In a world increasingly concerned about environmental impact, companies are under immense pressure to demonstrate their sustainability credentials. But how can businesses truly differentiate themselves from those simply paying lip service to green practices?
Greenwashing is a term that you will likely be familiar with, as it’s one that’s been on the rise as consumer preference steers towards those who are seen to be doing the right thing. Alarmingly, high-severity cases, which involve companies that took a purposeful and systematic approach to concealing ESG violations, rise by more than 32% year on year.
In our upcoming 3-part series we’ll be exploring the impact of greenwashing on business, the different types of greenwashing and the role verification can play in building genuine evidence based sustainability strategies.
In this episode, Mel dives into the first of this 3-part series to explain what greenwashing is, the common tactics used in greenwashing and how businesses can build genuine sustainability.
You’ll learn
· Who is greenwashing?
· Where did the term originate from?
· The rise of greenwashing
· What are some of the common greenwashing tactics used?
· The danger of greenwashing
· How can businesses build genuine sustainability strategies?
Resources
In this episode, we talk about:
[02:05] Episode Summary – We kick off our 3-part greenwashing series with an exploration of what greenwashing really is, the common greenwashing tactics businesses employ and how you can avoid those pitfalls to build genuine sustainability within your business.
[05:25] What is greenwashing?: Greenwashing, in essence, is the deceptive use of environmental claims to mislead consumers into believing a company's products or services are more environmentally friendly than they actually are.
[05:45] Where did the term ‘greenwashing’ originate from? – The term "greenwashing" was coined in 1986 by Jay Westerveld, an American environmentalist.
Westerveld first used the term in an essay describing his experience at a hotel in Fiji. The hotel encouraged guests to reuse towels to "save the environment," but Westerveld observed that the hotel was simultaneously expanding its operations, significantly impacting the local environment. This contradiction highlighted the hotel's primary intent to cut costs rather than genuinely conserve resources.
Westerveld's observation exemplified how businesses could deceptively use environmental claims to mislead consumers into believing their products or services are more environmentally friendly than they actually are.
[06:35] The rise of greenwashing: Many businesses over a wide range of industries have made a pledge to reduce their carbon impact by 2050, driven by both an increase in regulation and consumer perception.
However, the Economist highlighted some troubling research, citing that while many businesses will puff out their claims of sustainable practices, many don’t have the evidence to back them up. Many should have the resource, say an Asset Manager, that could provide tangible reports on their carbon consumption each year, and yet they choose not to publicly disclose any such reports.
So, a lot of talking the talk, but not walking the walk!
[07:40] The growing need for comprehensive carbon reporting – There are a number of sustainability and ESG regulations now in effect, with more to come in 2025 (such as the Green Claims Directive that is due to come into affect on the 27th March 2025) that require businesses of different sizes and sectors to report on their carbon consumption and reduction. If you’d like to learn more about a few of these, check out our previous episodes on:
· SECR
· ISBB S2
· CSRD
· CSDDD
[08:15] What are the common tactics used in greenwashing? These can include:-
· Vague and Ambiguous Claims: Phrases like "eco-friendly" or "sustainable" are often used without specific, quantifiable data. However, the EU Green Claims Directive, in theory help address this, although this only applied in Europe.
· Focus on Single Issues: Highlighting one minor environmental benefit while ignoring significant negative impacts across the supply chain.
· False Labels and Certifications: Creating misleading labels or misrepresenting genuine certifications. There are numerous ‘Green certifications’ out there that charge for a badge, without providing any evidence, of for those that do provide information it could just be a document that isn’t evidence based i.e. a Policy statement or ‘pledge’ or ‘commitment’
· "Greenwashing by Association": Implying a connection to environmental causes through sponsorships or marketing campaigns.
[10:15] The danger of greenwashing – The danger with greenwashing is the negative impact it has through an Erosion of Consumer Trust. People are becoming increasingly skeptical of environmental claims, making it harder for truly sustainable companies to gain credibility.
Greenwashing can also lead to Distorted Market Signals: creating a false impression of progress, hindering genuine innovation and investment in sustainable solutions.
[11:30] How can businesses build genuine sustainability strategies?
· Transparency and Accountability:
- Disclose environmental data openly and transparently.
- Seek independent third-party verification of sustainability claims.
- Focus on Life-Cycle Assessment:
- Evaluate environmental impacts across the entire product or service lifecycle, from raw material extraction to end-of-life disposal.
- Continuous Improvement:
- Set ambitious, measurable, and time-bound environmental targets.
- Regularly review and refine sustainability strategies based on performance data.
- Engage with Stakeholders:
- Collaborate with suppliers, customers, and other stakeholders to identify and address environmental challenges.
If you would like some assistance with carbon Standards and reporting, simply get in touch with the team over at Carbonology.
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