30-second summary: Some organizations that rushed in their attempt to be considered an environment-friendly choice for consumers have faced the heat and are still recovering from the damage of being labeled as a company engaged in greenwashing. There is a lot that businesses can learn from these mistakes and avoid greenwashing practices through action, transparency, and effective communication with consumers.
With increasing consumer awareness and the expanding influence of green vigilantes, accountability is rising for businesses to report and advertise verifiable, traceable, and accurate information/facts/claims/promises regarding their environmental impact. In recent times, we have seen a number of companies across industries being called out for greenwashing. Let’s break it down and take a look at why this is happening and what can businesses do to avoid being labeled as deceiving organizations when it comes to their environmental impact and sustainability efforts.
As the concern for our survival and planetary well-being grows, it is becoming more and more important to look beyond commitments and intentions and analyze the actions and impact of promises being made by companies to contribute to the collective global mission of climate action. Apart from regulatory bodies and policymakers, we can also see an increasing number of concerned individuals, NGOs, and other organized groups actively voicing their environmental concerns. In the US, the SEC is going to enforce additional ESG regulations for investors, while in the UK Plastic Packaging Tax is all set to impact global supply chains worldwide.
This has resulted in companies trying different ways to brand themselves as responsible and ethical business entities – from packaging to marketing and advertising as well as sustainability performance reports. This is where it often gets complicated and the gaps between reality and projection become visible.
What is greenwashing?
In simple words, it is when an organization uses external communication to make its customers believe that its products/operations are environment-friendly without substantiating those claims with any actual facts or data that can be verified.
An example of this is the ‘premium green fare’ charged by some airlines which has been called out by customers as an illusion that their emissions have been dealt with, while there is no supporting data made available to verify that claim. Another example is the premium ‘eco-friendly collections’ launched by several fast fashion brands while they make no significant changes to their business model which is hazardous for the planet. While these initiatives are advertised as good business practices, they seem to rely heavily on customer guilt and assumed impressionability.
Other forms of greenwashing are categorized as:
Greenhushing – Staying silent about the organization’s green credentials or underreporting them to avoid scrutiny.
Greenrinsing – Treating sustainability as a moving target and revisiting/ revising goals and deliverables often before achieving any of them.
Greenlabelling – Using deceptive and misleading terminology or symbols to brand something as environment friendly when in reality it is not.
Greenshifting – Shifting the blame on the consumer and implying that it is up to them to do something for the environment.
Greenlighting – Placing the spotlight on a particularly green aspect of the business to draw attention away from other business activities or processes that are harmful to the environment.
Greencrowding – Hiding behind or among a group and moving at the pace of the lowest common denominator while the focus remains on the group’s collective results, cumulative investments, or the best performers.
On average, the companies that are perceived to be greenwashing suffer a 1.34% drop in their ACSI customer satisfaction score. On being accused of greenwashing or any of its varied versions, companies tend to face long-term impacts in the form of:
- Damaged company reputation that trickles down to other brands/products associated with it
- Strained customer relationships and experience
- Reduced credibility for future communication/campaigns/initiatives
- Shaken stakeholder confidence
- Stigma attached to products and services
So, where are companies going so wrong?
We analyzed the communication patterns of companies that were recently accused of greenwashing and these are the most common mistakes we identified:
- Vague, unclear, or misleading terminology – When a brand calls its products eco-friendly or conscious without providing any or enough information about how that promise is being fulfilled.
- Ignoring internal/external critics – When concerns being raised within the organization and beyond are not addressed in time, they may lead to whistle-blowers or critics calling the company out for inaction.
- Narrative led by advertising/marketing teams – When the external communication team is developing the brand’s marketing narrative without aligning it well with the sourcing, product development, operations, supply chain, and other departments, there is a possibility of exaggerated claims and promises being made unintentionally.
- Gaslighting the consumers – Educating the consumers about their role in saving the planet can be seen as gaslighting if the business model of the organization talking about it is not entirely environmentally friendly.
- Packaging/branding and product mismatch – Packaging designed to make customers believe that a company is environmentally friendly can backfire if the product lifecycle doesn’t corroborate that claim.
- Not being aware of the reach and influence of green vigilantes – Organizations such as Earthjustice, Climate Accountability Institute, Friends of the Earth, and The Advertising Standards Authority among others are gaining a significant following across the web as consumers become more aware of their responsibilities as inhabitants of this planet.
What do organizations need to do?
How can we help?
We, at Technology for Impact develop bespoke solutions for companies to impactfully embrace decarbonization, regeneration, and circularity. Regeneration is our exclusive suite of services ranging from leadership upskilling programs and regenerative business strategy consultancy to sustainable innovation, future studies, and deep ecological experiences for your employees. Write to us at info@technologyforimpact.com to discuss your requirements and we will meet you with tailored solutions for where you’re at.
Sources: HBR, Planet Tracker
