Coined by environmentalist Jay Westerveld in the 1980s, the term “greenwashing” encapsulates the deceptive practice wherein companies present themselves as more environmentally friendly than their actual practices suggest. It not only undermines sincere sustainability efforts but also poses a significant obstacle to progress in addressing environmental challenges.
The rise in demand for products and services aligned with values of sustainability has fuelled the growth of the greenwashing phenomenon. The practice has become so rife concerning net zero that the UN has established a High-Level Expert Group to develop stronger standards for net zero emissions pledges.
The group’s Integrity Matters report outlines recommendations for credible, accountable net zero commitments. To operationalise these, UN Climate Change introduced a Recognition and Accountability Framework and a Draft Implementation Plan, enhancing transparency and credibility in climate action. This proactive approach from the UN indicates the global significance of combatting greenwashing.
Characteristics of greenwashing
A prevalent form of greenwashing involves the use of vague terms such as ‘eco-friendly,’ ‘natural,’ or ‘green’ without specifying how a product or business contributes to environmental improvement. Companies participating in such activity may make exaggerated or entirely false claims, creating challenges in verifying the authenticity of these assertions.
Often, inconsequential efforts are highlighted, diverting attention from more substantial environmental concerns. Misleading tactics may include displaying labels or certifications implying environmental friendliness, lacking proper accreditation or failing to align with recognised standards.
In reality, customers may unwittingly support companies with minimal commitment to sustainability, creating a blurred distinction between authentic and deceptive practices. Meanwhile, legitimate eco-friendly businesses may face unfair competition from unscrupulous firms actively engaged in greenwashing.
Furthermore, greenwashing can create scepticism towards eco-labels and certifications, diminishing their effectiveness in guiding purchasers towards genuinely sustainable products and services.
Transparency and accountability
To counteract greenwashing, the Competition and Markets Authority (CMA) introduced the Green Claims Code – https://greenclaims.campaign.gov.uk – towards the end of 2021 and is addressing misleading environmental claims. In 2022, the CMA focused on the fashion industry, and in 2023, it turned its attention to scrutinising the FMCG market, evaluating the accuracy of green claims related to household essentials.
While the CMA guidance on environmental claims on goods and services primarily targets the consumer market, it also applies to a more limited extent to the B2B market. The CMA is cognisant that many SMBs in the B2B sector are reliant on manufacturer and wholesaler information and the legal framework for B2B marketing practices is less comprehensive than B2C. However, “the CMA urges all businesses to act fairly in their transactions with other businesses, particularly where small businesses are concerned.”
The Green Claims Code lays out six crucial principles that businesses must adhere to when making environmental claims. These are:
- Be truthful and accurate
- Be clear and unambiguous
- Do not omit or hide important information
- Only make fair and meaningful comparisons
- Consider the full life cycle of the product/service
- Claims must be substantiated
According to the CMA and following the guidance of the above principles, when making a green claim, a business should be able to answer ‘yes’ or agree to each of the following statements:
- The claim is accurate and clear for all to understand.
- There’s up-to-date, credible evidence to show that the green claim is true.
- The claim clearly tells the whole story of a product or service; or relates to one part of the product or service without misleading people about the other parts or the overall impact on the environment.
- The claim doesn’t contain partially correct or incorrect aspects or conditions that apply.
- Where general claims (eco-friendly, green or sustainable for example) are being made, the claim reflects the whole life cycle of the brand, product, business or service and is justified by the evidence.
- If conditions (or caveats) apply to the claim, they’re clearly set out and can be understood by all.
- The claim won’t mislead customers or other suppliers.
- The claim doesn’t exaggerate its positive environmental impact, or contain anything untrue – whether clearly stated or implied.
- Durability or disposability information is clearly explained and labelled.
- The claim doesn’t miss out or hide information about the environmental impact that people need to make informed choices.
- Information that really can’t fit into the claim can be easily accessed by customers in another way (QR code, website, etc).
- Features or benefits that are necessary standard features or legal requirements of a product or service type, aren’t claimed as environmental benefits.
- If a comparison is being used, the basis of it is fair and accurate and is clear for all to understand.
Greenhushing: The silent response
In the face of rampant greenwashing, some companies are embracing an alternative tactic known as greenhushing. This approach entails a deliberate restraint in publicising sustainability initiatives, often motivated by fears of potential greenwashing accusations. While greenhushing may seem like a prudent strategy, it can impede genuine environmental progress.