Section 10.1: Corporate governance and sustainability
Section 10.2: Sustainability reporting
Section 10.3: Global reporting initiative (GRI)
Section 10.4: Evaluation of sustainability performance
10.5.1: Introduction to Greenwashing
Over the past decade, companies have come to acknowledge that addressing and communicating sustainability is good for business. The rise in corporate communication of sustainability efforts has been largely due to the growth in consumer demand for products made and delivered through sustainable practices.
Studies have shown, however, that while demand and attitudes towards sustainable products is high, global trust in business has eroded over time, and people are less trustful about all sources of information about companies. From a business standpoint this is a reflection of ineffective marketing and corporate communication.
When taken to the extreme, ineffective marketing and communication about sustainability can lead to greenwashing.
What is Greenwashing?
The term greenwashing was an adaptation of “whitewashing”. Centuries ago, the term “whitewash” was used to describe a house painted in cheap white paint to cover up dirt and crack and give it a clean, uniform appearance. More recently, the term “whitewash” has been used as a metaphor in many settings (e.g. politics) and also in business to mean that something has been glossed over to cover up crimes, scandals, vices by giving a biased representation of data.
More recently, the term “greenwashing” was modeled on this concept, and used to describe the PR spin that companies put on their sustainability efforts. Greenwashing refers to a claim which is unfounded, unsubstantiated, misleading, or inflated claim about a company’s environmental and social credentials. It refers to deliberate action(s) or inaction(s) undertaken by a company to intentionally mislead consumers regarding its environments and social practices, or the environmental and social benefits of its products and services to appear more environmentally sustainable than they really are.
Greenwashing claims can be made about specific individuals, organizations, and products; and can be found in advertising material, public relations media, as well as on packaging.
Advertising and marketing plays a big part in greenwashing, as do other forms of corporate messaging such as eco-labels. Advertising claims can have a big influence on consumer purchasing choices. But when products are found to be less green than claimed, it can undermine consumer confidence in green claims. Consumers may no longer know which sustainability claims to believe.
The greenwash actions of a few irresponsible companies can put “green consumerism” at risk. The more companies are seen to practice greenwashing, the less likely customers are to trust environmental-related claims in general, and the more likely it is that regulators are to step in and impose tighter restrictions.
Greenwashing can have potential knock-on effects that negatively impact the objectives of the honest circle of companies striving to operate on environmentally sustainable business principles.
Why Greenwash?
Greenwashing usually occurs when there is a gap between the public perception of a firm’s corporate sustainability and the reality of its operations. In short, these firms may communicate positive sustainability actions to the public, but have poor actual sustainability performance.
These gaps can stem from a number of sources. The following tabs elaborate on some of the key reasons for corporate greenwashing.
Company culture
A business that adopts a very lean and lax compliance culture on regulatory issues is likely to take a narrow approach towards addressing and communicating its environmental concerns. The development of such corporate culture may lead to potentially misleading claims that only encompass legal and regulatory criteria, without due consideration for public and media sentiment and opinion. What may be regarded as diligent environmental action by the company, may in-fact be received as “green fluff” by its stakeholders.
Competitiveness for market advantage
Many companies recognize green consumerism as an opportunity to gain a competitive advantage – and it can be, if it is done the right way and with evidence. However, as they struggle to differentiate their products from those of their peers in an increasingly competitive market, they are often tempted to exaggerate or lie about a product’s environmental attributes. The likelihood is that these statements would not have the necessary evidence to back them, are likely to make them fall foul of the scrutiny of NGOs, journalists, and green groups that are increasingly skeptical of corporate environmental claims.
Misunderstandings and misinterpretations
Some misleading claims are made by a company because of an ignorance of legislation, or a lack of understanding of what is expected of them. Many companies willingly undertake what NGOs and environmental experts deem a necessary green initiative, such as attaining an environmental management standard such as ISO140001. Upon attainment, management may view it as a significant achievement deserving of a PR push, when in fact it is pretty standard requirement in recent times. This may lead to consumers brushing them off as culprits of “fluffing” their environmental performance.
Over-enthusiasm in reporting
Some companies may regard sustainability seriously, but in their enthusiasm – they may make mistakes. Individuals are proud of what they achieve and the companies they work for, and this can lead to exaggerations, or a reluctance to include errors, or to communicate the challenges they have faced. A lack of patience can also be a problem in environmental performance reporting effectiveness. In their eagerness to publicize their successes, businesses can sometimes jump the gun before all the evidence backing up their claims are in place. This can hinder and negatively impact what might actually a positive accolade for the company.
11.4.2: The 7 Sins of Greenwashing
Between 2007 and 2009, TerraChoice Environmental Marketing Inc. initiated a market study to describe, understand and quantify the growing problem of corporate greenwashing. Based on its analyses of over 1,018 consumer products with 1,753 environmental claims, it identified seven common types of greenwashing within market.
Explore the sections below to learn more about each of these.
1) Sin of Fibbing
The Sin of Fibbing is committed by making environmental claims that are simply false. In the research, only a few products were found to commit the Sin of Fibbing. Most of these were misuse or misrepresentation of certification by an independent authority.
Product Examples:
– Several shampoos that claimed to be “certified organic”, but for which our research could find no such certification.
– A caulking product that claims to be “Energy Star” registered, but the official Energy Star website suggests otherwise.
– A dishwasher detergent that claims to be packaged in “100% recycled paper”, and yet the container is plastic.
2) Sin of the Hidden Trade-off
The Sin of the Hidden Trade-off is committed by suggesting a product is “green” based on a single environmental attribute (ie. recycled content of paper), or a very narrow set of attributes (recycled content and chlorine free bleaching) without paying attention to other more important, environmental issues (ie. energy use , global warming, water use, and forestry impacts of paper). Such claims are not usually false, but are used to paint a “greener” picture of the product than a more complete environmental analysis would support.
Product Examples:
– Paper (including household tissue, paper towel, and copy paper) and lumber products (such as framing products and plywood) that promote their recycled content or sustainable harvesting practices without attention to manufacturing impacts such as air emissions, water emissions, and global warming impacts.
– Office technology (printers, copiers, fax machines) that promote energy efficiency without attention to hazardous material content, indoor air quality, or compatibility with recycled paper or re-manufactured toner cartridges.
3) Sin of No Proof
Any environmental claim that cannot be substantiated by easily accessible supporting information, or by a reliable third-party certification, commits the “Sin of No Proof”.
Product Examples:
– Household lamps and lights that promote their energy efficiency without any supporting evidence or certification.
– Personal care products (such as shampoos and conditioners) that claim not to have been tested on animals, but offer no evidence or certification of this claim.
– Facial tissues and paper towels that claim postconsumer recycled content without providing evidence.
4) Sin of Vagueness
The Sin of Vagueness is committed by environmental claims that too broad or so poorly defined that its real meaning is likely to be misunderstood by the intended consumer. Some notable themes of vague claims include:
– “Chemical-free”. In fact, nothing is free of chemicals. Water is a chemical. All plants, animals, and humans are made of chemicals as are all of our products.
– “Non-toxic”. Everything is toxic in sufficient dosage. Water, oxygen, and salt are all potentially hazardous.
– “All Natural”. Arsenic is natural. So are uranium, mercury, and formaldehyde. All of which are poisonous.
– “Green”, “Environmentally friendly”, and “Eco-conscious”, which are meaningless without further information or elaboration.
Product Examples:
– Garden insecticides promoted as “chemical free”.
– “All Natural” hair mousse.
– Kitchen paper that claims “recycled content” but does not quantify how much
– General purpose household cleaners that claim to be “non-toxic” without explanation or third party verification.
– “100% natural” bathroom cleaners.
5) Sin of Irrelevance
The Sin of Irrelevance is committed by making an environmental claim that may be truthful but is unimportant and unhelpful for consumers seeking environmentally preferable products. It is irrelevant and therefore distracts the consumer from finding a truly greener option. The most frequent example of an irrelevant claim relates to chlorofluorocarbons (CFCs) – a principal contributor to ozone depletion. Since CFCs have been legally banned for almost 30 years, there are no products that are manufactured with it. Nevertheless, we found many individual products that presented CFC-free claims as an apparently unique environmental advantage.
6) Sin of the Lesser of Two Evils
These are “green” claims that may be true within the product category, but risk distracting the consumer from the greater environmental impacts of the category as a whole. Some examples include organic cigarettes and “green” insecticides and herbicides.
A claim is seen to commit the Sin of Lesser of Two Evils when environmental qualifiers such as “organic” or “green” are placed on products in which the entire product category is of questionable environmental value.
7) The Sin of Worshiping False Labels
The Sin of Worshipping False Labels is committed by a product that uses self-created labels, verifications and logos that gives the impression of third party endorsement where no such endorsement actually exists. An example of this would be the inclusion of a company sanctioned label designed to mimic a recognized certification or eco-label.
Supplementary Resources
Strait Times (2008) “Are you being greenwashed”
Pearce (2014) “Monitoring Corporate Behavior: Greening or Merely Greenwash?”
UCLA Inst. of the Environment and Sustainability (2014) “Corporate Responsibility or Greenwashing?”
Corporate Sustainability Management 