In an attempt to attract customers and investors and to build a better corporate image, companies tend to lean on ‘greenwashing’. The Oxford Dictionary defines Greenwashing as ‘Disinformation disseminated by an organisation, etc., to present an environmentally responsible public image; a public image of environmental responsibility promulgates by or for an organisation, etc., but perceived as being unfounded or intentionally misleading’. Greenwashing as a concept, first came into light in 1983. This was when Jay Westerveld first got the idea for the term while on a research trip. Commercials in early and mid-1980-s about their environmental bonafides by companies like Chevron, and even earlier so, claims made by Westinghouse’s nuclear power divisions about its nuclear plants in late 1960s contributed to the evolution of the term ‘Greenwashing’. Consumer demand for sustainable products has increased substantially over time as self-awareness towards our environment has come to the forefront.
Drivers of Greenwashing
As discussed above, the number of consumers who tend to choose green products over other options is substantially increasing. This is a global trend. A rise in environmentally friendly consumer behaviour motivates the companies to market their products as sustainable even when they are not. Another factor could be the growth of the organic industry and the rise in sales of products labelled as environmentally friendly. This is observed to be the case regardless of the state of the economy.
Organisations Beware of Greenwashing
Companies need to be as green as they claim to be hence, making sure all claims are specific and clear. Being specific in product descriptions and company processes reduces the chances of greenwashing. Marketing and compliance staff need to be in sync always to ensure that what’s implemented within the organisation is exactly what’s being communicated to the customers. However, being environmentally friendly in its production process is not enough.
A company needs to ensure that the way a product reaches a customer from its source justifies it being an eco-friendly organisation. Moreover, an organisation claiming to be green needs to ensure that all its vendors and suppliers meet a certain standard. They should be sensitive towards the environment in their activities. Organisations can schedule regular audits to ensure constant compliance against standards, for example ISO 14001, which is an international standard for environmental management.
Consumers Avoid Greenwashing
Consumers must look beyond the green advertising claims to avoid getting ‘greenwashed’. It is advisable to research more about the product or service they are consuming. There is a need to educate ourselves about companies’ green performance. Ideally, an organisation that has sustainability as a part of its core values and mission is the one investing money in practising eco-friendly measures and systems. Also, fake or made-up eco-labels have been found on products. These labels can easily be verified for their validity on the internet. Moreover, correct information will be supported on the companies’ websites with relevant evidence in most cases to demonstrate credibility.
Effects of Greenwashing on the Consumer and the Company
Consumers can fall victim to misleading marketing and advertising techniques adapted by organisations. They can end up buying products/services that they otherwise wouldn’t necessarily have. In worst case scenarios, greenwashed products might also be a threat to our health. For example, many cleaning products claim to be ‘natural’ or ‘organic’. They can instead contain harmful chemicals that might not be conveyed to the customers. Consumers that are trying to make an effort to conserve the environment might feel discouraged and let down by a company’s greenwashing techniques. Amid these types of marketing campaigns, many businesses side-line the harms they are causing to the environment and natural surroundings. Greenwashing attempts have a negative impact on the reputation of the organisation as well.
Recent Examples of Greenwashing
Ben & Jerry’s states its mission is ‘making world a better place’. Yet, 10 out of 11 samples recently tested positive for roundup (glyphosate and AMPA) herbicide contamination. Glyphosate-based herbicides (GBH) pose relatively minimal risk to a few selected species of crops and animals. However, they are considered toxic when it comes to current human safety standards and are now classified as carcinogen. GBHs have a toxic effect on other non-target plants, invertebrates, animals and micro-organisms when sprayed on crops to prevent weeds. Over the last few years, there has been evidence found that the company has been using cheap factory farmed milk from cows raised on GMO feed, instead of organic milk, to cut costs.
Walmart revealed its sustainability campaign in 2005. The company claimed to reduce greenhouse gas emissions from its global supply chain and commit to renewable energy. However, according to a research conducted by the Institute of Local Self Reliance in 2012, it was claimed that the company was deriving only 2% of its electricity in the U.S. from its solar and wind projects. America’s largest retailer was also selling misleadingly labelled ‘biodegradable’ and ‘compostable’ plastic products, which was in violation of the California law. Walmart’s greenwashing attempts costed them $1 million to settle the claims.
Volkswagen acknowledged the claim that they have been fitting cars with a software specifically designed to give false readings in emission tests a couple of years ago. The company was accused of installing ‘defeat devices’ in their automobiles in 1973-74 too. The accusation was made by the U.S. Environmental Protection Agency in early 1970s . The company was found guilty of emissions that were almost as high as 40 times the official estimations. Defeat devices were found in more than 10 million VW cars worldwide including approximately 500,000 in the U.S. As a result of years of greenwashing, VW had to face substantial legal and economic implications and a setback to their reputation.
Conclusion: Sustainability is the Key
When an individual decides to consume a product, they consciously put their trust in the company. Therefore, companies should avoid deceiving their customers through dishonest marketing. It is also an offence to communicate a misleading message to the customers. Businesses making efforts to improve their social and environmental performance must do so by implementing them through all functions of the company. Such organisations will then be able to communicate the impact of their efforts in a manner that the consumer clearly understands and appreciates. Including stakeholders’ perspective and considering their guidance while making a decision in this front could prove to be impactful in effective communication.