INTRODUCTION

WHAT IS GREENWASHING

Greenwashing is the act of making false or misleading statements about the environmental benefits
of a product or practice. It can be a way for companies to continue or expand their polluting as well
as related harmful behaviours, all while gaming the system or profiting off well-intentioned,
sustainably minded consumers

WHY IT MATTERS

The science is clear: greenhouse gas emissions, such as carbon and methane, from human activities
are wrapping the Earth in a blanket of pollution that has warmed the planet and led to severe
impacts such as more intense storms, droughts, floods and wildfires.

To limit climate change and preserve a livable planet, emissions need to be cut nearly in half by 2030
and reduced to net zero by 2050. Every fraction of a degree of warming matters and, as put by the
former chair of the High-Level Expert Group on the Net-Zero Emissions Commitments of Non-State
Entities, “the planet cannot afford delays, excuses, or more greenwashing”.

Greenwashing undermines credible efforts to reduce emissions and address the climate crisis.
Through deceptive marketing and false claims of sustainability, greenwashing misleads consumers,
investors, and the public, hampering the trust, ambition, and action needed to bring about global
change and secure a sustainable planet.

UNDERSTANDING GREENWASHING

DEFINATION AND ORIGIN OF TERM

Greenwashing was first coined in the 1980s by environmentalist Jay Westerveld. The term was in
reference to a hotel policy about reusing towels in order to “save the environment,” but in reality, it
was just a policy aimed at customers’ environmental sensibilities to reduce laundry costs.
Recognizing greenwashing is important because otherwise, well-intentioned consumers could be
misled to believe that they are making eco-conscious choices.

WORD BREAKDOWN

“Green” = Environmental or eco-friendly

“Washing” = Covering up or masking the truth (from "whitewashing")

REAL-WORLD EXAMPLE

One of the most famous examples of greenwashing comes from Volkswagen after the company was
accused of cheating on pollution tests and modifying engine software. It’s sometimes called
‘Dieselgate’ and has cost VW somewhere in the range of 31 billion euros — so far.

WHAT ARE FINES FOR GREENWASHING

Greenwashing fines can cost a business millions of dollars. Because greenwashing regulation tends
to differ from place to place, fines vary massively depending on where you are. Investigations into
greenwashing can take years before any penalties are imposed.

What is Green Marketing?

Green marketing, also known as sustainability marketing, involves the promotion of products,
services and brands that are beneficial to the environment. This approach integrates sustainable
practices, the use of eco-friendly materials, renewable energy sources and socially responsible
manufacturing processes into marketing strategies of the business. The primary aim is to attract
environmentally conscious consumers and inform stakeholders of an organisation’s sustainability
commitments or the environmental advantages of choosing specific products.

Green marketing is characterised by precision in conveying environmental claims, ensuring these

claims are supported by accurate data and effectively communicated to the target audience.

DIFFERENCE BETWWEEN GREENWASHING AND GREEN MARKETING

Claims and Certifications

Organisations should ensure their environmental claims comply with established guidelines such as
the Green Claims Code, which mandates that claims be clear, accurate and substantiated.
Verification using a reputable third-part organisation that aligns with sustainability standards such as
the United Nations Sustainable Development Goals can also validate claims. This helps in building
consumer trust and ensuring that the green credentials promoted are not only transparent but also
backed by credible evidence.

Company Practices

Consumers and stakeholders should research beyond the claims. It involves examining whether a
company’s practices align with their advertised green credentials. Transparency in the company's
supply chain, adherence to sustainable production methods and the overall environmental impact of
their products are critical areas to investigate.

Transparency

Transparency is paramount in distinguishing genuine green efforts from greenwashing. Companies

should provide clear, accessible information that supports their environmental claims and is backed
by verifiable data. This includes detailed reports, links to sustainability certifications and evidence of
compliance with environmental standards.

WHAT ARE THE 7 SINS OF GREENWASHING?

1. Hidden Trade-Offs

Some products use claims like “made with recycled contents” or “compostable” to cover up other
environmentally damaging factors the company commits when creating the product. While these
products can likely be recycled in most areas, the environmental costs of unethical working
conditions, high emissions, solid waste production, overexploitation of resources, and high resource
consumption are often swept under the rug and far outweigh the benefits provided by recyclable or
compostable packaging.

2. No Proof or Facts

You may see some companies claiming to be environmentally friendly without backing up this claim
with facts or evidence. A common example of this can be seen with products that are claimed to
have been made with a certain amount of recycled materials or with a specific reduction in
emissions during manufacturing. If either of these claims are made on packaging without any
indication of certification from a trusted corporation, these claims are empty and false.

3. Vague Statements

Countless labels throughout stores contain the words “sustainable”, “all-natural”, or “eco-friendly”.
While these all seem to be great terms at first glance, it is crucial for consumers to take a moment
and think about what they actually mean. These labels are misleading because the right combination
of environment-related words can easily persuade the public into thinking they are supporting a
company that really cares about the environment even if they do not.

4. Irrelevance

Companies will sometimes promote an environmental claim or fact that is technically true, but
irrelevant to the product they are selling. The biggest example of this is the claim “CFC-Free”. CFCs
(Chlorofluorocarbons) are a type of man-made greenhouse gas that has been banned by law since
the 1970s. The claim “CFC-Free” deceives people who are unaware of current environmental laws or
production standards to believe that the company is environmentally conscious when in fact they
are only complying with the law.

5. Lesser of Two Evils

Companies will commonly make environmental claims even when the product they are offering has
minimal environmental benefits to begin with. The automotive industry is a great example of this, as
many car companies claim that their vehicles utilize more fuel-efficient technology than their
competitors. While these claims can be true, they should never overshadow the fact that every gas-
powered car produces significant emissions and pollution every year. It is crucial to remember that
being the lesser of two evils does not suddenly make a company or individual a force for good.

6. Lying

Lying is a surprisingly common advertising tactic used around the world, especially when it comes to
environmental claims and sustainability. The most common example of this can be seen with
companies claiming to have certain certifications even if they do not. Some companies may also
outright state that their products are “eco-friendly” even if they do not offer any benefits over
similar products on the market. Identifying these lies is crucial for spotting greenwashing and
avoiding companies that use them.

7. Worshiping False Labels

False labels consist of badges, certifications, and labels that realistically mean nothing or are
completely irrelevant to the product. Some companies even award themselves with certificates or
endorsements that are not backed by a relevant authority, making their products seem
environmentally friendly to the average consumer even if they aren’t. While government regulations
are starting to crack down on this practice around the world, it has been occurring for many years
and will continue for many more before it is fully stopped.