Greenwashing: How it Works & What it Means for Us

By Cameron Barnes

“Greenwashing” is a term heard everywhere from news segments to clothing advertisements. It has become a staple in the discussion around building sustainable business models and the corporate response to climate change. But what is it, really? And what can we do about it?

What Is It?

Greenwashing refers to marketing strategies that emphasize a company’s positive impact on the environment despite that company’s failure to follow environmentally-friendly practices. The term describes the disconnect between what companies promise about things like emissions and sustainability and what they are actually doing. Sometimes, companies engage in these misleading practices entirely by accident. Other times, however, they are a part of a bigger marketing strategy.

According to this article by The Guardian, “greenwashing” as it is used today was first coined by environmentalist Jay Westerveld in 1986. He observed that the rhetoric used by hotels around towel usage painted a troubling picture of their overall impact on the environment. These hotels would ask guests to reuse their towels “to help them save the environment” at the same time that they were expanding locations and using inefficient energy systems. Ultimately, reusing a towel would have very little impact on the hotel’s ecological footprint. The “concern” about the environment was comforting for guests to hear, but was ultimately an empty gesture.

Some Examples

Since then, “greenwashing” has been used to talk about a number of similar situations. For example, in 2015, the EPA found that Volkswagen had designed a device to help them cheat on their cars’ emissions tests. While their advertising campaigns centered around their environmentally friendly engines, the reality was that the cars actually emitted up to 40 times the legal limit of pollutants. In another example, oil distributor BP created a new campaign around their commitment to the environment, which included adding solar panels to gas stations.

However, in that same year, BP spent more than 96% of its budget on oil and gas with little investment in sustainable initiatives at all. Finally, chemical company DuPont launched their double-hulled oil tankers with a series of ironic advertisements that included marine life jumping, clapping, and living happily alongside it.

More recently, greenwashing has become less overt. Now, it mainly operates within legal loopholes and wording nuances. This is one of the biggest issues in tackling greenwashing – there are a variety of ways that it can be defined, and it is easy for companies to avoid responsibility in the weeds of technicalities.

The Impact of Greenwashing

Greenwashing damages both companies and consumers. By making it seem like they are following environmental regulations when they’re really not, businesses can escape being held accountable for destructive practices. These practices can continue to cause serious harm to the environment as long as they go unchecked.

Furthermore, when these businesses are exposed, they tarnish the reputation of other “environmentally friendly” programs and practices. Even though other companies might really be living up to their claims and marketing appropriately, greenwashing lessens their impact. Because some companies have not been truthful about their sustainability, the “green” label means less. This causes a harmful domino effect; when sustainability doesn’t factor into customer decisions, there is less incentive for businesses to follow environmental guidelines. At the same time, truly sustainable companies lose one of their core marketing platforms.

Greenwashing also hurts the greenwashers’ reputation. Fallout from exposed greenwashing can impact profits for years. In a report from Reuters, Volkswagen admitted a loss of €31.3 billion after its 2015 emissions scandal. When it comes to greenwashing, no one wins.

Why Greenwash?

There are a number of factors that go into greenwashing. An interesting study by the University of California Berkeley outlined how these factors span both governmental policies and individual psychology.

Some of these influences, such as “lax and uncertain” legal regulations, help to enable companies to escape serious repercussions in response to their greenwashing. More personal considerations, like individuals’ optimistic biases, can also make people more likely to believe greenwashed advertising.

On a macro-level, the push to greenwash also reflects a shift in attitudes around the importance of the environment. People are becoming more aware of the realities of the climate crisis and their role within it. As a result, there is an increased demand for responsible business practices. Companies greenwash in order to capitalize on this demand without generating any real or meaningful change.

What Can We Do?

Being an informed consumer is one of the best tools against misleading advertising. It can be difficult to identify greenwashing, but a helpful rule of thumb is that businesses that are greenwashing their products don’t provide evidence to back up their sustainability goals. If information about specific programs can’t be found on their advertisements or website, the company might not be trustworthy.

If you have the time, reading about specific companies from third party reporters can also be a good way to fact-check claims. Additionally, keep an eye out for EPA certifications on things like pesticides and vehicles. The EPA provides extensive testing for certain products to make sure that they pass environmental regulations.

Political action can also be a powerful source of change. Writing to a local representative about concerns about the climate can encourage more environment-friendly legislation. In the same way, getting involved with other like-minded people in community groups, protests, and organizations can help spread both awareness and action.

Everyone can be a part of preventing greenwashing and its damaging effects. At Business Connect, we understand the power of awareness and informed decision-making, especially when it comes to environmental impact. If you are interested in learning more about spreading awareness on the climate crisis or corporate responsibility, consider becoming a Business Connect affiliate. We are here to support you as you make meaningful change on both a personal and global level in a sustainable, transparent way.