What is greenwashing?

Greenwashing occurs when a company pretends to be environmentally friendly for marketing purposes, but in reality does not make any noticeable effort on sustainability.

Companies can greenwash even when they have good intentions. As a result of greenwashing, most consumers do not believe companies’ claims about their sustainability practices.

You have probably heard of greenwashing at least once in the business world. Whitewashing occurs when an organisation covers up or overlooks scandalous information by presenting a biased representation of the facts. But greenwashing is not as well known.

Greenwashing occurs when an organisation spends more time and money on promoting itself as environmentally friendly than on minimising its environmental impact. It is a deceptive marketing ploy intended to mislead consumers who prefer to buy goods and services from environmentally friendly brands.

How does greenwashing work?

Companies, businesses and even governments spend a lot of money to appear greener to the public. While many environmental claims are legitimate, greenwashing occurs when claims are false or are presented in a dubious or misleading way.

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 more important negative factors. The bad outweighs the good promoted, leaving the consumer with an unbalanced view of the environmental impact. Many companies claim that the paper content is recycled, but fail to take into account the negative effects of paper production, such as air and water pollution.

Some 26% of greenwashing occurs 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 offsetting schemes and call for stricter regulation.

Of the cases of greenwashing examined, 11% occur when companies make environmental claims that are too vague or too broad to be understood by consumers.

Four per cent of the greenwashing cases examined involve companies making claims that may sound good on the surface, but are ultimately meaningless. For example, advertisements sometimes claim that a product does not contain chlorofluorocarbons (CFCs), an ozone-depleting chemical compound found in refrigerants and propellants. Since CFCs have been banned for years, this claim is no longer relevant.

An estimated 1% of greenwashing cases are claims that are not only irrelevant, but have questionable ecological significance to begin with. For example, green pesticides are often marketed as better for the environment than traditional products. However, critics claim that it is generally better for consumers to reduce their use of the advertised product than to buy an environmentally friendly version.

Then there are the lies, companies making false claims about a product or falsely citing green certifications. This accounts for less than 1% of greenwashing cases.

Most of the time, greenwashing occurs because of a lack of knowledge. While sustainability continues to be an increasingly important topic of conversation in business, so too is the pressure to comply. This means that companies are increasingly willing to show off their sustainable credentials, even if they lack the environmental knowledge to put them into practice.

In recent years, some of the world’s largest companies have sought to rebrand and reposition themselves as green champions. On the high street, many household brands have switched to greener, more sustainable packaging.

How to identify greenwashing

Most of us are trying to be greener and for some that means looking for brands and companies that are environmentally friendly. But how do you check that companies really are as green as they say they are?

Greenwashing, i.e. labelling something as eco-friendly, green or sustainable when it is not, misleads consumers into thinking they are helping the planet by choosing these products.

1. False claims or vague language

The Advertising Standards Authority says this is the aspect it receives the most complaints about. And some companies have already been banned from advertising.

In 2019, the advertising regulator banned a Ryanair ad claiming to be Europe’s lowest emissions airline without sufficient evidence to back up the claim. And a Hyundai ad, which claimed that a car “cleans the air”, was also judged by the ASA to be misleading.

Ingredients in a product that are described as “natural”, “organic” or “environmentally friendly”, when only some of the ingredients can be described as such, can also fall into this category.

Sue Davies, head of Consumer Protection Policy at Which? says that, in general, customers should try to find a secondary, authoritative source of information to back up manufacturers’ claims.

“Think about the bigger picture. For example, can environmental claims made on a single-use plastic water bottle be taken seriously?”

2. Images of nature or “green” buzzwords.

Phrases such as “eco”, “sustainable” and “green” are commonly used by companies to make business appear environmentally conscious – but rarely refer to any scientific standards.

A website for HDS Group’s Amazing Cleaners, seen in July 2016, featured the claim “100% eco-friendly”. A complaint was upheld after it was found that the claim was made without any evidence or explanation.

An advert for Alpro almond milk was also banned for a misleading environmental claim. The ad claimed that the milk was “good for the planet” and called it a “recipe for a healthier planet”: “Your recipe for a healthier planet”. Alpro said customers would understand the ad’s slogan to mean that plant-based products had a lower environmental impact.

But while the ASA said it understood that the almonds used by Alpro did not come from areas where production could have a negative environmental impact, such claims need to be clearer.

In another example, Edward Bulmer Limited claimed in 2018 that its paint was “the most environmentally friendly paint on the market”. However, the Advertising Standards Authority held in 2019 that Edward Bulmer Limited (the company then producing and selling Edward Bulmer Paint) “had not provided evidence of certification of its paints, nor had it provided evidence to show that its paints scored more favourably in terms of their impact on the environment than other paints on the market.”

3. Concealment of information

Fashion brands can promote clothes made from “sustainable” fabrics, even though the rest of their clothing line is harmful to the environment.

For example, a company may claim to be environmentally friendly, but ignore the supply chain emissions from a foreign coal-fired factory used to make part of a product.

Other industries have fallen into the trap. As long ago as 2007, the ASA ruled against Shell for an advertisement implying that it used waste carbon dioxide to grow plants, when the regulator found that the amount used was only a small fraction of its emissions.

4. Beware of carbon offsetting

A government, company or individual can try to balance its own emissions by finding other ways to remove an equivalent amount of greenhouse gases from the atmosphere. The process is called carbon offsetting.

However, environmental groups argue that this is a way of side-stepping the problem rather than addressing the issue of actually reducing emissions.

David Barmes, an economist with campaign group Positive Money, says offsetting is the most popular form of greenwashing.

“It is riddled with fraud and allows companies to claim they are meeting emissions targets, while still throwing them up in the air. He adds: “The purpose of offsets is to allow these companies to continue to emit with impunity and to allow governments to claim that they are meeting targets

5. Check company ownership

Larger companies, or conglomerates, with a high environmental impact have often bought smaller brands to target environmentally conscious customers who might not otherwise have chosen to spend with them. Therefore, knowing who the ultimate owner of a company is, or who owns it, can be important if you want to know its full environmental impact.

Accountability and authenticity, according to Professor Eccles, are serious issues. The carbon emissions of an entire company, he says, should be like the calorie labels on a product, where “everyone pays attention to them, they are independently certified and they influence consumer decisions”.

Professor Kimberly Nicholas, professor of sustainability at Lund University in Sweden, told the BBC that the most effective action is for companies to commit to removing fossil fuels from every part of their supply chain: “Customers need to move their money away from all companies that produce or are linked to the financing of fossil fuels”. He said: “Without this, action is futile”.

6. Green products in a wider range

Some companies market environmentally beneficial products, but omit information on the impact of their other products.

The food company Quorn was banned from an advertisement on how to carbon-certify one of its products. The ASA said the ad did not make clear what the supposed reduction in carbon footprint was measured on, so viewers did not know what the reduction was based on.

Ms Davies, of Which?, says the lack of transparency is a key indicator that the company does not have a wholly positive environmental impact. “If you’re struggling to find environmental information about a product, brand or service, take it as a red flag,” she says.

“Companies that have something to hide – or don’t have good stories to tell – often make it difficult for consumers to check their green credentials,” he adds.

7. Is the product and its packaging recyclable?

The “recyclable” label on some plastic items can be used for products that are not easy to recycle.

In 2018, McDonald’s announced it was getting rid of single-use plastic straws in its restaurants, offering paper straws instead. But the following year, it was accused of greenwashing when it was revealed that the straws were not actually recyclable.

In 2019, the ASA said Ancol Pet Products was misleading customers by advertising dog waste bags as biodegradable, after it was found that they did not biodegrade at their most likely destination, landfill or incineration.

Examples of greenwashing:

There are many high-profile examples of reputable companies that have been caught greenwashing. Some of the most infamous are as follows.

McDonald’s ditched its plastic straws in all UK restaurants, claiming it was part of a major campaign to be “greener”. However, the restaurant was criticised because the thickness of its new paper straws makes them difficult to recycle and instead they are mostly deposited in general waste. The company that manufactures the straws told the BBC that they are “100% recyclable”, but that improvements to the facility are needed for this to be done properly. The fast food chain goes 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 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 had not released clear targets, a timetable to accompany its ambitions or additional efforts to help facilitate recycling by consumers. Greenpeace reacted to this by releasing its own statement, which said: “Nestlé’s statement on plastic packaging includes more of the same greenwash baby steps to address a crisis it helped create. In reality, it will not move the needle on reducing single-use plastics in any meaningful way, and sets an incredibly low standard as the world’s largest food and beverage company.” In the annual 2020 Break Free From Plastic 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 allegations of greenwashing. The ad, published in September 2019, claims that the budget airline is the most carbon efficient in Europe, claiming they have “the lowest carbon emissions of any major airline”. It is well known that flying is an incredibly carbon-intensive activity. That is why airlines are keen to promote their environmental efforts. However, Ryanair’s claim that it produces the lowest carbon emissions of any major airline in Europe is questionable. According to the Advertising Standards Authority (ASA), the claims made in the advert are misleading and cannot be legitimately supported. Apparently, data from 2011 was cited to support the airline’s claims. This has little comparative value in 2019. In addition, some well-known airlines did not appear in Ryanair’s comparison. Overall, Ryanair’s basis for their ‘lower emissions’ claim lacks a detailed analysis of how they reached this conclusion, with important information missing from the reports. Greenwashing, in this case, is the self-presentation of a company as the most carbon efficient in its field, without substantial evidence, while continuing to support environmentally unsustainable practices. An airline can create a competitive advantage by presenting itself as the least environmentally damaging in its field, allowing it to exploit an environmentally conscious consumer base under false pretences.

Volkswagen emissions claims – Its cars were sold with a software modification to diesel engines that detected when they were being tested and changed engine performance accordingly to improve environmental test results. Volkswagen admitted to cheating on emissions tests and had to recall and rectify more than eleven million cars. The scandal spread to other car manufacturers, such as BMW and Mercedes-Benz.

Why avoid greenwashing:

The best way to avoid greenwashing in your company is to encourage transparency, especially when it comes to the environmental benefits of your products or services. This means taking honest steps to operate more sustainably, setting achievable targets, tracking your progress and producing verifiable reports.

Sustainability software such as Sustain.Life is a great way to incorporate impact-oriented solutions into your organisation while avoiding greenwashing and providing financial benefits.

Before your company’s marketers claim to be sustainable or green, follow these steps:

1. Identify green and improvement initiatives. Whether your company is a sustainable fashion upstart or a product packaging giant, start by identifying the most readily achievable areas to reduce waste and what would otherwise end up in landfill, and switch parts of your product to recyclable content where possible. Although it takes effort to identify ways to operate more sustainably, the rewards are well worth it. More sustainable goods and services reduce overheads, risk, stakeholder and employee engagement, and open up new market opportunities.
2. Set realistic targets. While the adage “what gets measured gets managed” is true for sustainability reporting, it is essential to know your carbon emissions. Be realistic before making zero emissions claims. Too often, companies rely too heavily on carbon offsets, which can start to look like a form of greenwashing when used in place of mitigation efforts (learn why here).
3. Commit to transparency and accurate reporting. If you’re going to claim that your product is sustainable or environmentally friendly, back it up with honest evidence. Greenwashing often uses language, not numbers. Truly sustainable companies will have the data and metrics to back up their claims. Your customers will have more confidence in a green product that says “87.9% powered by renewable energy” than in lofty marketing that says “made with nature in mind.”
4. Let visibility and the market help you tell your story. If you have done the work to operate more sustainably and can demonstrate it, make it part of your marketing: share a glimpse of your practices and supply chain on your social media blog or share an annual sustainability report. Nothing builds stakeholder loyalty more than a company that stands behind its environmental claims.