Making authentic ESG claims requires understanding greenwashing
According to Compare Ethics, a UK-based sustainability platform, only one-fifth of consumers trust companies’ environmental claims. Jaded by false promises and vague evidence, it’s no wonder why consumers are increasingly skeptical of brands’ sustainability promises.
This is a problem whether you are working inside a company or consulting companies on their corporate social responsibility (CSR), environmental, social, governance (ESG), or overall sustainability. Regardless, it’s our job to protect companies, the public and the environment at large from the risks associated with greenwashing.
By being well-informed and recognizing greenwashing when we see it, we can do a better job of preventing it before it happens.
What is Greenwashing?
Greenwash is, “disinformation disseminated by an organization so as to present an environmentally responsible public image.”
This trend of distrust has also bled into business-to-business so for companies serving this market, the risks are equally as present.
Dealing with greenwashing effectively requires us to know how to recognize it, understand the risks to any given company (and the world at large), and effectively manage the situation when it arises.
This article will cover:
- 9 Types of Greenwashing
- Tips to Avoid Greenwashing
- The Newest Form of Greenwashing: Predatory Delay
9 Types of Greenwashing Claims
#1 The “Hidden Trade-off” Claim
This form of greenwashing occurs when a company suggests that a product or process is “sustainable” based on only one or two attributes while ignoring other important characteristics.
You might remember when Starbucks made headlines in 2018 by announcing all stores will “eliminate plastic straws globally by 2020” by replacing them with a strawless lid. This announcement came on the wave of plastic straw bans from other corporations like Sea World and Alaska Airlines. Starbucks positioned itself as an innovator in sustainability solutions. The only problem: the replacement lid contained more plastic than the previous straw and lid combined.
Tip to avoid hidden trade-off claims: Educate companies to make comparisons fair and meaningful. Comparisons should be straightforward and compare apples to apples.
#2 The Absence Of Proof Claim
This type of claim is made without proof or accessible supporting information so it remains unsubstantiated, leaving it to the consumer to determine the validity of the claim. Many food and beverage companies realize the benefit of leaning into increased demand for sustainable business practices, which allows for higher price points and increased market share.
In June of 2021, a class action lawsuit against Red Lobster exposed the company’s false and unsupported claims on their menus and website, stating that their seafood was “traceable, sustainable, [and] responsible” and went on to emphasize that their seafood is “sourced with standards”. They named third-party certifications like the Global Sustainable Seafood Initiative (GSSI), but failed to detail any of their suppliers or specify any information on sourcing.
During the (currently pending) lawsuit, information came out that many of their suppliers had harmful practices which endangered the North Atlantic right whale, used industrial fish farming methods, overused antibiotics, and contributed to the destruction of highly valuable mangrove ecosystems, among others. Red Lobster used highly curated sustainability language without any proof or data to back up claims.
Tip to avoid ‘absence of proof’ claims: Strive to provide relevant, robust, and accessible data as evidence when making claims.
#3 The Vague Claim
This claim is so broad or so poorly defined that its real meaning is likely to be misunderstood or misinterpreted by a consumer. For example, buzzwords like “green” “nontoxic” and “environmentally friendly” are broad terms that are both unregulated and vague. Cleaning products have a long history of leaning into the “green” trend.
Clorox’s Green Works products and the company Simple Green are both great examples of utilizing buzzwords to play into a growing demand for healthy household cleaners in the early 2000s. Simple Green utilized “non-toxic and biodegradable” on their label – both of which are unregulated and ill-defined words that signal to the consumer that the product is clean and trustworthy. It wasn’t long before the ingredient 2-butoxyethanol (EGBE) was called out for having carcinogenic characteristics, which are harmful to humans and animals.
Tip to avoid vague claims: Make sure companies are specific and back claims up with third-party verified certifications, like the EPA’s Safer Choice Certification for chemical products.
#4 The Irrelevant Claim
It may be truthful and accurate, but doesn’t tell the whole story. The term “biodegradable” is a perfect example of this type of greenwashing. It may indeed be biodegradable, but it can take a very long time to break down and/or doesn’t mean it won’t hurt the environment in the process.
For example, Redleaf, a Canadian water bottle company, began distribution of “the industry’s first biodegradable and recyclable water bottle” in 2011. They marketed this bottle as a guilt-free way for Canadians to enjoy bottled water in their “100% bio bottle”. While the #1 PET plastic polymer material they used to create this bottle is widely accepted in recycling centers, it does not mean that the plastic will degrade naturally into ecosystems. They claimed it would degrade in as little as 1-15 years, instead of 500. The breakdown of this bottle produces microplastics which threaten a valuable part of the marine food chain. It also requires certain temperatures and other conditions that are unlikely to occur in landfill which makes biodegradable plastic more true in theory than in practice.
Tip to avoid irrelevant claims: Ensure companies (and their internal and external marketing teams) tell the whole story without relying on sustainability buzzwords to convey the message.
#5 The “Lesser of Two Evils”
Organic cigarettes are made with organic tobacco which is farmed without the use of pesticides or artificial fertilizers and they are presented to the consumer in recyclable packaging.
In this case, specific sustainability claims may be true (organic, recyclable) but these claims risk distracting a buyer from more significant sustainability aspects of a product or process. Almost all cigarette butts contain plastic filters. When discarded, these butts decompose into smaller pieces, leaving behind microplastics and chemicals like nicotine, carbon monoxide, and other heavy metals.
Tip to avoid the “lesser of two evils”: Consider the full lifecycle of a product. All aspects of a product’s environmental impact are important, including its component parts, where it is manufactured, its use and performance, and its disposal.
#6 The False Claim
Some claims of social or environmental sustainability are simply false or inaccurate. A 2021 report from the Changing Markets Foundation looked at clothing from major fashion brands to check the validity of their sustainability claims and found that 60% of claims overall were misleading.
H&M was exposed as the worst offender, with 96% of their sustainability claims being false. Their green tags, identifying products as part of the “Conscious Collection”, consisted of more synthetic, fossil-fuel-derived products than their main product line. The company recently was required by regulators to remove sustainability labels from its products and pay $390,000.
Tip to avoid the false claim: Make sure companies use claims that are truthful and accurate that will not mislead consumers for increased market share.
#7 False or Misleading Labeling
Some companies use images, words, or logos that imply environmental friendliness and/or third-party endorsement of their sustainability characteristics, even though no such endorsement exists.
SC Johnson, a major manufacturing company, created their own internal certification to promote less harmful chemicals, the Greenlist Certification and started labeling products like Windex with a green tag. By using false labeling or unverified certifications, SC Johnson misled consumers and increased their market share of products that are actually promoting responsible consumption and production.
Tip to avoid false or misleading labeling: Research third-party certifications and avoid misleading imagery.
#8 Bait and Switch
Some companies have been incredibly public about their commitment to reduce environmental impacts such as carbon emissions, by ramping up their use of renewable energy. Some of these companies in turn donate money to political candidates who vote against climate action bills that try to tackle fossil fuel growth.
Georgia Pacific, a fossil fuel and chemical producer, and Flint Hills Resources, a leading paper product manufacturer, address their commitment to sustainability and stewardship within their industries on the home page of their websites, using vague language like “powering everyday products responsibly” and “sustainability comes naturally”.
While these companies have demonstrated efforts to reduce emissions, both are owned by Koch Industries. Koch Industries, owned by the Koch brothers, have a long history of massive political influence through their advocacy group, Americans for Prosperity (AFP) and support of the American Legislative Exchange Council (ALEC). They have funded campaigns and policies that undercut climate change efforts such as the expansion of renewable energy, fossil fuel exploration limits, and emissions cap.
Tip to avoid the “bait and switch”: Follow the money. Visit Institute for Local Reliance and the American Sustainable Business Network for the latest accountability campaigns against efforts such as these.
This is a newcomer to the world of greenwashing. The term explains the phenomena of large corporations making huge climate pledges that take place in the future. For example, promising “net zero” has been a huge trend among corporations leading up to COP27 (UN Climate Change Conference). Corporations like Coca-Cola (Europacific region) have signed on to The Climate Pledge, founded by Jeff Bezos of Amazon, to join upwards of 350 companies in promising net zero emissions by 2040.
The only problem is that the direct carbon capture technology required to make this happen isn’t scalable just yet. According to a 2021 study by Oxfam, the area of land required for nature-based carbon capture, predominantly tree planting, is larger than we have available without displacing the most vulnerable communities. Future-centric promises allow corporations to do business as usual with false promises built on nonexistent technology and sustainability buzzwords.
Tip to avoid predatory delay: Look at the actions companies are taking today, rather than promises in the future.
For new and even seasoned sustainability experts, staying up-to-date on greenwashing schemes is crucial to combatting climate change. Greenwashing has ramifications beyond being called out on social media. It means a loss of trust, loss of market share, potential leadership turnover, and massive contribution to the climate crisis. If we see a company making false claims or promises, it is our responsibility to warn them of the risks and provide them with alternatives.