The Sneaky Tricks Companies Use to Greenwash You

Greenwashing is the process of conveying a false impression or misleading information about how a company’s products are environmentally sound. It is a way for companies to take advantage of the growing demand for environmentally sound products, without making meaningful changes to their practices or reducing their environmental impact. Greenwashing can be harmful because it can deceive consumers into buying products that are not eco-friendly and divert attention from the real environmental issues that need to be addressed.

How and Why Greenwashing is Done?

Some examples of how greenwashing is done are:

• Changing the name or label of a product to evoke the natural environment, such as using words like “green”, “natural”, or “eco-friendly”, or using images of nature, animals, or plants, even if the product contains harmful chemicals or has a high carbon footprint.
• Making vague or unsubstantiated claims about the environmental benefits of a product, such as “biodegradable”, “recyclable”, or “carbon neutral”, without providing any evidence or details on how these claims are verified or measured.
• Emphasizing a small or insignificant aspect of a product that is sustainable, while ignoring or hiding the larger or more harmful aspects of the product or the company’s operations, such as using recycled packaging for a product that is made of non-renewable resources or contributes to deforestation.
• Portraying a company or an industry as environmentally friendly or socially responsible, through advertising, public relations, or corporate social responsibility initiatives, while continuing or expanding their polluting or harmful activities, such as fossil fuel companies promoting their investments in renewable energy or carbon capture, while increasing their oil and gas production.

The rise of greenwashing can be seen as a response to the increasing consumer awareness and demand for environmentally sound products, as well as the growing environmental, social, and governance (ESG) investing movement, which evaluates companies based on their environmental, social, and ethical performance, in addition to their financial performance. Some companies may engage in greenwashing to attract or retain customers, investors, or stakeholders, who are looking for more sustainable options, or to avoid regulation or criticism from environmental groups or the public. However, greenwashing can also backfire, as consumers may become more skeptical or distrustful of green claims or expose the companies to legal action or reputational damage, if their greenwashing is exposed or challenged.

What are different types and techniques of Greenwashing?

There are different types and techniques of greenwashing, which can be classified into the following categories:

• Renaming, rebranding, or repackaging: This technique involves changing the name, logo, or packaging of a product or company to make it appear more eco-friendly, without changing its actual content or practices. For example, a company may use words like “green”, “natural”, or “eco-friendly” in its name or label, or use images of nature, animals, or plants, even if the product contains harmful chemicals or has a high carbon footprint.
• Environmental imagery: This technique involves using visual elements that evoke the natural environment, such as green colors, leaves, flowers, or landscapes, to create a positive association with the product or company, regardless of its actual environmental impact. For example, a gas-guzzling car or truck may be pictured in a remote natural setting, or a housing development may be named for a natural feature that it has destroyed, such as "Conifer Lane".
• Misleading labels or claims: This technique involves making vague, general, or unsubstantiated claims about the environmental benefits or impacts of a product or company, without providing any evidence or details on how these claims are verified or measured. For example, a product may be described as being “biodegradable”, “recyclable”, or “carbon neutral”, without specifying the conditions, standards, or methods used to determine these attributes.
• Hiding trade-offs or negative aspects: This technique involves emphasizing a small or insignificant aspect of a product or company that is sustainable, while ignoring or hiding the larger or more harmful aspects of the product or company’s operations. For example, a company may use recycled packaging for a product that is made of non-renewable resources or contributes to deforestation, or a company may donate a small fraction of its profits to an environmental cause, while continuing or expanding its polluting or harmful activities.
• False or fabricated data: This technique involves using data that is inaccurate, incomplete, or manipulated to support the environmental claims or image of a product or company, or to discredit the environmental performance of competitors or alternatives. For example, a company may fabricate data or fund research to produce misleading data that improves its image, or a company may cherry-pick or omit data that does not fit its narrative.
• Greenlighting or greenhushing: These techniques involve using communications and marketing to either highlight or downplay the environmental aspects of a product or company, depending on the context and audience. For example, a company may greenlight its environmental features or initiatives to attract or retain customers, investors, or stakeholders, who are looking for more sustainable options, or to avoid regulation or criticism from environmental groups or the public. Alternatively, a company may greenhush its environmental features or initiatives to avoid scrutiny or backlash from customers, investors, or stakeholders, who are not interested in or opposed to sustainability, or to avoid raising expectations or standards that it cannot meet.
• Greenrinsing or greenshifting: These techniques involve modifying or shifting the environmental goals or responsibilities of a product or company, either internally or externally. For example, a company may greenrinse its environmental, social, and governance (ESG) targets before they have been achieved, thus avoiding being held accountable and never actually achieving its goals. Alternatively, a company may greenshift the blame or burden of environmental action to the consumers or the society, implying that they are the ones who need to change their behavior or preferences, while absolving itself of any responsibility or accountability.

Case studies of Greenwashing

Some case studies of greenwashing by different industries or companies:

• Hotel industry: Some hotels claim to be eco-friendly by offering guests the option to reuse their towels or sheets, or by using green logos or images. However, these practices may have little or no environmental benefit, and may mask the larger environmental impacts of the hotels, such as water and energy consumption, waste generation, or carbon emissions. A study found that only 16% of the hotels that claimed to be green had any third-party certification or verification of their environmental performance.
• Energy sector: Some fossil fuel companies engage in greenwashing by portraying themselves as environmentally friendly or socially responsible, through advertising, public relations, or corporate social responsibility initiatives. For example, some companies promote their investments in renewable energy or carbon capture, while increasing their oil and gas production. A report found that the top 20 fossil fuel companies spent over $1 billion on climate-related branding and lobbying since the Paris Agreement, while expanding their fossil fuel operations.
• Fashion industry: Some fashion brands use greenwashing to appeal to the growing demand for sustainable clothing, by using terms like “organic”, “recycled”, or “ethical”, or by launching eco-friendly collections or campaigns. However, these claims may be vague, unsubstantiated, or irrelevant, and may conceal the larger environmental and social impacts of the fashion industry, such as water and chemical pollution, textile waste, or labor exploitation. A report found that 59% of the fashion brands surveyed did not have any policies to ensure living wages for their workers, and 75% did not publish their carbon footprint.

To avoid greenwashing, companies should be transparent and accountable about their environmental claims and performance and seek credible and independent verification or certification of their sustainability credentials. Consumers, investors, and regulators should also be aware of the signs and techniques of greenwashing and look for reliable and transparent sources of information and verification when evaluating the environmental claims or performance of a product or company.

Recommendations

Greenwashing can have negative impacts on consumers, investors, regulators, and the environment, as it can erode trust, hamper action, and divert attention from the real issues. Therefore, it is important to prevent or reduce greenwashing and promote genuine environmental sustainability and accountability. Here are some recommendations or solutions to do so:

• Assess and measure your company’s energy use and emissions. You should understand your company’s scope 1, 2 and 3 emissions, which are the direct and indirect emissions from your operations, electricity consumption, and value chain. You should also know your data center’s location, as different regions have different sources of electricity and carbon intensity. By measuring your environmental impact, you can identify areas for improvement and set realistic sustainability goals.
• Change practices to reduce carbon emissions and waste. You should implement actions that can help you reduce your environmental impact, such as using renewable energy, improving energy efficiency, reducing water consumption, minimizing packaging, recycling materials, and sourcing from sustainable suppliers. You should also avoid practices that can increase your environmental impact, such as using harmful chemicals, exploiting natural resources, or violating human rights.
• Impose an internal cost on the carbon you generate. You should assign a monetary value to the carbon emissions you produce, and use it to incentivize or penalize your business units, employees, or suppliers based on their environmental performance. This can help you internalize the external costs of your environmental impact, and motivate you to reduce your emissions and invest in low-carbon solutions.
• Be transparent and accountable about your environmental claims and performance. You should provide clear, accurate, and verifiable information about the environmental benefits or impacts of your products or services, and avoid making vague, general, or unsubstantiated claims. You should also seek credible and independent verification or certification of your sustainability credentials, such as the EU Sustainable Finance Taxonomy, or the Gold Standard. You should also report your progress and challenges in achieving your sustainability goals, and disclose any trade-offs or negative aspects of your operations.
• Educate and engage your stakeholders on sustainability issues and solutions. You should raise awareness among your customers, employees, investors, and regulators about the importance of sustainability, and how your products or services can help them make more sustainable choices. You should also provide them with information and tools to verify your environmental claims, and encourage them to provide feedback or suggestions on how to improve your sustainability performance. You should also collaborate with other organizations, such as NGOs, academia, or industry associations, to share best practices and advocate for green policies and standards.

The role of green marketing, green certification, green regulation, green education, and green activism in promoting environmental sustainability and accountability are:

• Green marketing: Green marketing is the practice of promoting products or services that are sustainable and eco-friendly. It can help raise awareness about environmental issues and encourage consumers to make more sustainable choices. It can also help differentiate a company from its competitors and appeal to consumers who are increasingly seeking out environmentally responsible products and services.
• Green certification: Green certification is the process of verifying or certifying the environmental claims or performance of a product, service, or company by a credible and independent third party. It can help prevent or reduce greenwashing by providing evidence and details on how the environmental claims are verified or measured. It can also help consumers, investors, and regulators to identify and trust the genuine environmental benefits or impacts of a product, service, or company.
• Green regulation: Green regulation is the set of rules or standards that govern the environmental aspects of a product, service, or company. It can help prevent or reduce greenwashing by defining what constitutes as green or sustainable, and by imposing penalties or sanctions for false or misleading environmental claims. It can also help create a level playing field and incentivize companies to adopt more sustainable practices and products.
• Green education: Green education is the process of providing or acquiring knowledge, skills, and values related to environmental sustainability. It can help prevent or reduce greenwashing by fostering a culture of environmental awareness and responsibility among consumers, employees, investors, and regulators. It can also help stimulate the development of new, more sustainable products and technologies, and contribute to the long-term health and well-being of the planet and all of its inhabitants.
• Green activism: Green activism is the practice of taking action or advocating for environmental causes or issues. It can help prevent or reduce greenwashing by exposing or challenging false or misleading environmental claims, and by demanding more transparency and accountability from companies. It can also help drive positive change and pressure companies, governments, and other stakeholders to take more ambitious and effective actions to address environmental problems.

Thanks for Reading 🙏

Connect with Author on LinkedIn 

Follow FinGlimpse on Twitter, Instagram, LinkedIn, Flipboard, WhatsApp, Telegram