Greenwashing or the act of misleading consumers regarding environmental company practices

GREENWASHING

We are at a crucial time to act on climate and environmental challenges. Our development model, based on the extraction and consumption of large amounts of resources and energy, gives rise to numerous negative impacts regarding climate, deterioration of ecosystems and scarcity of resources. Luckily, for many years the scientific community has focused on investigating and fighting against these problems, and thanks to this, society at all levels is aware of the impact that our way of life has. However, we need to work so that effective and science-based measures are put in place to ensure a sustainable development model for both the environment and people. A problem in this path are actions that seem to be sustainable, but don’t have a real positive impact on the environment. A good example of this is greenwashing.

In light of the growing trend to promote sustainable and environmentally friendly consumption, numerous companies try to attract their customers with products which are not as sustainable as they claim to be, either willingly or unwillingly. Many of the proposed solutions are identified as not responsible after some time because of the progressive research which shows negative impacts not predictable in the beginning. That is why it is so important subjecting any green and sustainable solution or product to critical evaluation and exercising caution to avoid falling victim to greenwashing when making purchases or participating in tenders.

Concepts and forms of greenwashing[1]

Greenwashing was first accused in 1986 by activist Jay Westerveld, when hotels began asking guests to reuse towels, claiming that it was a company water conservation strategy, although, did not have any environmental actions with more significant environmental impact issues. TerraChoice defines greenwashing as “the act of misleading consumers regarding the environmental practices of a company or the environmental performance and positive communication about environmental performance”. Complementarily, Delmas and Burbano define it as “poor environmental performance and positive communication about environmental performance”. Baum considers greenwashing as “the act of disseminating disinformation to consumers regarding the environmental practices of a company or the environmental benefits of a product or service”. Tateishi summarizes greenwashing as “communication that misleads people regarding environmental performance/benefits by not disclosing negative information and disseminating positive information about an organization, service, or product”.

All of these authors describe the phenomenon as two main behaviors simultaneously: retain the disclosure of negative information related to the company’s environmental performance and expose positive information regarding its environmental performance. This two-folded behavior can be named as selective disclosure.

‘Green claims’ (or ‘environmental claims’)[2] can be defined as practices of suggesting or otherwise creating the impression (in the context of a commercial communication, marketing or advertising) that a product or a service is environmentally friendly (i.e. it has a positive impact on the environment) or is less damaging to the environment than competing goods or services (e.g. because it was produced with lower emissions). This may include claims indicating that a product is more environmentally friendly because of its composition, the way it has been manufactured or produced, the way it can be disposed of and the reduction in energy or pollution which can be expected from its use. When such claims are not true or cannot be verified, this practice is often called ‘greenwashing’.

EU new criteria on Green claims

A Commission study from 2020 showed that 53.3% of examined environmental claims in the EU were found to be vague, misleading or unfounded and 40% were unsubstantiated. The absence of common rules for companies making voluntary green claims is leading to ‘greenwashing’ and creating an uneven playing field in the EU’s market, to the disadvantage of genuinely sustainable companies.

In spite of consumers’ willingness to contribute to a greener and more circular economy in their everyday lives, their active and effective role in this green transition is hampered by barriers to making environmentally sustainable consumption choices at the point of sale, notable lack of trust in the credibility of environmental claims and the proliferation of misleading commercial practices related to the environmental sustainability of products.

Last 22^nd of March, the Commission proposed a common criteria against greenwashing and misleading environmental claims. The goal is that under that proposal, consumers will have more clarity, stronger reassurance that when something is sold as green, it actually is green, and better quality information to choose environment-friendly products and services. Businesses will also benefit, as those that make a genuine effort to improve the environmental sustainability of their products will be more easily recognized and rewarded by consumers and able to boost their sales – rather than face unfair competition. This way, the proposal will help establish a level playing field when it comes to information about environmental performance of products.

According to the proposal, when companies choose to make a ‘green claim’ about their products or services, they will have to respect minimum norms on how they substantiate these claims and how they communicate them.

The proposal targets explicit claims, such as for example: ‘T-shirt made of recycled plastic bottles’, ‘CO2 compensated delivery’, ‘packaging made of 30% recycled plastic’ or ‘ocean friendly sunscreen’. It also aims to tackle the proliferation of labels as well as new public and private environmental labels. It covers all voluntary claims about the environmental impacts, aspects or performance of a product, service or the trader itself. However, it excludes claims that are covered by existing EU rules, such as the EU Ecolabel or the organic food logo, because the current laws already ensure that these regulated claims are reliable. Claims which will be covered by upcoming EU regulatory rules, will be excluded for the same reason.

Before companies communicate any of the covered types of ‘green claims’ to consumers, such claims will need to be independently verified and proven with scientific evidence. As part of the scientific analysis, companies will identify the environmental impacts that are actually relevant to their product, as well as identifying any possible trade-offs, to give a full and accurate picture.

Ensuring that environmental labels and claims are credible and trustworthy will allow consumers to make better informed decisions. It will also boost the competitiveness of businesses who are striving to increase the environmental sustainability of their products and activities.

How to avoid greenwashing[3]

From a business perspective, there are also some steps you can follow to avoid falling into greenwashing practices. They include:

• Research: The best way to avoid deception is to educate yourself and the company to avoid falling into the trap of greenwashing. As a consumer, look past the pretty packaging and find out more about a company’s production ethics. As a company, reflect on how accurate the sustainability claims are.
• Receive feedback: Opening up a line of communication with customers is one way of gaining awareness of how the brand’s claims are satisfying the consumers. Receiving feedback is extremely valuable. Above all, it enables gaining an outsider’s perspective on how a product is perceived.
• Involve stakeholders: The more you consult, the more impact you will have. It is advisable to involve colleagues, investors, suppliers, CSR managers etc…
• Look for genuine certifications and logos: Ask only for well-known and verified certifications used in your country. Look for fake labels and certifications.
• Check the ingredients list: While demanding food, cosmetics, or cleaning products, it is necessary to avoid harmful chemicals.
• Watch out for false and misleading claims: Brands like to give credibility to their products by including snippets of information that, at first glance, make them seem like they’re a good choice. In particular, look for the use of “cruelty-free” and “not tested on animals” or “Earth-friendly” and “recyclable/compostable/biodegradable”. These terms are meaningless on their own without further information. Double check brands on their claims, don’t take them at face value.
• Be wary of hidden trade offs: This happens when a brand introduces a token act of being environmental, sustainable, or ethical, while having an unappealing trade off. For instance, promoting their ‘recyclable packaging’ while ignoring the environmental impact of the product itself. Genuine sustainable and eco-friendly products will provide information on manufacturing from worker conditions, energy use, emissions, water and air quality; unethical brands will not.

You can find more information on how to promote sustainability measures in your organization while avoiding greenwashing in the Methodology on Circular Procurement developed in the frame of our project InCEPPP: Innovative method of circular economy in public and private procurement.

[1] de Freitas Netto et al. (2019)

[2] BEUC (2020): Getting Rid of Greenwashing: https://www.beuc.eu/sites/default/files/publications/beuc-x-2020-116_getting_rid_of_green_washing.pdf

[3] 2030 Builders: https://2030.builders/stories/greenwashing/