Greenwashing accusations are prevalent in the media, with potential dire consequences for businesses. But, comprehending greenwashing, seeing examples, and understanding its motivations is essential to avoiding them.
Quick links
- What is greenwashing?
- Greenwashing origins
- Intention behind greenwashing
- Reason for greenwashing
- Examples of greenwashing
- Government action
- Conclusion
What is greenwashing?
The term of ‘greenwashing’ refers to a form of advertising spin in which green PR and green marketing are deceptively employed to persuade the public that an organisation’s products, aims, and policies are environmentally friendly.
The term has grown exponentially in recent times, to such a degree that it was added to the official Merriam-Webster dictionary.
The act or practice of making a product, policy, activity, etc. that appears to be more environmentally friendly or less environmentally damaging than it really is
Accusations of ‘greenwashing’ are typically made against companies, organisations and governments who spend considerable amounts of money on green marketing, and not on actions which lead to tangible and impactful change. But, accusations can also be made toward entities who overpromised on what they could achieve, despite good intentions.
Where did the term greenwashing originate?
The term “greenwashing” was originally coined by prominent environmentalist Jay Westerveld in 1986.
Westerveld had reportedly stopped off in Fiji to surf at the Beachcomber Resort. While there, he noticed several signs around the resort asking guests to reuse towels in order to help mitigate ecological damage caused by laundering. When Westerveld noticed that the resort was also expanding, with development causing damage to the local ecology, he was surprised by the misalignment between the messaging and the less environmentally friendly actions taken by the resort.
In a later essay, Westerveld would argue that the resort was misleading guests into thinking that encouraging the reuse of towels was part of their environmental strategy, and was, in fact, a cost-saving measure.
“I finally wrote something like, ‘It all comes out in the greenwash.’” explains Westerveld in an old interview on the topic, “A guy in the class with me worked for a literary magazine and had me write an essay about it.” And, since the magazine had a large readership in nearby New York City, the term quickly caught on in the wider media.
Intention behind greenwashing
The goal of “green” marketing is to expand a company’s customer base by aligning with their values with stakeholders, increasing its appeal and driving sales, investment, or popularity.
Unfortunately, some businesses resort to deceptive marketing campaigns (see below) aimed at manipulating their customers, betraying their trust.
However, it’s important to note that not all instances of greenwashing are driven by malicious intent. According to a 2023 study conducted by Google Cloud, many senior executives genuinely express concerns about being accused of greenwashing because they have sincere sustainability goals and intentions. However, they often lack the necessary plan or resources to effectively achieve these goals, leading to uncertainty.
Companies looking to avoid claims of greenwashing and the reputational damage that comes from it should carefully consider their marketing strategies.
In addition to greenwashing, a new disconcerting trend called “green hushing” is emerging among businesses genuinely seeking to adopt more sustainable practices. This trend stems from companies fearing the potential backlash they might face if consumers perceive their efforts as inadequate.
Why would companies greenwash?
As previously mentioned, ‘Greenwashing’ occurs when sustainable goals, achievements, or initiatives are outwardly promoted to make the source appear value-driven and have a positive impact on the planet. This means Greenwashing is the symptom of trying to meet the desires of today’s generations.
- Consumers – According to a 2021 study, 75% of consumers from Gen Z (those born between 1997 and 2012) place sustainability practices ahead of brand names in their purchasing decisions and actions. Sustainability has now become a key component in motivating consumers, and it has also become a key element in marketing strategies developed by companies when thinking about how to expand their customer base.
- Investors – The rise of ESG investing has led organisations to present themselves as ‘eco-friendly’ to attract like-minded investors. A 2021 study by the Index Industry Association (IIA) found a 43% increase in sustainable indices measuring ESG criteria, following a 40% rise in the previous year. More recently, a study by Aviva Investors showed that nine out of 10 of institutional investors consider ESG factors for real asset investments.
Examples of businesses greenwashing
The term ‘greenwashing’ is subjective and what constitutes an act of ‘greenwashing’ may differ between individuals; however, official regulatory bodies have highlighted the following companies as prime examples of greenwashing.
Companies looking to avoid claims of greenwashing and the reputational damage that comes from it should carefully consider their marketing strategies.
Automotive industry
Vehicle emission standards are legal requirements limiting the number of pollutants released into the atmosphere. Manufacturers must ensure their vehicles fall in line with general regulations. Some local governments are also implementing local levies on vehicles entering their towns or cities based on emission standards.
In the last few decades, both General Motors (GM) and Volkswagen (VW) have been caught attempting to circumvent emission tests in an effort to make their products appear more environmentally friendly than they are.
First up, General Motors. In 1995, the once-largest global car manufacturer agreed to pay $45 million after it was accused of violating pollution controls on 470,000 Cadillac luxury sedans. Tests revealed that when the air conditioning was turned on, the fuel-hungry V8 engines in the cars would turn off their pollution controls, obscuring their true output.
20 years later, in 2015, the United States Environmental Protection Agency (EPA) issued a notice of violation of the Clean Air Act to Volkswagen for its “clean diesel” range of cars after identifying a similar “defeat device” included in their design.
When tested under laboratory conditions, the car was able to tune the engine to operate at below-normal power and performance, therefore giving off a lower emission rate. Once on the road, the engines switched back to normal operating mode.
Worsening the issue, VW had backed the car’s release with a huge marketing campaign trumpeting their low emissions, with the aim of encouraging eco-conscious customers to specifically buy their products to “protect the planet”.
Fashion industry
A 2021 report analysing the websites of 12 of the biggest British and European fashion brands, including ASOS, H&M and Zara, found that over 50% of the environmental claims made could be classified as “unsubstantiated” and “misleading”.
Part of the study revealed that 39% of the products assessed came with sustainability-related claims, such as “eco”, “recycled”, or simply “sustainable”. However, when assessed against the Competition and Markets Authority’s (CMA) guidelines; 59% didn’t stand up to the test.
The researchers focused on the materials used to make the clothes, accessories, and footwear, finding that H&M’s “Conscious Collection” actually contained more synthetic materials than its main collection.
Following allegations of greenwashing in 2022, a number of major fashion brands, including H&M, announced they would pause the use of a tool called the Higg Materials Sustainability Index (MSI), to compare the environmental impact of different materials.
Airline industry
In 2019, Ryanair began a marketing campaign claiming they had the lowest carbon emissions of any major airline in Europe. After receiving complaints from the public who felt this was misleading, the UK’s Advertising Standards Authority (ASA) stepped in to investigate.
Ryanair argued its green credentials were based on having the youngest aircraft fleet, using the most fuel-efficient engines, and flying 97% full on average. Stating its claims were supported using data from the European aviation organisation Euro control and airline efficiency rankings published by Brighter Plant – a provider of carbon and energy calculations.
But, the airline efficiency ranking used by Ryanair was dated 2011, “and was therefore of little value as substantiation for a comparison made in 2019,” the ASA said.
Consequently, the ASA concluded that the claims were misleading to consumers and ruled that the adverts were not to be repeated “in their current form.” Ryanair complied.
Coca-cola greenwashing case
In 2021, Coca-Cola faced accusations of greenwashing for misleadingly presenting itself as a sustainable and environmentally friendly company. The plaintiffs, Earth Island Institute, argued that the company’s claims, such as the statement on their website expressing a commitment to creating a more sustainable future, were false. The specific allegation was that Coca-Cola, despite its claims, was one of the largest contributors to plastic pollution worldwide.
However, in late 2022, the case against Coca-Cola was dismissed by the court. The ruling stated that the company’s statements were aspirational in nature and did not violate consumer laws. While the court acknowledged that Coca-Cola might have failed to achieve its previously advertised environmental goals, it did not restrict the company from setting future environmental objectives publicly. Furthermore, the court determined that Coca-Cola’s statements were not directly linked to a specific product or service, which is also a requirement under the relevant consumer law.
What are governments doing to stop greenwashing?
Governments worldwide acknowledge how harmful greenwashing can be. It allows companies to continue to uphold damaging practices, while erroneously directing financial capital away from truly sustainable businesses who are working towards a sustainable future.
In the UK
In a bid to clamp down on greenwashing, the UK’s Financial Conduct Authority (FCA) is proposing a package of new measures including investment product sustainability labels and restrictions on how terms like ‘ESG’, ‘green’ or ‘sustainable’ can be used.
In the EU
Similarly, the EU is looking to clamp down on greenwashing – in May 2023, Members of the European Parliament (MEPs) gave their support to a proposed legislation aimed at improving product labelling and durability, and curbing deceptive marketing claims.
Should the regulation pass, companies planning to use ‘environmentally friendly’, ‘natural’, ‘biodegradable’, ‘climate neutral’, or ‘eco’ in their marketing will need to ensure they are accompanied by detailed evidence that explains how and why this is the case.
Closing thoughts
Greenwashing has been a prominent topic in the media lately, and for good reason. This deceptive practice can profoundly influence the adoption of sustainable practices and investments.
However, accusations of greenwashing should be approached with caution and consider the context in which they arise. Failing to do so may inadvertently lead companies to engage in ‘greenhushing,’ which also undermines global sustainability efforts.
By acknowledging the gravity of greenwashing and its potential consequences, we can address this issue effectively and encourage genuine commitment to sustainability.
