Greenwashing was a term coined by environmentalist Jay Westerveld in 1986, in an essay criticising the irony of the “save the towel” movement in hotels at the time. He noticed the vast amount of waste he had come across throughout the rest of the hotel, where there were no visible signs of efforts being made to become more sustainable. He said that instead, the hotel was simply trying to reduce costs by not having to wash towels as much but while trying to market it as being eco-friendly.
It goes down to the act of a company attempting to trick consumers who are looking to live a greener lifestyle into thinking their products are social & environmentally friendly, when they are not. So basically, it is pretty much a lie!
There are many creative ways companies are using to mislead their consumers. Here are some types of greenwashing marketing techniques:
- A fashion brand promoting clothes that are made of a 'sustainable' fabric, even if the rest of their clothing line is damaging to the environment.
- Ingredients in a product being described as 'natural' or 'organic', when only some of the ingredients can be described as 'natural' or 'organic'.
- Offering to carbon offset their products, without committing to any big changes immediately.
- Packaging that is coloured green or which is decorated with flowers and plants may make it look less harmful than it is.
- Having an eco-friendly version of their product, but not making all their products eco-friendly.
- Claiming to be sustainable but not taking that into consideration in their supply chain.
But why do companies engage in greenwashing? It’s simple: being seen as ethical drives profitability. A report by McKinsey found that Gen Z (people born roughly between 1996 and 2010) are more likely to spend money on companies and brands seen to be ethical. Another, Nielson’s Global Corporate Sustainability Report, found that 66% of consumers would spend more on a product if it comes from a sustainable brand, and that jumps to 73% among millennials. Therefore, companies have a financial incentive to be more socially conscious, or at least appear to.
However, another reason that companies engage in greenwashing is far less insidious – they simply don’t know that they’re doing it. Many companies just don’t have the expertise to know what is truly environmentally beneficial, and what isn’t. This is why it’s so important for companies to do meaningful research on how to be sustainable and apply it to all stages of their operations, not only what consumers see.
This applies not only to SME, as one would think. Recent cases of industry giants being chased for greenwashing have been appearing in the news:
- A classic example is Volkswagen, who admitted to cheating emissions tests by fitting various vehicles with a “defect” device, software which could detect when it was undergoing an emissions test and altering the performance to reduce the emissions level.
- In 2018, Starbucks released a “straw-less lid,” as part of its sustainability drive, however this lid contained more plastic than the old lid and straw combination.
- The same year, McDonalds announced that they were going to get rid of single-use plastic straws in their restaurants and offer paper straws instead. However, they got accused of greenwashing, when it was revealed the straws weren't actually recyclable!
- Last month Fashion retailer H&M and sporting goods chain Decathlon have made commitments to the Netherlands Authority for Consumers and Markets (ACM) to remove sustainability-related labels from their products and websites, and to improve the use of sustainability claims in the future, following an investigation by the Dutch regulator.
- Unilever’s cleaning brand Persil is one of the UK’s most popular, with its washing-up liquid and dishwasher tablets used by millions of people each year and was challenged by the Advertising Standards Agency on unclear environmental claims.
So Greenwashing is essentially when a company or organisation spends more time and money on marketing themselves as being sustainable than on minimising their environmental impact. It aims to boost a company’s public image or make more sales by convincing us that buying from them aligns with our values. It is an environmentally friendly way that companies found to call idiots to their consumers’ faces! The good news is that consumers have now more access to information than ever, and therefore are more and more difficult to be cheated on! Looking green might sound irresistible, but the catch back, if you’re “not showing your true colours” can it you hard!
Have a great and impactful week!
Marta Lima
Executive in Residence @ CATÓLICA-LISBON
Executive Director Pacto para Gestão da Água
Center for Responsible Business & Leadership
This article refers to edition #162 of the "Have a Great and Impactful Week" Newsletter and covers SDG 9 and 12.
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