What is greenwashing and how can my business avoid it?

It’s safe to say that going ‘green’ is the new ‘in thing’ for businesses. As the public becomes more concerned about the state of the environment, more businesses are adapting to a sustainable future. But, have you ever stopped to think that maybe companies aren’t giving you the full picture?

Corporate greenwashing is on the rise as businesses fake an interest in being eco-friendly. But, what exactly is greenwashing, anyway? 

With this handy Bionic guide, we’ve broken down everything you need to know about greenwashing and how your business can avoid it.

What is greenwashing?

Greenwashing is when a business puts out false or misleading information about the positive work it's doing to help with environmental issues. One famous example of greenwashing was when Volkswagen fitted tech to its test vehicles to help record false emissions test results.

The term was first coined in 1986 by environmentalist Jay Westerveld, who said that ‘greenwashing’ refers to the process of conveying a false, misleading or untrue action about the positive impact a company, product or service has on the environment.  

‘Greenwashing’ can also occur when a company attempts to emphasise a sustainable aspect of a product or service, in an attempt to overshadow their involvement in environmentally damaging activities. 

How does greenwashing work?

Terms like ‘sustainable’, ‘green’ and ‘eco-friendly’ — or just claiming to be ‘good for the planet’ or ‘better for the environment’ – make companies appear greener than they are. However, these nonspecific buzzwords are thrown around without any supporting evidence, sometimes making it difficult to understand a company's true practices.

Due to the increasing number of greenwashing cases that we’ve seen in the media, consumer scepticism has increased. 

What are some examples of greenwashing?

Greenwashing can be as subtle as misleading packaging wording choices to companies flouting themselves as eco-champions — despite not actually being this. Greenwashing is a harmful way of advertising and companies should be held accountable. 

But, have any companies ever been caught greenwashing?

1. Nestlé

Back in 2018, Nestlé released a statement saying that it had big ‘ambitions’ for its packaging to be either 100% recyclable or reusable by 2025. 

However, critics and environmentalist groups were quick to point out that the company hadn’t actually released any clear targets, additional efforts or even an outlined timeline of how they proposed to get to its 100% recyclable or reusable packaging target. 

2. Coca-Cola

In 2020, Coca-Cola came under fire when it announced that it wouldn’t abandon its plastic bottles, stating that they were ‘popular with customers’. Despite this, Coca-Cola is adamant that it’s in the process of tackling packaging waste, and has committed globally to getting every bottle back by 2030. They say that this way, none of it ends up as littler or in the ocean and the plastic can be recycled into new bottles.

In June 2021, the environmental organisation Earth Island Institute filed a lawsuit against the drinks giant. It stated that Coca-Cola falsely advertised itself as sustainable and eco-friendly, despite being one of the largest plastic polluters in the world. 

3. IKEA

In June 2020, furniture retailer IKEA was linked with an illegal logging system in Ukraine. The wood certification scheme that IKEA uses, Forest Stewardship Council, was described in a report by NGO Earthsight as an “organisation that greenwashes the timber industry”. 

IKEA also claimed to have built its “most sustainable store yet” in London in 2019. However, what it didn’t disclose was that it was built on top of another sustainable store that was demolished after just 17 years of use. 

4. H&M

Over the years H&M has been caught greenwashing multiple times. The fashion retailer contributes to a massive amount of textile waste and continuously has a habit of advertising its green initiatives widely, despite it actually being a small part of its operations. 

In 2019 it launched ‘Conscious’, its own line of ‘green’ clothing that claimed to use ‘organic’ cotton and recycled polyester. The Norwegian Consumer Authority criticised H&M for its ‘misleading’ marketing of the ‘Conscious’ collection because the information given on sustainability ‘was not sufficient’. 

5. Quorn Foods

In 2020, Quorn Foods launched their new product the ‘Thai Wonder Grains Lunch Pot’ as a way to address climate change. They claimed that it “helps us to reduce our carbon footprint” but didn’t actually disclose who they meant by “us”. 

Eventually, Quorn Foods stated that they were referring to themselves and not the general public, who should avoid buying products that come in single-use plastics if they actually want to reduce their carbon footprint. 

When the Advertising Standards Authority conducted an inquiry, it ruled that the ad was misleading as since the product was new, “it was impossible to determine whether it could reduce Quorn Foods’ carbon footprint.”

How can greenwashing harm a brand's reputation?

Overclaiming a product or service's sustainability credentials can lead to criticism from the public, environmental organisations and even other brands.

Although all of it might not be intentional, in almost all cases, corporate greenwashing has negatively impacted a business's reputation, resulting in a drop in sales.

Remember, just because a company adopts an image of caring for the environment, it doesn’t mean they have a legitimate interest in being or becoming eco-friendly. Because environmentalism has become a ‘trend’, it’s likely you’ll find more businesses following along simply for appearance's sake. 

What’s the difference between greenwashing and green marketing?

There’s a very fine line between greenwashing and green marketing — unlike greenwashing, green marketing refers to the practice of advertising and developing a product or service based on its real or perceived sustainability. 

Green marketing is considered a generally honest and transparent practice with products and services having to meet the following criteria:

• Products or services are free of toxic materials and ozone-depleting properties
• The products can be recycled
• The products or services are designed to be reused over the long-term
• They’re manufactured following environmentally-friendly practices or are produced from recycled materials
• The product packaging is eco-friendly, biodegradable and can be recycled
• Any non-green processes of your business don’t use materials in excess

Along with these, there are also three principles that your business needs to follow to successfully stick to green marketing:

1. Environmentally-friendly culture needs to be at the core of your company
2. Support your local communities' environmentally-friendly initiatives
3. Your brand is transparent about its sourcing, operations and processes

What are some signs of greenwashing?

There are some common signs of greenwashing that companies tend to follow when they’re trying to show how ‘green’ they are. These are some signs to be aware of:

• ‘Fluffy’ language — Words like ‘eco-friendly’, ‘green’ or ‘natural’ tend to get thrown around with no clear meaning. 
• Misleading eco-labels — Labels are often used in an attempt to mislead consumers as they can be hard to verify. In the past, some brands have created their own eco-labels which have claimed to be environmentally friendly, however, they actually have no legal standing. Remember, just because a product has a green leaf or a green dot doesn’t mean that the product has been developed or is a part of a sustainable approach. 
• Using jargon — Sometimes brands will purposefully use language that only a scientist would understand, essentially isolating the target demographic that they’re going after so it’s difficult to comprehend  what the brand is actually saying.
• No-credibility — Some brands make it obvious in their attempt to ‘green’ a dangerous product to make it seem safe. 

How can my business avoid greenwashing?

Making sure that your business avoids greenwashing is simple. Here are a few steps you can follow to ensure that you’re as transparent with customers, suppliers, environmentalist groups and just about anyone as you can be:

1. Make sure claims are clear and easy to understand

When you’re making a claim about your business’s practices, it’s important to make sure that they’re clear and easy to understand. Where possible, include specific details like units of measurement, specific certifications and verification endorsements. 

2. Back up any claims with data

When you make a claim, it’s important that you back it up with data to show people that you’re transparent with your practices. Make sure that it’s all kept up to date on your website, or anywhere you make the claim, and only use data that can be verified.

3. Be honest about your brand's sustainability plans and practices

Make sure that your customers are informed about how ‘green’ your brand and individual product practices are. 

When you’re stating any goals or plans, be sure to include a timeline to make it clear when you expect to achieve this and how. 

4. Compare yourself to companies on the same level

When comparing your product's sustainability practices to another, make sure you’re comparing it to a brand that’s on the same level as you in reference to product offering, revenue, audience base and size. 

There’s no point comparing yourself to a brand that’s leagues above or below as they’ll all be at different levels. 

Is greenwashing a crime?

Depending on the circumstances, greenwashing may be a criminal offence under the ‘Consumer Protection from Unfair Trading Regulations 2008’ which prohibits certain unfair commercial practices.  

Get your business set with Bionic

At the end of the day, greenwashing can be a harmful practice and one that can seriously impact a brand. If you’re wanting to be sustainable, then your best bet is to actually commit to sustainable and environmentally-friendly practices. If you’re wanting to know more about making your business sustainable, find out more about the future of sustainability for SMEs with our guide or implement these simple 8 steps. 

Get in touch today with the Bionic team to discuss your needs or get more information on business energy.