Insights from Jane Courtnell at the Green Business Bureau, a science communication enthusiast, on greenwashing signs to look out for, and examples of companies who were held accountable for their misleading claims.
A 2022 Advanced Trends Report found 43% of employees, when questioned, thought their company was guilty of greenwash.
What is greenwashing?
Greenwashing is a deceitful marketing tactic that tricks an ecologically conscious consumer for corporate gain. Companies “greenwash” by conveying a false impression or providing misleading information about their sustainability. Greenwashing can be used intentionally and unintentionally by a business.
As consumers, if we don’t want to be deceived we must understand how to spot corporate greenwash. By spotting greenwash we can call businesses out and help promote truly sustainable practices.
In this article, you’ll learn how to recognize the 5 main signs of corporate greenwash and be equipped to identify false green claims.
What is Greenwashing?
Greenwashing is a marketing tactic that exaggerates a company’s efforts to be sustainable, solely for financial gain. It’s used to deceive an ecologically conscious consumer by parading environmental responsibility which masks environmentally crippling operations. That is, a business will spend more on its green marketing strategy relative to the green investments made.
Greenwashing, when paired with ineffective regulation, contributes to consumer skepticism over green claims. This diminishes consumer power. And this consumer power can change the playing field for business, creating an environment where corporations compete on a sustainability level (being environmentally and socially responsible), as opposed to just an economic level. Greenwash is a cheat card in this game that will only haunt a business in the long run, through a tarnished brand reputation and legal conviction by the Federal Trade Commission (FTC).
The Troubling Evolution of Corporate Greenwash
In the 1960s the environmental movement gained momentum. NGOs were established to oversee the environmental effects of third-party operations. Greener products and services then slowly started to gain traction because of consumer demand.
Businesses found themselves in a popularity contest over how sustainable their operations were, and this popularity prompted organizations to create a new green image through advertising. Jerry Mander, a former Madison Avenue advertising executive, named this new form of advertising.
Greenwashing wasn’t yet widely recognized. This meant companies got away with misleading claims due to a lack of regulation. Businesses could reap the benefits of a perceived philanthropic reputation without putting in the real work to be environmentally sustainable. Through short-term wins, greenwashing became ubiquitous.
Probably the most famous greenwashing campaign in history was Chevron’s “People Do” campaign, launched in 1985. Advertisements show Chevron employees protecting bears, butterflies, and sea turtles. Yet, most of the environmental programs promoted in the campaign were mandatory anyway, and others were insignificant and inexpensive when compared to the costs of advertising them.
For instance, Chevron’s butterfly preserve movement cost the company $5,000 per year. This cost is a pin-prick relative to the millions spent on the related advertisements. Once more, during the campaign’s launch, Chevron continued to violate the clean air act and spill oil into wildlife refuges.
Putting a Name to Misleading Green Claims
It wasn’t until a year after the Chevron campaign that the term greenwash was coined by Jay Westerveld, an American environmentalist.
On his visit to a Beachcomber island resort, Westerveld was appalled by the resort’s “help us save the environment, please re-use the towels” campaign. Why was he so appalled when this seems like an innocent statement? Who could argue that reusing towels isn’t good for the environment?
But, as Westerveld noted, this campaign distracted attention from the resort’s plans to expand into fragile coral reef habitats. The resort was presenting itself as environmentally conscious when the core business efforts were environmentally crippling.
After Westerveld brought attention to these misleading environmental claims, a 1991 study by the Journal of Public Policy and Marketing reported that 58% of environmental ads had at least one deceptive claim.
To curb business appetite for this unhealthy greenery, in 1998 the U.S. Federal Trade Commission (FTC) created the Green Guides. These guides define what terms to use for environmental marketing to create a common language and standardization. Today the FTC supports these green guides through enforcement action and penalties for companies caught using misleading environmental claims.
With heightened public awareness of greenwashing, and increasing measures to curb it, is corporate greenwash still trending today?
Is Greenwashing Still Trending Today?
A recent survey by the Pew Research Center found that 6 in 10 Americans identify climate change as a major threat to the country. U.S. consumers are estimated to spend $150 billion on products marketed as sustainable by 2021. This figure demonstrates consumer willingness to pay a premium for such goods and unfortunately, companies are still using greenwash to capitalize on this trend.
In 2010, a TerraChoice report found that 95% of green products were marketed using greenwash. In a more recent 2021 study, the European Commission (and other national authorities) ran an extensive cross-sector sweep of websites to identify instances of greenwash. Their findings reveal that greenwashing is a prevalent problem:
- In 42% of cases, green claims were exaggerated, false, or deceptive. In 37% of cases, green claims included vague and general statements, using words such as eco-friendly and sustainable with little substantiation.
- In 59% of cases, there was no easily accessible evidence to support the green claim.
- In more than 50% of cases, the company could not provide sufficient information for consumers to assess the accuracy of the green claim.
How to Spot Greenwashing: The 5 Signs of Corporate Greenwash
As consumers, we must be able to identify greenwashing and change our consumption habits accordingly. Doing so will exercise our consumer power to support evidence-based sustainable initiatives.
To help you, the Green Business Bureau has listed 5 signs of corporate greenwash to look out for. Use this list as your consumer guide to spot and stop greenwashing.
Sign #1: Vague Terms and Slogans
Sustainable, eco-friendly, natural, green – these are common terms used in marketing to appeal to the eco-conscious consumer. But what do they mean?
The unsubstantiated overuse of these terms has led to them becoming increasingly vague and interchangeable; a phenomenon known as term dilution. For instance, if you read our previous post ESG and Sustainability: Your 101 Guide for Understanding Corporate Sustainability you’ll understand that the very term sustainable has fallen victim to term dilution because of greenwashing.
All of a sudden sustainability is about climate change, ending poverty, and gender equality. Can companies employing strategies focusing on just one or two of these areas market themselves as sustainable?
Sustainability means taking only what you need and leaving systems capable of continued existence. Reducing plastic use in the name of sustainability does not equate to being sustainable.
Natural is another vague term that’s become essentially meaningless. There are natural ingredients that are bad for us and our environment. For instance, the pesticide, arsenic, is natural but you wouldn’t want it in your coffee. This pesticide was sprayed over U.S. towns in the 60s causing songbirds to drop dead from their nests while humans fell sick with poisoning. By sticking “natural” on food packaging, the agricultural industry could hide these sinister practices.
Don’t be fooled by companies saying the right thing. Look for the evidence to support their claim and question what these vague terms actually mean for each brand.
Sign #2: Using Natural Imagery
Just as companies can easily say the right thing, they can easily show you the right thing. Trees, butterflies, bunnies, blue skies, and a farmer’s tractor – these are seductive images used to portray an eco-friendly business. Another common deceitful trick is using earth colors, such as blues, greens, and browns.
Like with the use of vague terms and slogans, you need to look for the evidence. Does the imagery used help businesses communicate their sustainable initiatives, or is it just surface-level aesthetics?
Sign #3: A Lack of Transparency and Proof
You’ve been attracted to a brand using natural imagery and eco- friendly terms, and you want to find the evidence to support this green marketing. What should you be looking out for?
Check the label, product description, or website for information about the brand’s environmental impact and what initiatives they’re involved in. A company that’s genuinely working hard to minimize its environmental impact will tell you. If there’s no disclosed information or a lack of information, steer clear of that brand.
You also need to look for proof. Certification schemes are there to provide third-party assurance that a company’s green claims are true. But beware of false labels. There are fake certifications out there designed to mislead consumers.
A good test is to check a company’s B Corp score by searching the brand using the directory. This certification body provides digital transparency with respect to a company’s sustainability initiatives for the consumer. The Green Business Bureau EcoAssessment and EcoScore card also provide transparency, scoring a company’s sustainability performance as either Aware, Gold, or Platinum. B-Corp and GBB certification mean there’s no hiding place for sketchy green credentials – businesses that sign up are committed to being more environmentally friendly. Credible industry-wide certifications include:
- LEED
- Green Business Bureau
- B Corp
- USDA Organic
- WELL
- Energy Star
- ISO 14001
- GRI
- EDGE
- Fair Trade USA Certification
- PEER
- Green Seal
Check out this EcoLabel Index for a comprehensive list of reliable green certifications.
Sign #4: Irrelevance and Simplicity
Not all environmental claims are relevant. A good example is CFC-free products. CFCs have been banned for over 30 years, but you still see products advertising themselves as CFC-free. This may seem harmless, but it creates the impression that the product is better for the environment than a competitor, when in fact, they are the same. Here the green claims made are irrelevant.
On this note, companies can get tunnel vision targeting one environmental problem without seeing the big picture and over-simplifying what it means to be sustainable.
Let’s come back to the example just mentioned. Great, our product is CFC-free, but what about how it’s made, packaged, and transported? What are the company’s overall GHG emissions? How much waste does the company produce? What about the other chemicals used in production?
Sustainability is complex and businesses cannot solve this by focusing on a single initiative. Companies need to take a holistic approach to the problem of unsustainability. Organizations need to consider their constituent parts, how these interrelate over time, and how they interact with other systems and our environment.
In short, beware of companies flaunting their recyclable plastic when they haven’t addressed the problem of excess packaging in the first place. This applies to every green claim.
Sign #5: A Lack of Modesty
As mentioned, the problem of unsustainability is complex, and solutions require a systems-thinking approach. In fact, true business sustainability is a problem that hasn’t been solved yet, as we explain.
Coming back to the rules of sustainability, sustainability means taking only what you need and leaving systems capable of continued existence.
Let’s consider the outdoor clothing brand Patagonia as an example. Patagonia is considered worthy of its sustainable reputation, winning the 2019 UN Champions of the Earth award. When it comes to sustainability, Patagonia comes in as a gold standard label and has an above-average B-Corp score of 154. Yet, even Patagonia hasn’t solved the problem of unsustainability in business.
According to Paul Hawkin, author of Ecology of Commerce, despite their commendable efforts, Patagonia does not leave environmental systems capable of continued existence. According to Hawkins, if every company operated as Patagonia, we’d still be experiencing the environmental issues we have today as a result of economic activity. Modestly, Patagonia does address the flaws in their initiatives and highlights the imperfections in their drive to become truly sustainable.
In summary, no brand should be placing itself on a pedestal when it comes to sustainable design. They need to be modest and address the challenges they face on their journey to become a truly sustainable business. When they get there, we’ll hear about it, as it will be a monumental moment in the evolution of our businesses.
Greenwashing Examples
Recognizing these 5 greenwashing signs means we’re better equipped to identify corporate greenwash and hold companies accountable for their misleading claims. These 5 signs have been applied to identify the greenwash examples below.
Greenwash Example #1: Ikea
A 2020 investigation by Earthsight found Ikea had been making Beachwood chairs using illegally sourced wood from the forests of Ukraine’s Carpathian region. This area is home to endangered bears, lynxes, wolves, and bison. What was most shocking about this case is that the illegal timber was certified by the Forest Stewardship Council (FSC). This raises questions about the transparency and ethics of the FSC federation too.
Ikea flaunted its sustainability credentials, and the FSC – considered a gold standard of forest accreditation – approved. In this example, both institutions are guilty of greenwash. The lack of transparency and proof over how the wood had been sourced was a clear sign of this greenwash. In addition, a cautious appraisal of the certification stamp is needed.
Greenwash Example #2: H&M
H&M brands their Conscious Collection for the environmentally aware consumer. Yet, a 2021 report by the Changing Markets Foundation, investigated this major high-street fashion brand to check the truthfulness of their sustainability claims. The report found 96% of H&M’s claims were misleading. The claims made were vague, which is a common greenwash sign as we know. What does a conscious collection mean? The meaning is revealed below:
“H&M’s Conscious Collection actually contains a higher percentage of synthetics than its main collection, standing at 72% versus 61% respectively. Similarly, 57% of the garments in the Conscious Collection use polyester, in contrast to 52% of the H&M main collection.” – Changing Markets, Synthetics Anonymous “Fashion brands’ addiction to fossil fuels”
Greenwash Example #3: Shell
In 2020, Shell was called out for gaslighting the general public. Shell used Twitter to ask consumers if they were “willing to change to help reduce emissions?” The poll only attracted 199 responses but then went viral. Shell received a wave of vitriol with high-profile people such as Alexandre Ocasio-Cortez and Greta Thunberg calling the company out. Shell continues to be responsible for ~1% of global carbon dioxide emissions from its activities every year.
Here we see a lack of modesty. Shell puts the onus on the consumer which seems to distract from their own environmentally harmful activities. In this campaign, Shell does not raise its hand and address its unsustainable practices.
Exercise Your Consumer Power to Support the Advancement of True Business Sustainability
The problem with corporate greenwash is that it takes away the consumer power that’s vital to create a better, greener future for our children. Greenwashing hinders progress by masking unsustainable operations, meaning these operations cannot be addressed with sustainable alternatives.
Creating truly sustainable businesses, and solving the complexities of this challenge, requires cross-sector collaboration and coordination from all – business leaders, investors, employees, and consumers. How can this collaboration occur when shifty and deceitful greenwash tactics are used?
We hope we’ve put corporate greenwash in the spotlight and raised awareness of this issue. You can now use the 5 signs of greenwash explained in this article to not only be conscious consumers, but also proactive consumers. Using these signs, you can identify greenwashing and exercise your consumer power to spot and stop green lies.
About the Author
Jane Courtnell
Green Business Bureau
With a Biology degree from Imperial College London and further studies at Imperial College’s Business School, Jane Courtnell has an enthusiasm for science communication and how biology can be used to solve business issues, such as employee wellbeing, culture, and business sustainability.
