Greenwashing is the process of making a product or company appear more environmentally friendly than it actually is. This can be done in a number of ways, such as by using green logos or green packaging, making false claims about a product’s environmental benefits, or downplaying the environmental impact of a company’s activities.
Greenwashing is often used by businesses in an attempt to capitalise on the growing consumer demand for green products and services. However, greenwashing can be misleading and deceptive, and it can ultimately damage a company’s reputation.
When it comes to carbon footprint and carbon neutrality, greenwashing can take the form of false claims about a company’s emissions reductions or its progress towards becoming carbon neutral. For example, a company might claim to be carbon neutral when in reality it is only offsetting a small portion of its emissions. Or, a company might claim to have reduced its emissions by a certain percentage, when in fact the reduction is due largely to factors beyond its control, such as the closure of a factory.
Greenwashing can be harmful to both consumers and businesses. Consumers may end up paying more for greenwashed products that don’t actually deliver on their environmental promises. And businesses that engage in greenwashing may find themselves the target of consumer lawsuits or government investigations.
Why Do Companies Engage in Greenwashing?
There are a number of reasons why companies engage in greenwashing. First, it can be an effective marketing tool, helping to attract environmentally conscious consumers. Second, greenwashing can help to improve a company’s public image and reputation. And finally, it can help to build consumer trust and loyalty. All of the above points lead to a company or organisation incasing its revenue and profitability.
Companies engage in greenwashing when they do not have the expertise to know what is truly environmentally beneficial, but it’s more often due to ignorance of environmental issues. For example, Australia has a consumer protection agency that fined one company for selling “biodegradable” plastic bags which technically didn’t fully degrade unless processed with specially designed equipment – instead these items broke down into smaller parts over time.
How to Avoid Greenwashing?
To avoid greenwashing, companies should be transparent about their environmental practices and make sure that their claims are supported by scientific evidence. When in doubt, consumers can consult independent third-party organizations to verify a company’s green claims. By being aware of greenwashing, companies and consumers can help to create a more sustainable marketplace. Other ways consumers can spot greenwashing are:
- Avoid ‘fluffy language’ that has no clear meaning, such as ‘eco-friendly’ and ‘produced sustainably’
- Dangerous products making the product seem safe, such as eco-friendly cigarettes
- Using jargon that only a scientist could understand
- Providing no proof of the carbon claim
- Presenting fabricated claims and data as facts
The world has moved on and examples of greenwashing are being called out more and more. To ensure your “green” claims do not fall foul of greenwashing accusations please contact me directly at icaew@auditel.co.uk or visit auditel.co.uk/icaew and take advantage of our free carbon consultation for ICAEW members.
*The views expressed are the author's and not ICAEW's.