Greenwashing in a nutshell
‘Greenwashing refers to a deceptive practice in which a company makes misleading and unclear claims about the sustainability of its products, or services with a view to building a good reputation under the current public pressure on climate change.’
Greenwashing refers to a deceptive practice in which a company makes false claims about the sustainability of its products, or services to mislead consumers and other stakeholders, without taking any responsible action. Greenwashing often involves the use of misleading language, unsubstantiated claims, selective information disclosure, and green imagery.
According to some academic sources, greenwashing also draws on the concept of deceptive marketing in which the brand deliberately misleads its consumers for organisational goals and profit. Simply speaking, greenwashing is not about being dishonest in environmental practices, it involves intentional attempts to deceive people and regulatory authorities.
But why do companies greenwash their communications?
1. Consumers are concerned about climate change and business’s impacts on the environment
80% of people from 50 different countries have raised their concerns about the climate change crisis, and 76% have already adopted a more sustainable lifestyle such as buying green goods, bringing their bags to grocery stores, etc and most of them expect their favourite brands to do the same by offering sustainable products and services.
Without a doubt, this massive change in consumer value has put huge pressure on businesses out there, leading them to make really bad decisions by doing greenwashing in their communications. As consumers’ environmental concerns may impact their buying decisions and make them more inclined towards sustainability-focused products, it then becomes a gold mine for greedy and irresponsible corporations.
2. Consumers love sustainability but don’t know much about it
This is a topic that I have mentioned in a previous blog about ‘Sustainable Marketing‘ (read more to understand the current context of greenwashing in sustainable marketing). Consumers are increasingly aware of the importance of using sustainable, eco-friendly products, but at the moment only around 26% of them are doing so. This problem stems from their lack of knowledge and information.
As a result, this knowledge gap becomes a fertile ground for greenwashing, where brands exploit ambiguous claims that sound good but lack concrete meaning such as ‘green’, ‘natural’, or ‘organic’. Currently, there have been many claims on biodegradable or recyclable characteristics of the products that fail to mention crucial aspects like the origin of materials or their end-of-life disposal. Yet, this lack of transparency still allows brands to influence purchasing decisions through feel-good language without providing the information necessary for informed choices.
3. Pressure from stakeholders to become ‘Sustainable’
The emergence of green non-governmental organizations (NGOs) and other sustainability-focused stakeholders has undeniably propelled corporate sustainability communication to the forefront. These organisations utilise reports, and campaigns to pressure companies towards transparency and sustainable action. While this pressure fosters a sense of urgency and encourages companies to communicate their green efforts, it also lays a strong foundation for greenwashing. We all know that businesses are afraid of being criticised publicly and become willing to exaggerate or misrepresent their sustainability achievements.
Read more about ‘Sustainable Marketing’: What is Sustainable Marketing? Definition, 4Ps Strategy, Trends & Challenges
How have regulators controlled greenwashing?
Several regulatory bodies are actively tackling greenwashing, with the Advertising Standards Authority (ASA) in the UK being a prominent example. Recently, ASA has developed a guideline on how to avoid misleading environmental claims and social responsibility, defining key factors in communicating sustainability-focused messages such as accuracy, transparency, substantiation, etc.
Besides, if detected using false and deceptive claims, brands may damage their reputation as the ASA has imposed various sanctions to ensure the guidelines should be followed:
- Brands will be required to withdraw or modify the message in the ads.
- Public warnings will be issued so that consumers are aware of greenwashing.
The European Commission’s proposed update to the Unfair Commercial Practices Directive (UCPD) has presented a serious attempt by the EU Government to control greenwashing. There are many practices included in the proposal to protect consumers against greedy and careless corporations, such as providing a clear definition of a misleading environmental claim and prohibiting this practice, requiring companies to back up their claims with statistical evidence and proven data, etc.
In 2022, the UK’s Competitions and Markets Authority introduced a Green Claims Checklist providing details on what green and sustainable messages should include (see Figure below). While not legally enforceable, it helps businesses avoid misleading consumers and potential issues.
Is Greenwashing illegal?
To conclude, greenwashing is unethical and unacceptable by most regulatory bodies. However, since there is no legal definition of greenwashing and environmental claims are regulated and guided differently between these associations, the term ‘greenwashing’ may not be explicitly illegal.
Yet, companies have to be aware that engaging in practices that involve making false and misleading environmental claims still violates regulations and might lead to legal and brand damage consequences.
Examples of Greenwashing Accusation
1. Greenwashing in Fast Fashion: The Case of H&M
The fast fashion industry is a prime example of where greenwashing tactics are implicitly employed. In Spring 2019, H&M’s Conscious Collection was introduced with a line of clothing and accessories which are promoted as being sustainable and eco-friendly through the use of recycled materials and organic cotton.
However, the collection has been subject to criticism and the brand was accused of doing greenwashing for controversial reasons. Some criticised that the collection just represents a tiny proportion of H&M’s offerings, which means that the brand has not yet committed to a more sustainable future. Moreover, critics believe that H&M is not transparent enough in providing clear information and statistical evidence to support its vague claims such as ‘eco-friendly’, or ‘organic cotton’.
In general, whether the global fast fashion brand has employed greenwashing in its communications or not remains a debatable topic. It’s important to note that H&M has also taken some positive steps towards sustainability, such as investing in renewable energy and increasing the use of recycled materials.
2. Greenwashing in automobiles: a good lesson from Ford
Recently, ASA has investigated Ford’s ‘Zero-emissions driving’ claim for its latest All-electric Explorer model as critics raise concerns about the possible misleading meaning of the message. Before that, the ASA banned similar adverts from other car manufacturers, including BMW and MG for their vague green claims.
Specifically, Ford argued that the brand has used the clear term ‘driving’, focusing on the drive experience which releases no carbon emission, not the entire product lifecycle. While the ASA ultimately cleared the ad due to the specific context of “while driving” in the claim, the case underscores the potential for ambiguity and the importance of transparency in communicating green messages.
How to avoid greenwashing in sustainable marketing
1. Understand consumers’ needs and make them aware of sustainable habits
The increasing consumer demand for sustainable products and services has provided marketers with new opportunities to create competitive advantages by building a reputation for sustainability.
Market research can help brands understand how consumers perceive sustainability, as well as their intent to consume green products. As a result, this allows companies to tailor their messaging and offerings accordingly. Moreover, educational marketing campaigns should be initially prioritised to empower consumers to make informed choices and integrate sustainable practices into their lifestyles. By going beyond product promotion and fostering behavioural change, companies can build trust and transparently show their commitment to sustainability.
2. Transparency is key – Don’t abuse sound-good language
Avoiding greenwashing requires transparency and the avoidance of misleading language. As I have mentioned above, general words and terms such as ‘green’, ‘eco-friendly’, ‘organic’, … should not be employed without any clear statistics and evidence.
Businesses are facing the temptation of misusing false claims about their environmental impacts due to the lack of knowledge among consumers. It is reported that only 3% of consumers can tell the difference between authentic green companies and dishonest ones. Yet, on average, 6 out of 10 don’t believe in what the brands say about their green practices and say they only trust in verification given by public authorities and third-party organisations.
3. Sustainability comes from changes in the entire value chain
Being sustainable does not come from consumption only, it should result from a responsible and sustainable product lifecycle and value chain. Hence, I believe that rather than celebrating a small success by conveying vague and likely misleading messages to the public, companies should move beyond these superficial changes by addressing climate change and prospering social communities holistically.
This may include collaboration with suppliers and partners who share similar values, or continuous investment in innovation to improve efficiency and reduce environmental impact throughout the product lifecycle.
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Academic Sources for this blog:
Markham, D., Khare, A., and Beckman, T. (2014) GREENWASHING: A PROPOSAL TO RESTRICT ITS SPREAD. Journal of Environmental Assessment Policy and Management, 16(4), pp. 1-16.
Hamill, A. (2023) Confronting the knotty reality of sustainability communications. WARC. [online]. Available at: https://www.warc.com/content/article/warc-exclusive/confronting-the-knotty-reality-of-sustainability-communications/en-gb/152168.
Sy Chu
As an analytical and creative marketing enthusiast skilled in customer analysis, content research and brand management, my passion is help businesses gain insights into their brand and marketing strategies to drive impactful outcome to their success.