What is Greenwashing and How Can It Be Avoided?

As the climate crisis increasingly comes into focus, thousands of businesses are being accused of greenwashing – a practice that is detrimental to the environment, consumers, and to company reputations.

So let’s take a closer look at what greenwashing means, how it works in a business context, and how you can avoid these harmful practices.

What is Greenwashing?

In short, greenwashing is when a company falsely (deliberately or otherwise) conveys their operations or products as environmentally sound in an attempt to capitalise on the growing consumer demand for environmentally conscious products and services.

Derived from the term whitewashing, which refers to covering something up with false information to conceal or hide the truth, greenwashing involves businesses exaggerating or misrepresenting the environmental benefits of their products or services.

It doesn’t matter whether the company or organisation in question deliberately or inadvertently makes false claims about their products – the end result is the same: consumers are misled, businesses profit from the misinformation, and the environment suffers as a consequence.

The practice of purporting to be environmentally conscious for marketing purposes but not making any notable sustainability efforts is so rife that most consumers now don’t trust most claims made by companies concerning environmental performance. Recent research has found that only 25% of consumers trust claims made by companies about sustainability or environmental practices.

Furthermore, a routine screening carried out by the International Consumer Protection and Enforcement Network (ICPEN) found 42% of websites analysed (over 500) contained exaggerated, false, or deceptive environmental claims that were egregious enough to qualify as unfair commercial practices under EU and UK law.

How Does Greenwashing Work in a Business Context?

While greenwashing can occur in various contexts, including governments trying to make themselves look greener than they really are, it’s most prevalent in business contexts.

Perhaps the most famous example of greenwashing was the campaign to reuse towels launched by several hotel chains that gave birth to the term itself. It was coined by Jay Westerveld, an American Environmentalist, who noticed a sign asking customers to reuse their towels in a Fiji hotel.

An establishment actively expanding and destroying local natural habitats was ironically asking its patrons to think of the environment by reducing their use of commercial laundry services. In practice, all this meant was reduced hotel laundry costs and negligible energy consumption and resource savings.

His essay was entitled “It All Comes Out in the Greenwash,” and the term has stuck ever since.

Since the reusing towel campaign, there have been thousands of examples of businesses making misleading environmental claims in attempts to boost sales.

Greenwashing Examples in Business

• McDonald’s ditching its plastic straws: In what was heralded as a positive move by McDonald’s to phase out plastic straws in response to growing environmental concerns, it soon became apparent that most of their paper replacements also ended up in general waste since they were too thick and often too sodden to be recycled. To this day, the firm who manufactured them claims the straws are 100% recyclable, but in practice, most of the 1.8 million straws they get through each day end up in landfill sites.
• Volkswagen emissions scandal: VW, along with other car markers, deliberately deceived regulators and consumers about their diesel engines’ emission performance to comply with C02 emissions standards. They passed tests by adding a piece of software to their engines that reduced emissions during evaluations. Once uncovered, the company had to recall 11 million cars and pay more than £30 billion in fines, compensation, and other associated penalties.
• Qantas’ phantom carbon credits: Qantas made false claims about its carbon offsetting scheme by suggesting that the offsets were certified and legitimate. Not only were the carbon credits a sham, but the April Salumei REDD project selected in Papua New Guinea didn’t even have any documented existence post-2013. The discovery led to a questioning of the entire aviation industry’s approach to carbon offsets. A subsequent joint investigation between the Guardian and Greenpeace found the global aviation industry’s carbon offsetting scheme to be deeply flawed and largely ineffective.

Theoretical Greenwashing Examples

• Printing claims on packaging such as “made of 50% more recycled plastic” when that increase represents a meagre jump from 2% to 3% recycled content.
• Products claiming to be recyclable when, in reality, they are only recyclable at specialist facilities or not at all.
• When a company says they’re adopting greener policies by reducing paper use. In most cases, they are switching to cloud-based solutions that utilise energy-intensive data centres often run using fossil-fuel-generated electricity, leaving the net benefit questionable.
• When an organisation claims green credentials by switching to low-energy lightbulbs but sourcing them from a factory that pollutes its local rivers.

These represent just a fraction of examples where greenwashing occurs on a daily basis in business contexts.

Why is Greenwashing Harmful?

Greenwashing is harmful in several ways. However, let’s look at it through the three primary lenses: the planet, consumers, and businesses themselves.

How Greenwashing Harms the Planet

It hardly needs to be stated that falsely claiming environmental benefits is detrimental to the planet. When companies claim to be acting in the best interests of our environment but fail to live up to those expectations, it undermines the credibility of genuine green initiatives. It erodes trust in those schemes that are working to improve our planet’s environmental performance.

That’s without mentioning that many greenwashing entities aren’t actually doing anything meaningful to combat climate change and other environment-harming practices. These companies could instead be putting their efforts into initiatives that genuinely make a difference in the planet’s health.

If every company guilty of greenwashing invested its resources into genuine green policies and practices, it would make a massive difference to the planet’s environmental trajectory.

How Greenwashing Harms Consumers

Customers are increasingly environmentally-conscious in their purchasing decisions. As the 2020s progress,  more and more customers will be paying attention to the environmental impact of the products and services they use.

A whopping 85% of consumers have become “greener” in their purchasing in recent years, with many paying a hefty premium for sustainable products and services. If they are buying greenwashed products and services, however, they are effectively wasting their money on products that don’t live up to their environmentally friendly claims.

They are being deceived, deliberately in some cases, as to the actual environmental performance of the products they are buying. These fraudulent claims can do serious financial and emotional harm to consumers, which is why the reaction and criticism is so fierce when greenwashing is discovered.

How Greenwashing Harms Companies and Organisations

Today, greenwashing is one of the most dangerous marketing strategies a company can adopt. Such is the value placed on environmental sustainability by today’s consumers that any false or misleading claims are likely to inflict severe, if not irreparable, damage to a company’s reputation.

Not only will your company or brand receive negative press coverage, suffer reputational damage, and incur financial penalties if caught out, but you could also face further legal repercussions from industry regulators, non-governmental organisations, or consumers who have suffered financial losses as a result of buying greenwashed products or services.

While, in the past, greenwashing was relatively harmless to a company’s bottom line, that is no longer the case. Even cases of inadvertent greenwashing can damage a company’s reputation, so it’s imperative that you have thorough oversight of your green claims and processes to ensure they are entirely accurate and sustainable.

How to Avoid Greenwashing

The good news is that greenwashing is easily avoidable for companies and other organisations looking to espouse their environmental credentials.

Below are some recommendations and tips to avoid greenwashing in your business:

Avoid Fluffy or Vague Language: Be Specific

Specificity is one of the keys to avoiding greenwashing.

Terms such as “eco-friendly” and “sustainable” are impossible to quantify accurately. If you use eco-friendly ingredients in your shampoo, for example, list them. Name the supplier, the country of origin, and the percentage of the ingredient that is organic or sustainably sourced.

Be Aware of Green Hypocrisy Right Across Your Value Chain

One of the classic mistakes committed by greenwashing companies is claiming environmental benefits while purchasing from suppliers or partners that engage in environmentally-damaging practices. We’ve already mentioned sourcing low-energy lightbulbs from a factory that pollutes its local river, but that’s just the tip of the iceberg regarding supply chain issues.

Thus, you must conduct thorough due diligence checks across your entire value chain to ensure green claims are accurate and responsible.

Have Evidential Support and Documentation for Claims

Any claim about your company’s environmental performance or products should be backed with evidence.

If you can’t immediately prove your claims, then don’t make them in the first place. That way, the moment any kind of greenwashing accusation is made against you, you can immediately demonstrate that your claims are legitimate, substantiated and accurate.

Achieve Certifications and Accreditations from Reputable Sources

Such is the rush for companies to become more environmentally sound; a whole industry of bogus environmental certifications and accreditations has sprung up in recent years. Consumers are increasingly aware of third-party “green” product labels and certifications that hold no value or weight in terms of environmental performance.

Therefore, you must thoroughly research any certifications or accreditations you use to promote your environmental credentials to ensure they meet the highest industry standards and expectations.

Make A Genuine Commitment to Tackle Your Emissions

It’s one thing to claim you are “reducing carbon emissions” or “pursuing carbon neutrality,” but you must prove you are genuinely committed to doing so. For instance, if you commit to achieving PAS 2060 certification by a specific date, you demonstrate your seriousness about becoming carbon neutral.

By going ever further and pledging to reach the Carbon Trust’s Net Zero Standard by 2030, for example, you once again show the world that you mean what you say by holding yourself accountable to rigorous science-based targets rather than vague promises.

Avoid the Repercussions of Greenwashing Today by Committing to Quantifiable Goals

Greenwashing is an ongoing issue that shows no sign of going away soon. However, thanks to recent strides in public education surrounding environmental harm and corporate responsibility, more and more companies are avoiding greenwashing (and the overwhelmingly negative ramifications) altogether by committing to quantifiable goals and measurable targets.

Whether you’re looking to become an accredited carbon-neutral business or you want to officially achieve net zero before the end of the decade, at Beyond Procurement, our carbon consultants can help you set, track, and achieve your carbon-reduction goals.

With industry-leading business carbon footprint measurement tools, proprietary carbon management plans, and expertise in helping companies obtain gold-standard environmental certifications, we can help you avoid the inevitable repercussions of greenwashing.

To learn more about how your organisation can commit to quantifiable goals and measurable targets to improve its environmental performance, get in touch with our team today on 01444 416529 or book a 15-minute consultation online now.