Greenwashing: what it actually is, why does it matter and how to avoid it
A core element of making sustainable changes within an organisation is communicating about your plans, progress and achievements, whether that’s to internal staff, your customers, funders or board members. However, it is vital that these claims and actions accurately reflect what you are doing as an organisation, to strengthen trust and transparency. Increasingly organisations are being put under the microscope to ensure their claims are fully accurate and traceable. Any organisation not able to showcase their achievements in a verifiable way – could be open to claims of the increasingly popular term – greenwashing.
What is greenwashing?
When an organisation misleads the public to claim it is doing more to protect the environment than it actually is, this is greenwashing. Organisations could appear to be implementing significant sustainability changes to their operations when there are only very limited actions in place, or set targets to reduce pollution that are repeatedly shifted and never fulfilled1.
Greenwashing can also cover claims around sustainability more generally: an organisation could claim it, or a product, is ‘sustainable’ environmentally, whilst neglecting the social and economic pillars of sustainability1.
Although greenwashing can be accidental if there is a lack of understanding around sustainability within an organisation, it is usually seen as a purposeful way to increase profits by using customers’ rising interest in sustainable products2. These tactics can also be used to alter the overall perception of a brand, or even describe climate reporting approaches by governments, such as criticism directed at the UK government for not including aviation emissions within its climate targets and reporting3.
Why does this matter?
Greenwashing has serious consequences. As well as being illegal under consumer protection laws due to the intention to mislead, exposed greenwashing can damage consumer trust in a brand. Complaints can be raised with the Advertising Standards Agency (ASA), or through investigations by journalists, whose work can be circulated online by sustainability social media creators who highlight instances of greenwashing to educate their followers.
Although brand reputation is often thought of as the major negative impact of greenwashing, There is also a far more wide-reaching outcome when organisations successfully mislead their customers: an escalation of environmental damage and climate change. Behaviour, in this case consumer choice, can drive sustainable change through demand for products and services that have a lower environmental impact. However, if consumers are misled into purchasing choices that do not have this effect, this stalls sustainable change and innovation, therefore contributing to the environmental crisis4. Also, UK consumers are aware of how difficult it is to accurately identify a more sustainable option, which could also demotivate people trying to reduce the environmental impact of their consumption5.
It’s not only the ‘ general public’ who are at risk of being misled: businesses and organisations who are trying to reduce their own emissions and invest in sustainable options could be confused by the language used by value chain partners, or energy suppliers.
Types of greenwashing
Planet Tracker identified six different kinds of greenwashing, all with the aim of misleading.
- Greenlabelling – using green wording to suggest a product or service is sustainable, when it is not, for example describing something as ‘natural’, ‘environmentally-friendly’, and other similar wording. An example of this is when an organisation refers to a product or service as ‘carbon neutral’ when the overall company does produce significant emissions.
- Greenhushing – when reporting on environmental performance, an organisation might under report or make it difficult to find their sustainability data.
- Greencrowding – becoming involved with certain pledges, or groups of companies who are taking more actions, to benefit from association with these activities, without making changes themselves.
- Greenlighting – focusing on a more sustainable aspect of a product or service to distract from less sustainable features. A claim against HSBC was upheld by the ASA when the bank ran advertisements focusing on supporting clients towards Net Zero, and running projects that planted trees for carbon capture, without disclosing the significant investments continuing to go towards businesses who contribute substantially to greenhouse gas emissions.
- Greenrinsing – moving targets before the original date they were meant to be achieved by, and increasing the ambition of them to distract from this, a technique used around product recyclability targets by major soft drinks companies.
- Greenshifting – suggesting consumer choice alone has the most responsibility for environmental crises, and that the organisation is only meeting the customer demand that exists. This is a less-used approach since high profile cases of major oil and gas companies were called out for attempting to use this technique6.
How to avoid greenwashing
- Be specific and clear – the Green Claims Code was established to provide more guidance – the checklist can be accessed here.
- Ensure you understand your own overall environment performance – to communicate accurately, it is vital that you have a strong understanding of the impact of your products and services, and that this is shared with, and understood by, those who have marketing responsibilities.
- Work towards an accreditation – working towards, and gaining, an external accreditation such as with Investors in the Environment, can ensure you have a strong understanding of your environmental performance, and how to improve this, so you can report and communicate your activities accurately to internal and external stakeholders.
- Upskill staff – Additional training for specific members of staff to build knowledge around sustainability can further support accurate communication efforts, such as through the iiE Green Champion Course.
- Account for your supply chain – it is important to be aware of how sustainable the sourcing of original materials may be. Sometimes this information can be elusive, so be careful not to make generalised statements about a product if they cannot be applied to its whole lifecycle. For those closer within your value chain, ask about their sustainability credentials and environmental policy, or if they have any external accreditations.
- Understand your renewable tariff – If you are currently on, or considering switching to, a renewable energy tariff, and unsure on where the energy company’s supply is coming from, you can request a fuel mix disclosure, which shows the ratio of renewable energy to other sources.
More information
Check out our recent webinar on promoting your sustainability achievements with confidence below.
This article was submitted by Hannah Smith, Sustainability Advisor at iiE.
References
- WWF Guide to Greenwashing | WWF
- Do consumers care about sustainability & ESG claims? | McKinsey
- https://committees.parliament.uk/publications/42703/documents/212154/default/
- Global Financial Stability Report, October 2021 (imf.org)
- Sustainability Headlines – March 2021: Brands Need to Simplify Sustainability – RedC Research & Marketing
- Greenwashing-Hydra-3.pdf (planet-tracker.org)
- Green Claims Code – Get Your Green Claims Right – Green Claims Code
