Greenwashing: all you need to know

Greenwashing defines those marketing practices that use sustainability as an instrument to improve brand reputation. As the number of consumers who care more about the environment is increasing, more brands are including the terms “bio” or “eco-friendly” among their product catalogs. Even if at the very core, the company is not sustainable. This is where the expression greenwashing comes in. In the following lines, we will discuss the concept, forms, impact, and techniques of greenwashing.

What is greenwashing?

Greenwashing is a play on the term “whitewashing,” which means using misleading information to mask bad behavior. The expression entered the Concise Oxford Dictionary in 1999. It was defined as: “Disinformation disseminated by an organization to present an environmentally responsible public image”. The end of this practice is to cover up harmful activities of the company and obtain profit under the label of being sustainable and from the marketing campaign itself.

Regarding the origins of the term, the environmental journalist Jay Westerverld made it popular during the 80s although the expression was well-known among the environmentalist circles. At that time the journalist exposed the greenwashing trend expanding among the hotel industry. Hotels were using notes to request customers to reuse the towels with the excuses involved to “save the environment”. However, the real purpose was to benefit from lower laundry costs.

Nowadays, the expression became trendy after activist Greta Thunberg used it to describe the COP26. More concretely, she called the conference the “Global North greenwash festival”. In this way, Greta Thunberg accused the climate conference of being only appearance; and criticized the hypocrisy of political leaders for their laxity and lack of commitment.

What forms of greenwashing exist?

The case with hotels is a good example of some of the practices employed by companies to shadow policies intended to bring economic benefits. Yet, nowadays greenwashing techniques go beyond. Today, it is a marketing strategy itself. Below, we explain some of the most common forms of greenwashing, as described in the Cuadernos de la Cátedra “la Caixa”:

• Dirty business: companies try to position themselves as green despite their main activity being polluting. The purpose of that is to divert attention from their core business.
• Ad bluster: these are marketing campaigns that use misleading techniques that exaggerate environmental achievements by the company.
• Political spin: it occurs when publicly, the company commits to sustainable objectives but, privately, it lobbies against environmental policies (e.g. the aviation sector).
• Obey the law: the company reports as a voluntary achievement, measures that
  are required by law. For example, stating “CFC-free” on aerosols. The EU banned it in 1989.

How does greenwashing affect society?

Greenwashing undermines trust, negatively impacts small businesses, consumers, and the environmental cause itself. It also perpetuates monopolies and threatens democracy by allowing economic interests to take over public matters. The result is misinformation and stagnation. We discuss this in more detail below:

1. It causes market distortions

When companies that are not green at their core take on the environmental discourse, it causes a serious impact on the market. On the one hand, genuinely green companies lose visibility and their competitive advantages. As a result, large multinationals continue to dominate the market. This ultimately harms consumers, as the concentration of power takes control over prices and prevents them from lowering.

On the other hand, these deceptive practices undermine consumer confidence. Consumers are no longer willing to pay a higher price for such products. Therefore, they stop buying them. As a result, many companies stop producing organic products as there is no incentive. The main consequence is market stagnation.

2. It misleads customers

The proliferation of greenwashing dilutes the meaning of concepts such as “green” and “eco-friendly”. Consumers no longer know which claim is true and which is false, so they become skeptical. Also, the distortion misleads consumers. That is, the consumer buys a product with the idea that it is helping the environment when this is not the case. For example, they may think that their vehicle will not generate CO2 emissions. On other occasions, the user disregards the existence of more sustainable alternatives. For example, public transport, car-sharing, or cycling. Thus, greenwashing becomes a disinformation mechanism.

3. Economic powers monopolize the environmental discourse

Environmental protection concerns us as a society. Therefore, the State and institutions must determine the discourse and the roadmap to be followed. Thus, when we let companies take over the green discourse, we are displacing our responsibility as a society to the economic powers. As a consequence, economic interests shape the discourse and define the rules to the detriment of the common good. In general, greenwashing campaigns entail a very high social and environmental cost and jeopardize the achievement of goals to address climate change.

How to spot greenwashing?

Greenwashing uses false eco-labels, the indiscriminate use of symbols, and generic or biased claims among other techniques. The key is to use selective claims, which emphasize or exaggerate positive information and omit the negative. The result creates distortion and confusion among consumers. Below are 6 questions to ask to avoid greenwashing:

6 questions to ask to avoid greenwashing

1. What is the company’s core business?

Polluting companies are most likely to get involved in greenwashing practices. Thus, this is the first question we must ask ourselves. In fact, certain sectors are inherently polluting. For instance, power companies, the automotive sector, and cement plants release significant amounts of CO2 emissions.

On the other hand, we find companies whose impact is indirect. This is the case for telephony, financial services, and hygiene products. For example, financial services may finance unsustainable projects. Hygiene and telephony products, on the other hand, involve intensive use of resources such as water or raw materials. This is sometimes not so obvious and requires a broader view. Hence, it is important to become aware and learn about the impact of the current consumption model.

2. Does the claim use vague, generic, or non-specific language?

Redundant, generic, exaggerated, or imprecise language is one of the first signs of potential unfair practice. An example of this is statements such as “all-natural”, “more sustainable fashion” or “Sustainability is in our DNA”. The statement “all-natural” may lead to the assumption that all-natural products are good. However, the fact is that natural does not mean harmless. Mercury, uranium, and formaldehyde are natural products but are also highly toxic. These types of claims can lead to confusion.

3. Are the statements refutable?

A simple verification method is to check whether the statement is falsifiable. Falsifiability is one of the pillars of the scientific method proposed by Karl Popper. It was used as a criterion to distinguish what is science from what is not. According to this current, a statement is falsifiable if it is contradicted by an observation statement. For example, regarding the statement “Sustainability is in our DNA”, we can ask ourselves what the company’s main activity and means are.

4. Is there any scientific evidence or authority to support the claims?

The indiscriminate use of claims without supporting evidence is another common practice of greenwashing. These are statements lacking scientific evidence, accessible information, or third parties to back them up. Therefore, we should always verify claims of this type.

5. Do they present attributes in a biased way?

A widespread greenwashing practice is to qualify a product as sustainable based on a small set of attributes. For example, the claims stating that a bottle is made of 70% recycled plastic. In these cases, there is an omission of the other factors involved in the manufacturing process. For instance, the way the waste is managed, the amount of energy needed to manufacture them, or the emissions they emit. Therefore, these are questions we should always ask ourselves.

6. Can I recognize the labels on it?

The number of green labels and symbols has significantly increased in recent years. Many of them visually imitate official labels without being official. Others are what are known as “self-declared labels”. These are labels that the proper company develops according to their self-criteria. In other words, there is not a third party to endorse such certification. This practice is a key element of greenwashing and it is particularly harmful to consumers. As consumers,  we must always search for the EU Ecolabel as a guarantee that the product is environmentally friendly.

In conclusion, greenwashing can be a very harmful marketing and communication strategy. It affects us as a society as a whole. Instead, the shift towards a more sustainable production model entails profound changes. First of all, it should begin from the very base of a company. That is its culture and business model. Once a green culture exists within the company, we can design a truly sustainable production chain and operations management. On the other hand, leaving our sustainability strategy in the hands of the marketing department is just greenwashing.