What is greenwashing and why does it matter to my business?

Published: Oct 05th, 2022

Updated: Apr 02nd, 2024

Greenwashing is the act of consciously, or unconsciously, misrepresenting products or services as eco-responsible – what is the effect on your business, consumer and planet?

In the hydro-electric wave of environmental consciousness which has surged through society over the last few decades, terms like ‘sustainable’ and ‘eco-friendly’ have become common catchwords for industries as diverse as aviation and toothbrushes. Against this background, there has been a steep rise in the misuse or exaggeration of environmental terms, a trend known as “Greenwashing”.

What is Greenwashing?

Greenwashing is the act of consciously, or unconsciously, misrepresenting products or services as environmentally responsible. The witty portmanteau – which combines “green” with “whitewashing” – was coined back in 1986 by the American ecologist Jay Westerveld.

Noticing that hotels were increasingly displaying signs asking guests to conserve water and energy by reusing their towels, Westerveld recognised that the same hotels showed little or no regard for the environment in their other practices. While parading under the banner of environmental consciousness, hotels were in fact saving themselves money on their energy bills.

What does Greenwashing look like?

Greenwashing may be all one colour, but it takes on many forms. Incidents can range from cases of statistical bias to outright falsification.

IOM3: How can industry communicate the progress they are making on targets such as reducing emissions or resource usage without falling foul of potential problems?

Not infrequently, Greenwashing is anchored in the truth. While a company might say that its new packaging is 50% more recyclable than previously, a container which was 1% recyclable to start with would now only be 1.5% recyclable. Similarly, a bin-bag manufacturer might describe its bin-bags as recyclable, yet it becomes clear upon reflection that the bin-bag will end up in landfill along with the non-recyclable rubbish inside it.

Some instances of Greenwashing are downright lies. In 2015, the scandal that would come to be known as ‘Dieselgate’ erupted, when it was revealed that car manufacturer Volkswagen had been using software to falsify its emission status. The company had fitted its cars with “defeat devices”, machinery designed to recognise when vehicles were being emissions tested and temporarily reduce emissions. While apparently adhering to US standards on diesel emissions, Volkswagen cars were in fact producing up to 40 times the allowed limit for nitrogen oxide pollutants.

Greenwashing also occurs where companies give misleading or unsubstantiated claims about their environmental commitment. In 2018, for example, Nestlé announced its intention to make its packaging 100% recyclable or reusable by 2025. The claim, however, was not supported by a clear or scientific plan of action. Similarly, a company which commits to planting ten new trees for each one it fells won’t be doing much to offset its environmental impact if it substitutes a tree cut down in the Amazonian rainforest with ten saplings in Woking.

Why do companies Greenwash?

With 73% of millennials saying that they would spend more on sustainable brands, and 70% of Gen Z   preferring to buy products from ethical companies, it’s little wonder that businesses are feeling the pressure to display environmental credentials. For some companies, the green-eyed monster of environmental envy has driven them to prioritise appearing eco-friendly over actually being so in their bid to outmatch their competitors.

In 2019, the sale of goods and services marketing themselves as ‘eco-friendly’ reached an all-time high of £41 billion. Businesses may decide to make false claims about their sustainability to attract consumers who would choose another brand if they understood the company’s true environmental impact. In 2018, the straw-free drinks lid advertised by Starbuck’s Coffee was shown to contain more plastic than the previous lid and straw combined. Fast-fashion brands such as Zara and H&M have also come under criticism for introducing sustainable collections which did no less damage to the environment than their other clothing ranges.

The term “greenwashing” itself seems to have first appeared back in the 1980s, at a time of major environmental disasters and climate science going mainstream. But it’s not until very recently that this practice has truly taken off. Growing public concerns about the state of nature and the climate have meant much more scrutiny on the environmental impacts of companies. And when boardrooms are faced with a choice between radically transforming the way they do business or just throwing some money at a new PR campaign, the latter option can be tempting.

Not all Greenwashing is quite so malicious. A company might find themselves unintentionally Greenwashing through a lack of research or through misunderstanding the significance of terms like ‘sustainable’ and ‘organic’. A product can only be understood as eco-friendly if it has been eco-friendly from raw material to finished product; yet businesses often fail to consider their product’s full life cycle and instead home in on the manufacturing process alone. With growing pressures to prove themselves sustainable, business often cut corners in their haste to meet environmental demands.

Why should your company avoid Greenwashing?

Greenwashing may signal a lack of ecological progress, but its impact on the environment isn’t neutral: falsely claiming to be eco-friendly can actively precipitate environmental harm by giving consumers an erroneous sense of sustainability. When people are sated by strawless cups and low-emission cars, they become reassured in their environmental impact and make fewer efforts to reduce their carbon footprint with products which are in fact sustainable. The vast share of society has a limited attention-span for environmental progress: this attention-span should be directed towards truly eco-friendly products and not expended on environmental imposters.

Aside from the environmental consequences, Greenwashing can also pose a direct threat to the health of your business. While there is currently no UK legislation specific to Greenwashing, recent years have seen a rapid development in provisions by both the government and consumer protection bodies. In Autumn 2021, the Competition and Markets Authority (CMA) released the Green Claims Code, a 13-point checklist of standards for businesses making environmental claims. Companies which fail to comply with these standards may be fined or forced to amend or remove their false claim. Greenwashing may also result in direct legal action from sector bodies such as the Trading Standards Service or the Advertising Standard Authority.

Companies engaging in Greenwashing to boost their consumer base run the risk of ultimately isolating buyers if their true environmental impact is revealed. In recent years, myriad aids have been developed to help consumers spot false claims to sustainability, such as a list of Greenwashing signs published by Good Housekeeping. Moreover, websites like Project Cece and Ethical Made Easy which are dedicated to helping buyers limit their purview to sustainable brand, redirect consumer attention from any companies with false environmental claims.

What can your business do to avoid Greenwashing?

As provisions tighten and consumers become more sceptical of environmental claims, it is important for businesses to ensure they avoid falling into the trap of Greenwashing.

Before making claims about the sustainability of a good or service, a business should familiarise itself with the entire life cycle of the product, from raw material to product disposal. On average, 92% of a company’s emissions are produced by activities related to that company rather than by the company itself. Building a sustainable supply network allows a company to be fully transparent about their sustainability without running the risk of deceit or exaggeration. To achieve an eco-friendly supply chain, businesses need to dedicate time to researching the environmental credentials of suppliers.

Vague language and insubstantial claims are another pitfall for companies hoping to attract eco-conscious consumers. As quick to the tongue as terms like ‘sustainable’ have become, it’s all too easy to utter them without appreciating their full implications. Businesses should be on guard against laying claim to environmental qualities without scientific evidence or standardised certifications. By being as clear and as scientific about sustainability, and by applying for nationally- and internationally-recognised certifications such as The Carbon Trust Standard, a business can avoid unintentionally promoting products as environmentally responsible when they are not.

Finally, and perhaps most simply, companies should keep up to date on the tactics they can employ to shrink their carbon footprint and reduce their impact on the environment. A construction company, for example, might turn to materials with low embodied energy such as timber, which lasts longer and emits less carbon during production than many other building materials. Through energy-saving practices, adopting sustainable materials, and producing recyclable products, businesses can ensure that they are less greenwashed, more genuinely eco-friendly.

For more information about Sapience’s dedication to sustainability, have a look at our website or contact us directly.

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