Greenwashing

Introduction

We are being ‘greenwashed’.

But have no fear. There is a solution for this phenomenon. And you are part of it.

Let us first understand what the term ‘greenwashing’ means.

You are in the supermarket buying groceries and other goods for your home. You see rows and rows of ‘organic’, ‘natural’, ‘cruelty-free’, ‘green’ products. For a moment, you wonder what that means. At the same time, you want to move ahead with the shopping. That prompts you to just pick up the product because the company has announced publicly that the product is good for you. Most of us are trusting. In this instance, at times, we as consumers are being taking for a ride. This is what ‘greenwashing’ essentially means.

Here, the companies make misleading claims about the environmental benefits of a product, service. This can also extend to its technology also. The practice of ‘greenwashing’ has come to the fore due to the growing demand for products that are eco-friendly. To the customer, this translates as products that are more natural, healthier, non-toxic, recyclable, recycled or upcycled. They also expect that the product is less wasteful of natural resources of the earth.

Companies also market themselves as organizations that follow Corporate Social Responsibility (CSR). Marketing strategy is formulated to highlight this to stakeholders thus creating a brand image. It has also been observed that such companies spend more on marketing campaigns rather than actually implementing ethical business practices. Over the years, this unethical practice has been carried out too far resulting in consumer mistrust.

This practice (also called ‘green sheen’) of companies misleading the consumer is rampant.  Here the consumer is made to believe that the goals of the company are pro-environment and so are their products. In todays’ world, where consumer awareness is (or should be)   high, this should not happen. Social and environmental accounting research highlights the fact that greenwashing strategies tantamount to deception.

History

The environmental movement gained momentum in the middle of the 1960s. This popularity prompted many companies to create a new green image through advertising. Jerry Mander, a former Madison Avenue advertising executive, called this new form of advertising "ecopornography."

The first Earth Day was held on April 22, 1970. This encouraged many industries to advertise themselves as being friendly to the environment. Public utilities spent 300 million dollars advertising themselves as clean green companies. This was eight times more than the money they spent on pollution reduction research.

In 1983, Jay Westerveld, an undergraduate student, first got the idea for the term greenwashing. On a research trip, he saw a note asking customers to pick up their towels at a resort. The note conveyed the message that the oceans and reefs are an important environmental resource, and that reusing the towels would reduce ecological damage. According to Westerveld, they also emphasized the statement ‘Help us to help our environment’. He noted that there was no or little effort towards reduction of energy waste by the resort.  On the contrary, the resort was trying to get the occupants to reuse towels for the purpose of reducing consumption of water and electricity. The term ‘greenwashing’ was coined in 1986. The term caught on in the media.

An essay by Westerveld’s came out a year after the launch of Chevron’s People Do campaign. Critics were quick to point out many of the environmental programs that Chevron promoted in its campaign were mandated by law. These programs were also relatively inexpensive in comparison with the cost of Chevron’s ad budget. Joshua Karliner, an environmental activist estimated that Chevron’s butterfly preserve cost it $5,000 per year to run. This is understandable in the context that the ads promoting it cost millions of dollars to produce and broadcast.

Corporates use ‘greenwashing’ as a means of creating a ‘trustworthy brand’. Ineffective regulations by the concerned government authorities add to the problem. In 1999, according to environmental activist organizations, the word "greenwashing" was added to the Oxford English Dictionary. In some instances, the definition of toxicity for certain substances are changed or name of the substance is changed. This was highlighted by environmental activist and author Barry Commoner. He phrased it as ‘linguistic detoxification’.

Why is greenwashing happening?

Many corporate structures use greenwashing as a way to improve brand image along with aiming for increased profits. Lack of stringent law enforcement by regulatory agencies do not help curb greenwashing. In fact, that exacerbates the issue while reducing the power of the consumers who demand more transparency in production processes. Companies adopt greenwashing in order to avoid evaluation by regulators. They also attempt to reduce pressure for changes stipulated by legal authorities. Through greenwashing, companies try to convince critics and non-government agencies that the company goals are pro-environment and well-intended.

Competition with market rivals is another reason why greenwashing is so prevalent. The actions taken by companies are aimed to expand market share. This, in general, works in situations where the rivals are not using the ploy of the malpractice. The company benefits since there is neither expenditure (on additional employees and research facilities) nor performance changes. The companies who engage in greenwashing aim to attract investors who are interested in ethically run organizations.

Information that is difficult to get

It is not easy to find out that a company spends more money on advertising that its products are green than its spending on good environment friendly practices. Most companies do not disclose in their annual reports or corporate social responsibility reports as to whom they are donating to, even when it is shareholders money.

Reference to environmental impact statements, reviews, audits, monitoring data and other information are often found in company reports. You may want to know further details. Ask for it. They might not want to part with ‘commercially sensitive’ information. In such cases, getting the right information can be ruled out unless one wants to go the lengthy legal way. Companies understand the hesitancy of a consumer in getting into a legal tangle with a corporate. They take advantage of this. Thus greenwashing goes on.

Companies are sometimes members of industry associations. It should be possible to find out this information along with data on their policies.

Companies go for greenwashing by way of changing the name or label to impress upon the consumer the environmental benefits of a product. A consumer usually cannot know the real reason behind the name or the label.

Consumers do not always have the knowledge of the exact ingredients in common terminology. Scientific terms do not convey the information that is required.

Companies use the tactic of using different terms (usually scientific) to give information on the ingredients that have gone into making the product. These terms confuse the customer and does not enable them to make a prudent purchase.

How to spot greenwashing

The environmental feature(s) or benefits should not be overrated, directly or by implication.

Genuine companies will be very clear about the beneficial features of their products.

Facts and details of a green products are displayed prominent and should be in plain language.

The company should specify whether the claims refer to the product or packaging or both.

While comparing their products to that of their rivals, companies should give sufficient substantiation.

‘Cherrypicking’ is a tactic that companies use to mislead the customer. Here they highlight only certain benefits of the product and ignore anything that is negative.

The consumer needs to be aware that the standards adopted for green products vary from country to country.

Other impediments

Companies can go the extra mile to avoid accountability to consumers. This can take the form of legal threats or even engaging with law enforcement to suppress queries. What is common in the context of greenwashing is for a company to launch an initiative or policy and do not make any attempt to fund. Public pressure can force companies to announce or take a pro-environment stance but do not hold on their promise as time goes by.

Examples and Solutions

Solutions to greenwashing is multi-pronged since there are many issues and several factors pertaining to each that have to be addressed. Some general discussions are highlighted here.

One of the biggest greenwashing that has been in prevalence is carbon tax. This is in addition to the greenwashing (one of them being that the emissions help in the growth of trees - which is only partially true). There is evidence to show that major oil corporations knew in the 1960s that carbon dioxide emissions beyond a certain level will destroy the ecosystem of the planet.

Carbon Tax is a controversial solution that has been discussed by almost all nations for many years. This is a topic for which everyone concerned – the individual, the corporate, the government, the environmentalist agencies – has a different approach. Since waiving off taxes by governments is the easiest strategy they can adopt, this regulation should not be supported. Besides, it does not cub carbon emissions since corporates will continue to be interested in making profits (as they are now) even at the cost of the environment.

One remembers the instance where a credit card company rewarded customers with carbon offsets as they continued using the card. Large emitters were given ‘free credits’. Here customers were made to believe that they were nullifying their carbon footprint. It is clear like daylight that only a tiny fraction of the purchase price goes into purchasing carbon offsets. The major part goes to the bank. This is not in spirit with the ideology.

Another area where greenwashing is ongoing in a big way is related to the plastic recycling industry. Plastic products – polypropylene, polyurethane etc – are being touted as recyclable. Some plastics like polyvinyl chloride, styrofoam are not recyclable. At times, it is not clear to the customer if the product or the packaging or both are recyclable. Customers have a responsibility to make themselves aware of advantages/disadvantages of a product/material. This will help them live in a healthy environment devoid of toxicity.

The other way of hoodwinking is done by companies who claim percentage of recyclable content in products. Though the percentage figures are big, the actual recycled content by weight might be negligible. The customer is tricked when the product is bought on the basis of the claim. Self-study, inquiry and discussions with friends/ family gives the customer the confidence to buy in a prudent manner.

Final Thoughts

Greenwashing has changed over the last 20 years, but it's certainly still around. As the world increasingly embraces the pursuit of greener practices, corporate actors face an influx of litigation surrounding misleading environmental claims.

According to Nielsen's Global Corporate Sustainability Report, sixty-six percent of consumers would spend more on a product if it comes from a sustainable brand, a figure that jumps to 72 percent among millennials.

Solutions to greenwashing are out there. This is material for another blog post. Until then...

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