In recent years, companies and consumers are focusing on environmental sustainability. The awareness of issues such as climate change of pollution is at an all-time high. This has increased the demand for companies to become more environmentally friendly and market their products along the same lines. However, there are tons of companies who claim sustainability, are they all true? Not really! Over 59% of green claims which are made by European or UK brands are misleading. This is greenwashing. Moreover, this is becoming increasingly rampant across industries. In this article we will cover what is it, why companies do it, how it harms, etc. So let’s get into it.

A dive into greenwashing 

Greenwashing is the practice of making false claims. The assertions concern a product, service, or organization’s sustainability or environmental advantages. The name is a combination of the words “green” and “whitewashing”. Environmentalism is what “green” alludes to. Additionally, the term “Whitewashing” refers to concealing or erasing problematic elements. So businesses engage in greenwashing by releasing positive information. 

The information is about their environmental practices. Furthermore, they omit negative information. This is because the omitted information may call those practices into question. This creates an image that the company is more environmentally friendly than it really is.

Some common examples of greenwashing include:

• Vague claims that a product is “eco-friendly” or “sustainable” without proof or certifications 
• Advertising campaigns emphasizing “natural” or “green” aspects of a product, when most aspects are harmful
• Targeting niche “green” consumers rather than substantively changing business practices
• Using visual cues like green packaging to imply sustainability without evidence
• Touting marginal improvements as major achievements (e.g. reducing waste by 1%)

But why do companies indulge in such behaviors? Let’s find out.

Why do companies indulge in greenwashing?

Businesses are strongly financially motivated to engage in greenwashing. Businesses aim to appeal to consumers who care about the environment as public concern develops. Additionally, they don’t want to lose sales. However, a substantial revamp of sustainability frequently necessitates a big financial expenditure. Greenwashing offers a quick fix. This is because being considered environmentally friendly can boost businesses’ reputations without incurring significant costs. 

Furthermore, ambiguous sustainability statements are challenging to verify, while making significant adjustments exposes businesses to scrutiny. As per Gitnux, over 59% of the subjects that were studied for claims did not offer readily available proof to back up them. Through “greenwashing,” businesses can satisfy public demand for environmental responsibility. While doing so, clarity on their actual impact is avoided. In greenwashing initiatives, metrics definition and third-party certifications like B-Corp or Energy Star are frequently absent, but these measures can certify sustainability advances. In the end, greenwashing is a result of businesses putting profits ahead of meaningful change.

With a large number of companies indulging in such a bad practice, how exactly does it harm us? Keep scrolling to find out.

What are the harms of greenwashing?

While companies may see greenwashing as beneficial, this deceptive practice has seriously harmful consequences:

• Consumer deception

Consumers are given inaccurate information about goods and brands when there is greenwashing. The result is that well-intentioned consumers support businesses with subpar environmental records. Additionally, “green fatigue” is brought on by it, which undermines consumer confidence in sustainability claims in general.

• Delayed progress

Greenwashing enables businesses to project an eco-friendly image without really making changes to their operations. This lessens the necessity for businesses to adopt greener solutions and their responsibility to do so. As a result, environmental issues halt in their progress.

• Unfair advantage

Companies that take sustainability seriously and invest in it are undercut. This is a tactic used by rivals who use greenwashing. The odds are stacked against real transparency and change. 

• Cynicism and confusion

As people become more aware of greenwashing, it generates doubt and cynicism about how to recognize truly green products. Furthermore, uncertainty about which assertions are credible might eventually limit consumer choice and group action.

There are tons of other harms like enabling activists to short sellers, eroding NGO relationships, reputation damage of responsible players, etc. So to avert it, some awareness is needed on the consumer side as well. But how can they identify it? Let’s see.

How can you identify greenwashing?

How can consumers look past glossy images and slick slogans to spot potential greenwashing? Watch for these common red flags:

• Research the company

Examine the company’s overall environmental history in addition to the product itself. Have they agreed to climate targets based on science? Look for recent infractions or fines that expose duplicity in branding and practices.

• Consider tradeoffs

Does a product just emphasize one aspect of sustainability while downplaying others? Promoting “organic” production but shipping it a long way, for instance. Think about the entire lifecycle.

• Compare competitors 

Compare claims to those of similar companies rather than taking them at face value. This aids in spotting embellishments or partial disclosure. Variation can show who lives up to their words.

• Follow the money 

Keep track of the proportion of a company’s items that have eco-attributes. Is it the main brand or a specialized green sub-brand? Business as usual is often covered up by sustainability washing.

• Trust your intuition 

A red flag would be claims that seem more focused on enhancing a brand’s reputation than protecting the environment. Greenwashing is frequently covered up by overused terminology.

So when sustainability marketing is more spin than truth, it can be identified by carefully reading the language used, looking for substantial evidence, and conducting more study on a company’s environmental history.

The Path Ahead

Greenwashing has become all too common, with businesses inflating their environmental claims in order to increase profits. On numerous fronts, however, coordinated action can lead to progress. Consumers must receive the information they need to make wise decisions that reward authenticity and put pressure on laggards. To bridge gaps, governments must enact stronger rules on sustainability marketing. Trade associations should support member reporting and openness. Businesses that are committed to sustainability must seek out credible third-party certifications and disclosures.

The timely Greenwashing Legal Risk Management and Compliance Summit on 19-20th October 2023 will enable professionals to get ahead of the issue. The summit offers an opportunity for businesses in all industries like fashion, automotive, aviation, and many more. This is to grasp tightening regulations and prevent greenwashing lawsuits or brand harm as scrutiny of corporate sustainability claims intensifies. Participants can share best practices for governance, verifying claims, and doing due diligence in the supply chain. Moreover, legal teams require strong ESG strategies as stakeholders and consumers expect evidence to support sustainable claims. Attendees with an eye toward the future will learn about this crucial knowledge and more. This is to harmonize practices with international standards and rebuild trust in corporate transparency. So what are you waiting for? Book your seat now!