Greenwashing in Business: Reasons, Statistics, Identification

Greenwashing is a deceptive marketing strategy used by businesses to create the perception that their products, aims, and policies are environmentally friendly. It involves the use of green PR and green marketing to persuade the public that a company is committed to sustainability, even when it may not be the case. Companies engage in greenwashing to improve their public image without making substantial changes to their environmental impact.

Reasons for Greenwashing

Survey Findings on Sustainability in Purchasing Behavior

A survey conducted by McKinsey & Co. revealed that 66% of all participants, and an even higher percentage of millennial respondents at 75%, prioritize sustainability factors when making purchasing decisions. Yet attaining true sustainability is more resource-intensive than greenwashing.

This is one of several reasons why businesses resort to greenwashing. Brands want to enhance their public image and attract consumers and investors. By making hard-to-detect misleading or exaggerated claims about their practices, companies can position themselves as responsible stewards of the environment.

Relationship of Greenwashing and Astroturfing

Greenwashing often goes hand-in-hand with astroturfing, a practice in which the sponsors of a message or organization are hidden to make it appear as though it originates from grassroots participants.

Astroturfing can be used to create the illusion of widespread public support for a company's green initiatives, even when such support may not exist. This further contributes to the deceptive nature of greenwashing.

An example of astroturfing combined with greenwashing might be a group of seemingly unconnected editors changing Wikipedia articles to improve the environmental record of the subject of the article.

Examples of Greenwashing

Keurig: False Claims and Misleading Marketing

Keurig, the popular coffee machine manufacturer (that seems to have a machine in every AirBnB), faced backlash and a $3 million penalty for misleading consumers about the recyclability of its single-use plastic K-Cup pods.

The company claimed that their pods were easily recyclable, making it seem that they were actively addressing the issue of plastic waste. However, it was revealed that the pods were not widely accepted for recycling, and the company's instructions for recycling were insufficient for many recycling programs. 

Volkswagen: Inadequate Emissions Reduction and Low-Quality Offsetting

Volkswagen, notorious for the diesel emissions scandal, also faced criticism for its greenwashing practices. The company focused on carbon offsetting without first adequately reducing its carbon emissions. While they tried to improve production efficiency, Volkswagen fell short in promoting the transition to electric vehicles and sustainable car use. Additionally, their choice of low-quality offsetting projects raised doubts about their commitment to addressing the plastic pollution crisis effectively. 

Ryan Air Advertisments

European airline Ryanair is another example of using imagery joined with false statements. They claimed that they were the lowest-emission airline in Europe and created an advertising campaign with green fields, flowers, and other images to promote the belief. The airline was named one of the EU's Top Ten Carbon Emitters. Ryanair was quickly challenged, and their claims were proven wrong. The airline was immediately forced to remove the advertisements.

Coca-Cola: Misleading Claims about Plastic Packaging

Coca-Cola, one of the world's largest beverage companies, was accused of greenwashing through its claims about plastic packaging. The company promoted an innovation that claimed their bottles were made up of 25% marine plastic, giving the impression that they were actively addressing the issue of plastic pollution. However, Coca-Cola failed to mention that it is also one of the world's biggest plastic polluters. 

HSBC: Omitting Information and Failing to Disclose Contributions to Climate Crisis

HSBC, a major global bank, faced scrutiny from a UK advertising watchdog for misleading advertisements that didn't disclose the bank's contribution to the climate crisis. The bank highlighted its investments in climate-friendly initiatives but didn't acknowledge its significant financing of businesses and industries that emit notable levels of carbon dioxide and greenhouse gases. 

Oatly: Overstated Environmental Claims and Insufficient Evidence

We love Oatly. But the Swedish oat milk company faced a ban on its advertisements by the UK Advertising Standards Authority (ASA) for making bold environmental claims without sufficient evidence.

The company's advertisements said that cutting dairy and meat products from diets was the single biggest lifestyle change to reduce environmental impact – but the ASA found that the claims were based on insufficient evidence and overstated the point.

Consumer Perception and Impact

Research indicates that consumers are becoming more and more aware of greenwashing and are more likely to choose environmentally-friendly products over alternatives – if they can tell the difference. That said, many consumers still don't notice greenwashing, especially if they perceive the company or brand as reputable. In other words, they give the company the benefit of the doubt.

Greenwashing Statistics

In recent years, the issue of greenwashing has gained significant attention, with alarming statistics shedding light on the prevalence of deceptive environmental claims made by businesses. Here are some examples:

  • 68% of US executives admit their companies are guilty of greenwashing.
  • 58% of global c-suite leaders confess to greenwashing.
  • 88% of Gen Z distrust brands' environmental, social, and governance (ESG) claims.
  • 78% of Americans believe companies should be environmentally responsible, and 64% say they feel happy when buying sustainable products.
  • 42% of corporate environmental claims made online are likely deceptive or false.

Characteristics of Greenwashing

Greenwashing takes various forms, each with its own characteristics. Some common types of greenwashing include:

  1. Lying: Not telling the truth... you know, lying.
  2. Cherry-picked attributes: A claim that a product is "green" based on a narrow set of attributes without considering other critical environmental issues.
  3. Difficult to prove: A claim that cannot be substantiated by easily accessible information or reliable third-party certification.
  4. Claims that don't really matter: A claim that may be true but unimportant or unhelpful to consumers seeking environmentally preferable products.
  5. Made-up or vague terms: A poorly defined or broad claim that is likely to be misunderstood by consumers. For example, the term "all-natural" does not necessarily mean "green."
  6. False endorsement: A claim that gives the impression of a third-party endorsement when none exists.

These characteristics illustrate the deceptive tactics used by companies to create an illusion of environmental responsibility.

Avoiding Greenwashing

To avoid falling victim to greenwashing, people should try to be vigilant and informed. Some ways to avoid greenwashing include:

  • Look for specific and verifiable claims supported by credible third-party certifications.
  • Look for transparency and data-backed evidence to support sustainability claims.
  • Consider the whole lifecycle of a product, including its production, use, and its disposal.
  • Research a company's overall sustainability practices, not just its products.
  • Be skeptical of vague or broad claims that lack clear meaning.
  • Compare products within the same category to avoid being misled by relative comparisons.
  • Be aware of misleading imagery or labels that give the impression of environmental friendliness.

Unfortunately, identifying greenwashing takes work. But, by being informed, individuals can play a role in combating greenwashing and supporting truly sustainable businesses.

 


Free reputation consultation

call 1.800.889.4812

Call

1.800.889.4812
Talk with an expert
schedule a meeting

Set a Meeting

Schedule a Zoom meeting with an expert

Discuss your options with an expert. Get answers to questions about the best way to proceed, timeline, pricing, and much more.