What is Greenwashing and how can you avoid it?
Whilst many businesses are adopting good sustainability practices, some are falling short. Whether it is intentional or unintentional, greenwashing is a major challenge facing the industry and avoiding it is crucial for your business.
Greenwashing is when a company or individual makes false or misleading claims about the environment or the sustainability credentials of a brand’s product or services.
A company may greenwash certain aspects of its practices, regardless of how truthful they may be.
Often businesses will find themselves vulnerable to greenwashing with their marketing and advertising strategies. In 2021 H&M was accused by Changing Markets Foundation in a report that 60% of their sustainability claims were misleading and had been created to encourage the buyer to purchase their goods (1). This is just one of many examples of businesses making misleading claims. Other companies that have been accused of greenwashing include Coca-Cola, Nestle, Starbucks, and many other large multinationals. The CMA are actively investigating how eco-friendly products are being marketed and whether the consumer is being misled (2).
But how can a SME be affected by greenwashing? Although you might not make the headlines and be accused publicly of greenwashing to the same degree as these large corporates, all your suppliers, clients and staff will be able to see straight through any misleading claims. Correctly communicating your environmental performance to internal and external audiences is important for a range of reasons…including transparency, accountability, and reputational gain.
Within the subject of ‘greenwashing’ there are essentially 4 key communication trends that businesses need to be careful of to avoid greenwashing. Firstly, Greenlighting is a trend that refers to spotlighting green features of operations/products to detract from damaging activities. HSBC was ruled to be ‘greenlighting’ by the UK’s Advertising Standards Authority (ASA) for unqualified claims about its environmentally beneficial work, while also funding fossil fuel companies. They had shone the light on their ‘environmental’ work to increase consumer engagement but in fact, had not sorted out their internal challenge of funding fossil fuel organisations (3). Greenshifting is the second trend to be careful of, this is when businesses are thought to be shifting the blame up or down the value chain, usually to the consumers. A good example of this is when Shell asked the public what they were prepared to do to help reduce the world’s carbon emissions, fully knowing the damage its own emissions are doing to the planet (4). By passing the blame to your consumers or others within your value chain, you end up passing on accountability. Businesses must take ownership of their carbon emissions and be the driving force behind reducing them.
The third trend to be wary of is Greenlabelling. It simply means misleadingly labelling something as green or sustainable. This is a very common trend when it comes to greenwashing as many businesses see it as an easy way to market their products. Recently Johnson’s Windex Vinegar Ocean Plastic Bottle claimed to be the world’s first bottle made from 100% ‘ocean plastic’. But what transpired, was that the plastic was collected within 30 miles of the ocean (5). This is a typical example of amplifying a product to give it a commercial edge.
Greenhushing is the 4th and probably the most well-known trend to look out for. This is when businesses under report on or hide sustainability credentials to evade scrutiny by stakeholders. An article written by the Financial Times suggested that 25% of 1,200 businesses surveyed across 12 countries would not publicise their science-based net zero emissions targets (6). Greenhushing is quite common in the automotive industry and although the companies are keen to promote their EV ranges, a good example of Greenhushing is Toyota. It was published that zero-emission vehicles only made up 0.2% of their annual sales in 2021. Yet the company is pushing a ‘Beyond Zero’ sustainability campaign with captions such as ‘The future looks electric.’
Whilst looking out for these 4 trends, we also have a list of key tips when it comes to avoiding greenwashing:
- Ensure you are communicating in an accurate and realistic way.
- Always transparently reveal your strategies to address your most material environmental impacts.
- Annually report on any progress against your commitments, targets, and plans.
- Share challenges and learnings along the way with your stakeholders.
- Use your influence to support your wider stakeholders to begin their sustainability journey.
Always look to educate yourself and learn more about environmental terms and concepts, like best practice carbon footprint reporting standards, the range of renewable energy options available in the market, and sustainable sourcing strategies, so you can better evaluate all claims. Also, reliable third-party certifications, like Fair Trade or B-Corp, or corporate participation in the UN Global Compact or UN Race to Zero, may help verify a company’s commitment to environmental and ethical standards.
Maintaining transparency is essential to combat greenwashing. Any company that is dedicated to sustainability will normally provide detailed information via their websites about their practices, goals, and current progress including any setbacks or challenges experienced.
Understanding and mapping your entire supply chain is also a key method to ensure your business tackling its full set of environmental impacts. This includes analysing all potential or actual impacts related to how and where the raw materials are produced, which manufacturing practices and transportation modes used, and who and how your goods or services are purchased, used and disposed.
Finally supporting any government or market-based policies and regulations that promote corporate transparency and accountability is also important. By advocating for change and leading the way, you show that you are being as proactive as possible to improve your position.
Following all these steps will enable your business to follow best practice sustainable practices whilst avoiding greenwashing. With client demands increasing, ever changing legislations and industry pressure growing it is critical to act now to help grow the reputation and credibility of your business.
We are experts in communicating sustainability journeys for businesses. Through our simple process of helping organisations understand, assess, improve and communicate their environmental sustainability we continue to support organisations to systematically communicate their environmental performance without accidently greenwashing.
All our clients receive communications guidance pack to help them avoid unintentionally greenwashing. To find out more about everything we do here at mdsustain, please visit our packages and services pages to view all the sustainability solutions that we offer.
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