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As climate change has become a big topic around the world, retail, hospitality and other businesses want to show us that they think about it too. That is why when you walk into shops or go online you might see lots of signs and labels about things being “eco-friendly”, “organic” or “sustainable”.
However, the International Consumer Protection and Enforcement Network recently analysed 500 websites and had reason to believe that in 42% of cases the claims were exaggerated, false or deceptive and could potentially qualify as unfair commercial practices under EU and UK rules. After a broader screening, the European Commission and national consumer authorities such as the Chartered Trading Standards Institute examined 344 seemingly dubious claims in more detail and found that:
- In more than half of the cases, the trader did not provide sufficient information for consumers to judge the claim’s accuracy.
- In 37% of cases, the claim included vague and general statements such as “conscious”, “eco-friendly”, “sustainable” which aimed to convey the unsubstantiated impression to consumers that a product had no negative impact on the environment.
- Moreover, in 59% of cases the trader had not provided easily accessible evidence to support its claim.
In September 2021 the Competition and Markets Authority (CMA) warned businesses they had until the New Year 2022 to make sure their environmental claims comply with the law and they launched the “Green Claims Code”. The Code is part of a wider awareness campaign which the CMA launched ahead of the COP26 climate change conference.
The Code contains the following key principles, largely based on existing UK consumer law, and includes no particular surprises but an interesting focus on the full life cycle of a product or service.
The principles are:
- They must be truthful and accurate. Businesses must live up to the claims they make about their products, services, brands and activities.
- They must be clear and unambiguous. The meaning a consumer is likely to take from a product’s messaging and the credentials of that product should match.
- They must not omit or hide important information. Claims must not prevent someone from making an informed choice because of the information they leave out.
- They must only make fair and meaningful comparisons. Any products compared should meet the same needs or be intended for the same purpose.
- They must consider the full life cycle of the product. When making claims, businesses must consider the total impact of a product or service.
- They must be substantiated. Businesses should be able to back up their claims with robust, credible and up-to-date evidence.
The CMA will decide in the coming months which sectors it will prioritise for the review of misleading sustainability and environmental claims. It stated that the areas of focus could “include industries where consumers appear most concerned about misleading claims, textiles and fashion, travel and transport, and fast-moving consumer goods, that is, food and beverages, beauty products and cleaning products”.
What is Greenwashing?
Greenwashing, thought to be a play on words from the word whitewashing, is the term used to describe the practice of companies launching adverts, campaigns, products etc. under the pretence that they are environmentally beneficial, often in contradiction to their environmental and sustainability record in general.
American electrical conglomerate Westinghouse’s nuclear power division was a greenwashing pioneer although the term greenwashing was not used at that time. Threatened by the 1960’s anti-nuclear movement, which raised questions about its safety and environmental impact, it fought back with a series of adverts proclaiming the cleanliness and safety of nuclear power plants.
One, featuring a photograph of a nuclear plant nestled by a pristine lake, proclaimed that, “We’re building nuclear power plants to give you more electricity”, and went on to say that nuclear plants were “odorless (sic) neat, clean, and safe”.
Some of these claims were true, in 1969, when Westinghouse nuclear plants were producing large amounts of cheap electricity with far less air pollution than competing coal plants. However, given that the adverts appeared after nuclear meltdowns had already occurred in Michigan and Idaho, the word “safe” was arguable. Westinghouse’s adverts also ignored concerns about the environmental impact of nuclear waste, which has continued to be a problem.
The term greenwashing itself was coined back in the 1980s. Jay Westerveld, an American Environmentalist, used the word in a paper he wrote in 1986 following an earlier research trip, where he had stopped off to surf in Fiji. Sneaking into one of the resorts to grab clean towels he had seen a notice asking customers to reuse their towels.
Westerveld noted the irony considering the hotel was focused on expansion at the time, with what looked like little regard for the surrounding natural area, “We’ll destroy the environment, but make sure you reuse your towel”. His essay was titled “It all comes out in the greenwash”. From then, the term continued to get used to describe a whole host of dubious or dishonest practices used by businesses to paint themselves in a greener shade.
How Does Greenwashing Work?
Corporations, businesses and even governments spend a lot of money to make themselves appear greener in the public eye. While many environmental claims are legitimate, it is considered greenwashing when the claims are false or presented in a dubious or deceptive manner.
The most common form of greenwashing accounts for 57% of cases. It occurs when a company makes a positive environmental claim about a product, but fails to mention larger negative factors. The bad outweighs the promoted good, leaving the consumer with an unbalanced view of the environmental impact. Many companies make claims about recycled paper content but don’t account for paper production’s negative effects such as air and water pollution.
About 26% of greenwashing cases happen when a company makes environmental claims that cannot be easily verified with data or through a third party. Some academics question the effectiveness of some carbon offset programmes and call for stricter regulations.
Of the examined greenwashing cases, 11% occur when companies make environmental claims that are too vague or too broad to be understood by consumers.
Four per cent of examined greenwashing cases include companies making claims that might sound good on the surface but are ultimately pointless. For example, advertisements will sometimes claim that a product is free of chlorofluorocarbons (CFCs), an ozone-depleting chemical compound once found in refrigerants and propellants. Because CFCs have been banned for years, this once significant claim no longer has relevancy.
Accounting for an estimated 1% of greenwashing cases are claims that are not only irrelevant but have questionable ecological significance to begin with. For example, environmentally friendly pesticides are often marketed as being better for the environment than traditional products. However, critics state that consumers are usually better off reducing the use of the advertised product than purchasing a green version.
Then there are outright lies, companies that make false claims about a product or falsely cite green certifications. These account for under 1% of greenwashing cases.
More often than not, greenwashing happens due to a lack of knowledge. While sustainability continues to become a more prominent topic of conversation in business, so does the pressure to comply. This means companies are increasingly keen to exhibit their sustainable credentials, even if they don’t have the environmental expertise to implement this.
In recent years, some of the world’s largest companies have attempted to rebrand and reposition themselves as green champions. While on the high street, plenty of household brands have made the change to packaging that looks and feels eco-friendlier and more sustainable.
What is Greenwashing in Business?
The lack of common definitions around environmental and social sustainability has resulted in growing concern about the pervasiveness of greenwashing in business. This is not only a problem in terms of undercutting positive actions, but also results in misleading information for both investors and consumers.
Data from the Investment Association found that 49% of the £9.4 trillion in UK assets were integrating Environmental, Social and Governance (ESG) in their investment processes in 2020, up from 37% in 2019. They stated that “While that’s a positive number, it is meaningless unless there is clarity and standardisation about what such ESG approaches mean”.
Chancellor Rishi Sunak has released a new roadmap, Greening Finance, for the UK’s Sustainability Disclosure Requirements (SDR), which will require that businesses disclose their environmental impact. Not only will this help build transparency in net zero alignment for corporates and investors, but it moves the UK financial system one step closer to evaluation of performance rather than a simple focus on targets.
The new requirements, which will apply to pension schemes, investment products and asset managers and owners, are part of the Government’s reforms to create a greener financial system and overcome that lack of transparency. There has been significant movement towards demanding comparable and robust sustainability data.
The Green Technical Advisory Group (GTAG) will oversee the Government’s delivery of a “Green Taxonomy”, a common framework setting the bar for investments that can be defined as environmentally sustainable. The Green Taxonomy will help clamp down on greenwashing, unsubstantiated or exaggerated claims that an investment is environmentally friendly and make it easier for investors and consumers to understand how a firm is impacting the environment.
What is Greenwashing in Fashion?
Campaigners like Greta Thunberg have talked about their anger when companies greenwash. She has said, “Many make it look as if the fashion industry is starting to take responsibility, spending fantasy amounts on campaigns portraying themselves as ‘sustainable’, ‘ethical’, ‘green’, ‘climate neutral’ or ‘fair’. But let’s be clear: this is almost never anything but pure greenwash.”
As the second most polluting industry, fast fashion is under pressure to reduce waste. High street brands have launched “clothes donation” schemes, offering vouchers for clothes collected to be recycled. During their launch week, H&M collected 1,000 tonnes of clothes. That amount of clothing would take 12 years to recycle and is produced by H&M in 48 hours. There’s no way recycling can keep up with the mad pace of fast fashion, and vouchers are a greenwashing tactic that only serves to fuel this overconsumption.
A study of the websites of 12 of the biggest British and European fashion brands, including Asos, H&M and Zara, has found that 60% of the environmental claims could be classed as “unsubstantiated” and “misleading”.
Published in June 2020 by the Changing Markets Foundation, the “Synthetics Anonymous” report assesses brands across the spheres of fast fashion, luxury fashion and online retailing based on their sustainability claims. The brands analysed are Asos, Boohoo, Forever 21, George at Asda, Gucci, H&M, Louis Vuitton, Marks & Spencer (M&S), Uniqlo, Walmart, Zalando and Zara.
Across all of these brands, 39% of products assessed came with sustainability-related claims such as “recycled”, “eco”, “low-impact” or simply “sustainable”. The Foundation assessed whether these claims stood up against the Competition and Markets Authority’s (CMA) new guidelines on avoiding greenwashing: 59% did not.
It is worth noting that the brands not found to be greenwashing were, most often, simply not making sustainability-related claims about their products, rather than being able to support claims for many products. Of the products assessed in the report, none from Boohoo, Forever 21, Uniqlo or Louis Vuitton came with a sustainability claim. In terms of making claims that usually aligned with the CMA principles, Zara and Gucci ranked best.
Synthetics are of particular concern to the Foundation and other bodies working on sustainable fashion as they are mostly used in textile blends, for which no recycling solutions exist at scale. The Ellen MacArthur Foundation states that “less than 1% of the material used to produce clothing is recycled into new clothing”.
When used in blends or as mono-materials, whether these are recycled or not, synthetics also contribute to microplastic pollution in water every time they are washed. Half a million tonnes of microfibres are estimated to enter the ocean annually from fashion. Moreover, synthetic materials bear a significant climate footprint. The Changing Markets Foundation’s report revealed that virgin polyester production is now generating 700 million tonnes of CO2e every year, as much as 180 coal-fired power plants.
What is Greenwashing in Marketing?
Greenwashing has been used in marketing as a way to make products more appealing to customers who care about the environment. The demand for “eco-friendly” products and services is booming. According to one recent survey by the World Wildlife Fund (WWF), online searches for “sustainable” goods have increased by 71% since 2016. This has translated into growing pressure throughout supply chains for organisations to demonstrate “green” credentials. Many companies are now actively reporting their “environmental impact” and committing to long-term goals like “carbon neutrality” through their marketing and advertising activities.
There have, however, been a range of marketing missteps, including the use of slightly vague or poorly defined terms or claims that are unsubstantiated, for example:
- In 2019, L’Oréal found itself in hot water for describing its range as “vegan”, referring to a lack of animal-derived ingredients. Activists derided the brand for continuing to carry out testing on animals in markets such as China. Veganism, they said, should mean no animals were exploited at all.
- In 2020, the Advertising Standards Authority (ASA) received 32 complaints for a TV ad from Quorn that failed to clarify or provide further evidence for the claim its Thai Wondergrains pot “helps us reduce our carbon footprint”. The complaint was upheld, although Quorn said it had Carbon Footprint Reduction certification from the Carbon Trust.
Marketing and advertising regulatory bodies are taking a harder line on greenwashing, as the ASA says itself, “one of our most persuasive sanctions is bad publicity”. This is one strong reason that should give any brand contemplating a little light greenwashing in its marketing, pause for thought. Marketers that can’t verify the claims, should be very careful about making them no matter how tempting the feel-good halo of green associations may be.
There is general public cynicism about marketing and advertising. That lack of trust is borne out by recent research carried out by YouGov. Around half of those surveyed in the UK said they agreed both that “I prefer brands that are sustainable” but also “brands will slap anything on a label to make money”. This leaves marketers in a bit of a quandary as they have a public that wants a particular type of product or service, but that is also very sceptical about the claims that marketers make.
Examples of Greenwashing
There are many high-profile examples of renowned businesses who have been found to be greenwashing. Some of the most infamous include the following.
- McDonald’s ditched its plastic straws in all UK restaurants, saying it was part of a big drive to be “greener”. But the restaurant was criticised because the thickness of its new paper straws means it is difficult for them to be recycled and they are mostly put in general waste instead. The company that makes the straws told the BBC that they are “100% recyclable”, but that there do need to be better facilities for this to be done properly. The fast-food chain gets through 1.8 million straws every day in the UK and said it is working hard to find a solution to make its straws better for the environment.
- In 2018, Nestlé released a statement saying that it had “ambitions” for its packaging to be 100% recyclable or reusable by 2025. However, environmental groups and other critics pointed out that the company hadn’t released clear targets, a timeline to accompany its ambitions or additional efforts to help facilitate recycling by consumers. Greenpeace reacted to this by releasing its own statement, in which it said, “Nestlé’s statement on plastic packaging includes more of the same greenwashing baby steps to tackle a crisis it helped to create. It will not actually move the needle toward the reduction of single-use plastics in a meaningful way, and sets an incredibly low standard as the largest food and beverage company in the world.” In Break Free From Plastic’s 2020 annual report, Nestlé, along with Coca-Cola and PepsiCo, were named the world’s top plastic polluters for the third year in a row.
- In February 2020, a Ryanair advert was banned by a UK watchdog over claims of greenwashing. The advert, released in September 2019, claims that the budget airline is most carbon efficient in Europe, asserting that they have “the lowest carbon emissions of any major airline”. It is well-known that flying is an incredibly carbon-intensive activity. Therefore, airlines will be determined to promote their environment-friendly endeavours. However, Ryanair’s claim that it produces the lowest carbon emissions amongst all major airlines in Europe is questionable. According to the Advertising Standards Authority (ASA), claims made in the advert are misleading and could not be legitimately backed up. Reportedly, data from as far back as 2011 was cited in support of the airline’s claims. This holds little comparative value in 2019. Moreover, some well-known airlines did not appear in Ryanair’s comparison. In general, Ryanair’s basis for their “lowest emissions” claim lacks detailed analysis of how they came to this conclusion, with important information missing from reports. Greenwashing, in this instance, is a company’s self-presentation as the most carbon efficient in its field without substantial evidence, whilst it continues to endorse un-environmentally sustainable practices. An airline may create a competitive advantage by presenting itself as the least environmentally damaging in its field, enabling it to exploit an environmentally conscious consumer base under false pretences.
- Volkswagen emissions claims – Their cars were sold with a software modification in the diesel engines which detected when they were being tested and changed the engine performance accordingly to improve environmental test results. Volkswagen admitted cheating emissions tests and had to recall and rectify over eleven million cars. The scandal went on to encompass other carmakers including BMW and Mercedes-Benz.
Other more general examples of greenwashing include:
- The “zero emissions cars” – Virtually every car manufacturer praises the environmental credentials of its electric, hybrid, or particularly fuel-efficient model in terms of greenhouse gas emissions. These companies “forget” to report the rarely green origins of the electricity that recharges the batteries, the problems of recycling the very polluting lithium-ion batteries, and there are even scandals of cheating on pollution tests and other “improved” figures and data.
- Green computing or green IT – New technologies in general and IT in particular, are a major ally of the environment. They allow saving paper, reducing CO2 emissions by allowing online and remote work, etc. Therefore, many tech companies announce technology as being the planet’s holy grail, which is a bit greenwashing. Why? Because tech components make up the tech devices and these components are made of rare Earth minerals whose exploration by mining activities is very ecologically harmful.
- Greenpeace highlight carbon offsetting as greenwashing with the following statement: “Offsetting has become the most popular and sophisticated form of greenwash around. It could work in theory, but in practice, it’s riddled with flaws.”
- A product is labelled 50% more recycled content than before, but the manufacturer only increased the recycled content from 2% to 3%. Although technically true, the message conveys the false impression that the product contains a sizeable amount of recycled content.
- A rubbish bag is labelled recyclable. However, rubbish bags are not usually separated from other rubbish at the landfill or incinerator, so they are highly unlikely to be used again for any purpose. The claim is deceptive since it asserts an environmental benefit where no meaningful benefit exists.
How Greenwashing can Harm a Brand’s Reputation
The biggest risk of damage to brands by greenwashing undoubtedly remains a reputational one. The public tends to be sceptical of green or social awareness claims. Companies can seriously damage their brands and sales if a green or social awareness claim is discovered to be false or contradicted by a company’s other products or practices.
For example, Audi declared that it was fighting the gender gap in a moving ad for the Super Bowl in 2017, but came in for a torrent of criticism when it was revealed that there were very few women in senior managerial roles at the company. Audi had no women on its six-person executive team. Its supervisory board (the German equivalent to a board of directors) had only 16% women.
That was below the already-low average of 20% for female representation on corporate boards of Fortune 500 firms, and significantly lower than BMW’s 30%. The ad was meant to demonstrate to viewers that the German carmaker was committed to gender equality in the workplace. The ad backfired and damaged the brand.
Any company that adopts ethical values just to show an awakened conscience in appearance only, designed to improve its reputation, without genuinely honouring the values promoted, is in danger of doing often irreputable harm to its brand.
As many as 75% of teenagers say they would choose a brand because of its commitment to sustainability, regardless of the product or service that it is selling. These consumers will make up 40% of the market by 2024; duping these socially aware, digitally savvy purchasers has risks and consequences.
When an environmental or social cause is adopted by a company purely to gain favour with a particular section of the public concerned about that issue, the risk is obvious because in a hyperconnected world where it is not hard to find and share information, the truth tends to come out in the end.
There are now numerous cases of big brands being publicly named and shamed for co-opting environmental or social causes simply to bolster their image. Sometimes these accusations can result in genuine crises with serious damage to credibility and reputation.
In 2017, Pepsi launched a TV and web ad starring the model Kendall Jenner. The unlikely plot saw the celebrity tasked with appeasing a street demonstration by giving out cans of the cola to protestors. It was an attempt by the brand to tap into the zeitgeist by appropriating the issue of social justice. But it turned out to be an epic fail.
Its approach to the complex and delicate issues of activism and ethical engagement were seen as too superficial, exploitative and downright incoherent with the firm’s status as a major multinational. Among the most critical voices was that of Bernice King, daughter of Martin Luther King Junior. She took to social media, “If only Daddy would have known about the power of #Pepsi” she wrote in a sarcastic tweet that was quickly shared around the world. Under a barrage of criticism, Pepsi withdrew the ad within 24 hours and publicly apologised saying, “Pepsi was trying to project a global message of unity, peace and understanding. Clearly, we missed the mark and we apologise.” It is now almost impossible to find any trace of this campaign online.
In 2018, for the World Cup in Russia, Mastercard announced that it would be donating 10,000 meals to poor children for every goal scored by Messi or Neymar. But the campaign was a disaster. Associating the opulent world of football with hunger brought condemnation from around the globe and damage to the brand.
The Difference Between Green Marketing and Greenwashing
Companies and brands tread a fine line between green marketing and greenwashing. Green marketing involves companies promoting their products or services in a way that showcases their eco-friendliness. Greenwashing refers to an abuse of green marketing; it occurs when a company makes claims about its environmental sustainability and social responsibility, but is not able to back these up with measurable data and evidence of real change.
Green marketing is typically practised by companies that are committed to sustainable development and corporate social responsibility. Businesses are making an effort to implement sustainable business practices. They recognise they can make their products and services more attractive to consumers, while also reducing expenses in, for example, packaging, transportation, energy and water usage. Also, businesses are increasingly discovering that demonstrating a high level of social responsibility can increase brand loyalty among socially conscious consumers.
Authenticity is essential in green marketing and it can be a very powerful marketing strategy when it is done right. For green marketing to be successful, it has to fit with the brand. Having a single green product when the rest of the products are not, for instance, can make customers wonder about the brand’s environmental commitment.
How to Avoid Greenwashing
Greenwashing works best when people don’t notice it, or at least keep quiet about it. Is there anything we can do to stop it? There is no specific law banning greenwashing in the UK, but there are several legal ways of challenging it.
Advertising watchdogs such as the ASA have the power to remove ads if they deem them to be misleading, and consumer law also offers some redress to consumers who feel they have been sold something based on misleading claims.
How to avoid greenwashing as a consumer:
- Look beyond the buzzwords – Look for actual evidence that backs up any claims that a business is sustainable or eco. Certifications such as Fair Trade or B Corporation can make it easier for you to spot a legitimately eco-friendly business.
- Do your research – This may sound difficult to do but actually it isn’t, if a brand is genuinely doing their bit to be eco-friendly. It never does any harm to ask a brand if you are not sure about their eco credentials, or check out the B Corporation Directory.
- Use your common sense – For example, do you really think shipping water from Fiji could be sustainable?
- Make sure claims are verified by a third party – Without third-party independent research, testing and certification, environmental claims are without credence. Check the website or label to see if a trusted third-party organisation has verified the brand’s claims.
- Be wary of buying super cheap – We have to understand that buying sustainable products and taking the sustainable approach is unfortunately more expensive at the moment, but that may change as more people buy green.
- Natural isn’t always more eco-friendly – Natural materials such as viscose, rayon and bamboo are promoted as eco-friendly, but it depends on how they’re sourced. For example, 150 million trees are cut down for viscose production every year. Viscose is responsible for deforestation, unless it comes from a certified source. Meanwhile, bamboo is a fast-growing fibre but it is sometimes grown using pesticides, and chemicals are often used when it is turned into fabric.
How to avoid greenwashing as a marketer:
- Be wary of vague, meaningless language – Marketing messages that say nothing specific and have no fixed meaning, for example “eco-friendly” or “kind to the environment”, or words or terms that do not provide facts or back up claims should be avoided.
- The misuse of pretty pictures – Images of wheat fields or rain forests may be a savvy marketing ploy, but those images can also manage to distract from or misinform about a company’s true environmental impact. Only use symbols, pictograms or labels that support your claim, and that don’t give a false impression about the product or service’s features, for example by using trees or the colour green.
- New and improved launches – If you are publicising a product as the new and improved replacement for one that was obviously eco-unfriendly, make sure it doesn’t possess the same, problematic properties, or even worse ones.
- Using fake or meaningless green certification – The marketing world is littered with all kinds of bogus labels and certifications from third parties denoting that a business is green by using often questionable, ethically murky standards and benchmarks. If you are using green certification make sure it is from a reputable source.
- Don’t lie by omission – Be sure to showcase the good and the bad. Avoiding the negative is the same thing as lying about it.
- Abide by the regulations set by, for example, the Advertising Standards Authority (ASA).
How to avoid greenwashing as a business:
- Be wary of having green products but a dirty company – Make sure that if your business claims to be green in its philosophy or mission that it really is green behind closed doors as well. In other words, a company might stamp an “eco-friendly” label on its consumer product, while the factory producing the product is riddled with questionable practices that fly in the face of its green claims.
- Be transparent – A business needs to be able to back up its claims through transparent, substantiated data.
- Make it crystal clear what sustainability benefit your product has – Be specific. Do not use jargon or misleading language. Don’t give the impression that a product, its components or packaging are more sustainable than it really is. Don’t exaggerate – be sure to represent the green qualities of your products or business as they realistically exist, not as you want them to be.
- Credentials denote authenticity – Having sustainability credentials from a reputable source will not only enable you to back your claims, but will also make it easier for consumers to choose your brand over the competition.
- Avoid harmful products – Greening a product that’s still harmful, such as “healthier” cigarettes, might not be the best idea.
- Abide by the regulations set by, for example, the Competition and Markets Authority (CMA).
The common practice of greenwashing means that it is important that consumers do their research and ask questions before buying if they are concerned about sustainability and ethical practices. Younger generations are clearly prioritising eco-friendly and impactful brands, while moving away from or even boycotting those that are not striving to make a difference.
If businesses do business with other eco-friendly businesses, and encourage their customers to do the same, they will help to perpetuate the philosophy and business practices of going green without the need to greenwash. They will benefit from growing consumer loyalty, bolstered trust, and a greener footprint on the planet.