What is greenwashing and can we avoid it?
Greenwashing has been happening under our noses ever since environmental concerns became a public concern, with some going as far as to say that it is one of the main drivers for global inaction on environmental issues.
As a PR and marketing practice used by almost everyone, its under-the-radar effect is more powerful than what most people think since it’s public opinion and narratives that ultimately drive investment and decision-making. In this case, it is our planet that is paying the price.
In this article, we answer some of the common questions around greenwashing and ultimately go on to conclude that it is only a natural consequence of the modern world.
- What is greenwashing?
- What are the characteristics of greenwashing?
- Why is greenwashing used by organisations?
- When did greenwashing start?
- What companies greenwash?
- Are REGOs an example of greenwashing?
- Are carbon credits an example of greenwashing?
- How can you spot greenwashing?
What is greenwashing?
Greenwashing is the public relations and marketing practice of deceptively persuading the public and/or consumers that the practices, policies or products of an organisation are environmentally friendly or “green”.
Essentially, this is done to appeal to climate-conscious individuals or groups who are aware that climate action is necessary to avoid catastrophic climate change.
What are the characteristics of greenwashing?
These Seven Sins of Greenwashing succinctly summarise the typical attributes of greenwashed communications:
- Hidden Trade-Off: When a communication only shows a narrow set of attributes to make a case for good environmental standards without taking into account the entire picture. For example, “green” paper can be truthfully made from wood “sourced from sustainable forestry” but at the same time dump untreated toxic chemicals into a river.
- No Proof: When communication doesn’t show reliable proof for its environmental claims. For example, some companies claim to be net-zero by offsetting their emissions using low-quality carbon credits where appropriate due diligence on the projects has not been made. Using blockchain technology as a “source of truth” could ultimately solve this issue by replacing trust with verifiability.
- Vagueness: The use of vague vocabulary is another typical greenwashing strategy. For example, many products use “made from natural ingredients” without defining what “natural” means in the particular context. Both naturally-occurring radioactive Uranium and honey are natural products.
- False Labels: The use of misleading symbology or language in labels to obfuscate the message of a label. Examples include changing the logo to include trees, adding the word “green” or “eco”, and even including dubious but realistically-looking environmental certifications.
- Irrelevance: This is when correct but irrelevant statements are made as part of communication. For example, adding “Free of CFCs” (which were globally banned many decades ago) or labelling products like tomatoes as “non-GMO” when genetically engineered varieties are not even available.
- Lesser of two evils: This is when a comparison is drawn with another environmentally unfriendly product/organisation/practice to show a perceived environmental improvement when in fact, it is globally still not climate positive. An example of this is cars that are “fuel efficient” or use “greener fuels”, which still emit significant greenhouse gasses.
Why is greenwashing used by organisations?
Greenwashing is used by organisations because it allows them to appeal to the public/consumers without having to waste any more resources than required.
Without clear regulation on how organisations must declare their environmental credentials, factual information can be easily manipulated for the purposes of greenwashing, especially since many of the processes and structures for all things are complex and, therefore, easy to obfuscate or manipulate.
For example, Drax power station’s supply chain includes forestry projects all over North America, and the public must take their environmental credentials to their word or that of the verifying third parties.
In recent decades, public perception of environmental and social injustices has increased, and branding has changed as a result, with organisations that maintain a positive image doing better than their competition (i.e. companies sell more if the public believes their products are “responsibly sourced”, “carbon neutral“, “sustainable”, etc).
This is especially the case with younger people, with global studies pointing out that 70% of GenZ shoppers prefer to buy from companies perceived as ethical, and 73% of millennials spend more on brands that appear sustainable.
When did greenwashing start?
The term first came into existence in a 1986 essay by environmentalist Jay Westerfield who criticised his hotel for asking guests to reuse their towels to “save the environment” while the hotel was expanding its site, which would clearly affect the surrounding reefs and environment.
However, the practice dates back to at least Victorian times when authors like Thomas Hardy popularised and romanticised the concept of the great British countryside against the backdrop of the industrial revolution, making the narrative for environmental benefits positive.
What companies greenwash?
Virtually all companies and businesses in the world, as well as governments and even individuals, can be blamed for greenwashing.
When a friend told me it was OK to chop down a few ancient trees because “the real problem is in the Amazon”, this is technically both irrelevant and has no proof when compared to the seven sins of greenwashing.
On the other hand, in public companies, it is the management’s legal responsibility to create value for shareholders, and as we have seen here, greenwashing is an excellent way of doing this.
Here are some examples from this interesting article by Earth.org:
- Volkswagen: During the famous 2015 scandal, the german car manufacturer was forced to admit to having cheated in its emissions test, which wrongfully showed their cars were less polluting than they actually were. In reality, NOx gas emissions were 40 times more than what VW had declared.
- BP: As global awareness of climate change started picking up, BP re-branded from British Petroleum to “Beyond Petroleum”, with renowned energy analyst Antonia Juhasz famously noting that BP’s 4% green tech budget hardly qualified as a significant change warranting a rebrand into a green-tech company.
- Nestlé: The swiss multinational is the largest industrial food and beverage company in the world, and in 2018 set goals for being plastic-free in its packaging by 2025. However, most critics like Greenpeace accused its plan of lacking any clear targets, timeline or any help to facilitate recycling globally.
Are REGOs an example of greenwashing?
There are claims that Renewable Energy Guarantees of Origin (REGOs) that are awarded to renewable energy generators by Ofgem are being used for greenwashing by exploiting loopholes within the complex system.
One of these loopholes involves the energy generation entities using the renewable energy they have produced for an in-house process while simultaneously issuing and selling the REGOs to commercial energy suppliers – essentially double counting it.
Often, energy-generating companies and energy suppliers are owned by the same parent company (see our energy glossary for the distinction), which means that they can easily coordinate to exploit these legal loopholes.
Are carbon credits an example of greenwashing?
As we have seen, the issue with man-made systems is that they often turn a really good idea in theory into a really bad one in practice.
Creating complex systems that only a few people know how to use naturally leads to manipulation and therefore greenwashing.
Carbon credits in the voluntary carbon market can be of high quality (such as those in the strict Verra registries), or a total sham, as some are certified by poorly-known third parties which do little to no due diligence.
There have even been instances where carbon credits were originating from “ghost” projects that were no longer saving carbon, showing the lack of an adequate structure to make this amazing financial incentive system work.
How can you spot greenwashing?
This is essentially impossible, as most regulation is flawed, third-party companies are difficult to verify, and greenwashing is profitable.
Unless you are a subject expert, it is virtually impossible to verify if the claims of a particular company, organisation or other entity are entirely true.
Understanding this is key to knowing that the main action from an environmental standing is to simply follow the simple triple R-rule of: Reduce, Re-use, Recycle.
Reducing consumption in all areas of life and business reduces the overall environmental footprint in almost all cases.
Reusing and maximising the life of any possession is both cheaper and environmentally friendlier in almost all cases too.
And if you cannot do any of the above, recycling things is the next best thing. This includes taking clothes and furniture to local charity shops and sorting out recycling at home. All organic matter can be turned into soil amendments by composting, which is certainly not rocket science and dramatically reduces emissions.