As the world becomes increasingly aware of the need for sustainability practices, more and more companies are jumping on the “go green” bandwagon. However, not all companies that claim to be environmentally conscious are as green as they seem. This is where the concept of greenwashing comes in. In this blog post, we will explore the concept of greenwashing, including common tactics used, and its impact on consumers and the environment.
The term “greenwashing” was coined in 1986 by environmentalist Jay Westerveld. He criticized the irony of the “save the towel” movement in hotels at the time. The hotel would place notices in hotel rooms asking guests to reuse their towels to save the environment but make no other visible signs or effort to be more sustainable. Jay Westerveld argued in an essay that the hotel was simply trying to reduce laundry costs. Today we see similar examples of false or exaggerated claims such as plastics labeled as “compostable” or “biodegradable” without disclaimers about how quickly the product will biodegrade in a landfill. Eggs are advertised as “cage-free” when in reality, hens are overcrowded indoors. Carbon offsetting is another widely discussed topic, and it may not be immediately clear whether it falls under the category of greenwashing. While it can contribute to the reduction of GHG emissions, some parties see it as a form of greenwashing when used in place of mitigation efforts.
Essentially, greenwashing is a deception tactic, whether intentional or accidental, used by companies to make exaggerated or false claims about the environmental benefits of their products or services. For example, some companies spend more time and money on marketing themselves as being sustainable than on actually minimizing their environmental impact. By greenwashing, companies can capitalize on the growing demand for sustainable practices and environmentally friendly products, thus becoming more appealing to stakeholders, investors, and consumers who are concerned about the environment and sustainability.
While greenwashing marketing can take many forms, some of the most common tactics are:
Greenwashing is an unethical practice that deceives investors and consumers who are genuinely seeking environmentally friendly companies or products. In many cases, these “green” products are sold at a higher price, causing customers to overpay. Faulty assumptions about a company’s environmental responsibility can also lead investors or stakeholders to allocate capital inappropriately. Greenwashing can severely damage a company’s reputation and brand. It also undermines the efforts of companies that are genuinely dedicated to sustainability and erodes trust in the marketplace. Furthermore, false or misleading claims can lead to legal action, resulting in fines and legal fees.
While companies have control over their direct emissions (Scope 1) and indirect emissions from purchased energy (Scope), Scope 3 emissions are often difficult to track and manage as they occur outside of the company's immediate control. As a result, companies may unknowingly engage in greenwashing by failing to consider Scope 3 emissions in their sustainability reporting or by making claims about their products' sustainability without accounting for these emissions. For example, a company may claim that its products are environmentally friendly due to their low emissions during use while ignoring the significant emissions generated during the production and transportation of the raw materials used in those products. To avoid involuntary greenwashing, companies can:
In order to voluntarily or involuntarily avoid greenwashing, it is crucial for companies to assess and report their Scope 1-3 emissions, as well as work with suppliers and other stakeholders to reduce the environmental impact of their value chain. Adopting this sustainable practice can result in decreased overhead costs, mitigate risk, boost stakeholder and employee involvement, and uncover fresh market opportunities.
To avoid greenwashing in your business, it’s essential to promote transparency, especially regarding the environmental benefits of your products or services. This involves taking genuine actions toward operating more sustainably such as reducing waste, cutting emissions, recycling, using renewable energy, and more. Furthermore, companies must establish attainable objectives, track progress, and create authentic reports that can be verified.