly a business really is.
Greenwashing can take many forms, from outright lying about a company’s environmental practices to omitting important facts or using vague, exaggerated language about their efforts. If you are concerned about a company’s claims, make sure they are substantiated by contacting them directly.
How Greenwashing Affects Organizations
Since the term “greenwashing” was coined in 1986, businesses have become much more aware of how environmentally friendly they need to appear. Yet a 2013 report from TerraChoice Environmental Marketing found that 60% of all consumer products’ “green” claims were false or misleading.
As a result, consumers have become more cautious about which companies they trust and many are unwilling to pay a premium for green products. In addition, as more businesses use greenwashing tactics, people have come to expect this kind of marketing and may ignore a company’s actual environmental practices.
Greenwashing has been used in nearly every industry, from energy production to cosmetics. The motivation behind greenwashing typically is the desire to appear more socially responsible than competitors or increase sales. However, there are some important reasons why businesses should not engage in greenwashing.
1.) Greenwashing is deceptive and forces consumers to make purchasing decisions based on incomplete information.
2.) It makes businesses less likely to engage in real environmental practices if they think their efforts will be ignored or misunderstood by the public.
3.) Because there is no legal definition for terms like “natural” or “sustainable,” it is fairly easy for businesses to make false or exaggerated claims about their products.
4.) Greenwashing can lead to increased negative environmental impact by making organizations less likely to engage in real change.
5.) It has resulted in an increase in “buyer beware” behavior among consumers, who are less willing to trust green promises.
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How to Avoid Being Mislead by Greenwashing
If you see a company making claims about its environmental efforts, do research into what they are actually doing before you make any purchasing decisions. To avoid being misled by greenwashing, look for third-party certifications that provide unbiased investigations into how a product is made and used. In addition, watch for vague claims about green benefits. If a business touts something as “green” without explaining how it improves things, there is probably more to this than meets the eye. Finally, research whether or not the target company is transparent and provide information about environmental practices. These can often be found in the form of yearly ESG Reports which may be available on their website.
What is an example of greenwashing?
Since the term “greenwashing” was coined in 1986, businesses have become much more aware of how environmentally friendly they need to appear. Yet a 2013 report from TerraChoice Environmental Marketing found that 60% of all consumer products’ “green-ish” claims were false or misleading.
Zara and Uniqlo both used vague/exaggerated language in their greenness and omitted important facts about their efforts. H&M outright lied about its environmental practices and should be considered the worst example in this scenario.
Does the term 'greenwashing' only apply to automobiles?
No, greenwashing can occur in any industry. While it is most common among car services, energy production companies, and retailers, it has been used by cosmetic companies as well as small businesses.
…companies to use vague language in their claims about the environment without outright lying.
Who came up with greenwashing?
The term “greenwashing” was coined in 1986 by Jay Westerveld, a California advertising executive. He first used this term as part of his work on behalf of the American Forest & Paper Association as they were developing new environmental standards for paper companies that wished to participate in their program.
Greenwashing is also known as eco-labeling or “the practice of making unsubstantiated or misleading claims about the environmental attributes or benefits of a product, service, technology, or company policy.”
What are the signs of greenwashing?
If you see an advertisement or company claim that touts environmental benefits but does not include details about how the product/organization helps the environment, it may be considered greenwashing. It is also possible for companies to use vague language in their claims about the environment without outright lying.
What are some examples of over-the-top greenwashing?
Over-the-top greenwashing can include unclear claims about environmental benefits as well as completely false marketing. One of the most common kinds of over-the-top greenwashing is when companies claim that their product was made using recycled materials or earth-friendly methods without actually being true. The worst instance of this was by H&M who actually lied about its environmental practices and recycled materials.
What is the difference between green marketing and greenwashing?
Green marketing is when a company markets its products as environmentally friendly to gain an advantage over the competition. Greenwashing occurs when that claim is not completely true or may even be patently false.
Some common examples of greenwashing claims include phrases like “eco-friendly” or “green energy.”
Greenwashing techniques and environmental claims
Greenwashing techniques are often used by companies to make their products appear more environmentally friendly than they actually are. One common technique is to use vague language in advertisements and marketing materials that tout environmental benefits without providing any details about how those benefits were achieved or if the claims are even true. Another greenwashing technique is to use recycled materials without being honest about the level of authenticity of those materials.
Who is not so environmentally friendly?
Greenwashing is most common among car services, energy production companies, and retailers. Car services may use this technique to increase their business by using marketing materials that make it seem like they are more environmentally friendly than they actually are. Energy production companies often do this to earn trust and be seen in a more positive light among their customers. Retailers use this technique to make their products seem like they are better for the environment than others on the market, which increases sales of their particular items.
A 2013 report from TerraChoice Environmental Marketing found that 60% of all consumer products’ “green” claims were false or misleading.
What are some examples of greenwashing claims?
Some common examples of greenwashing claims include phrases like “eco-friendly” or “green energy.” A claim could also be unclear, such as when a car service uses marketing materials that tout its goal to reduce emissions without being clear about what the company is doing to achieve it. TerraChoice has a list of seven different types of greenwashing claims, from “Guilt-free” to “All natural,” which is available online.
Caveats and Disclaimers
We have covered many topics in this article and want to be clear that any reference to, or mention of environmental claims, environmentally friendly, climate change, recycled content, and environmentally friendly goods in the content of this article is purely for informational purposes and not to be misconstrued with investment advice or personal opinion. Thank you for reading.
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Research & Curation
Dean Emerick is a curator on sustainability issues with ESG The Report, an online resource for SMEs and Investment professionals focusing on ESG principles. Their primary goal is to help middle-market companies automate Impact Reporting with ESG Software. Leveraging the power of AI, machine learning, and AWS to transition to a sustainable business model. Serving clients in the United States, Canada, UK, Europe, and the global community. If you want to get started, don’t forget to Get the Checklist! ✅