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Even the best companies are not immune to greenwashing mistakes! We give a simple definition of greenwashing and explain why it can be very harmful to your business.
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As interest in green marketing has grown (see our article here), so has the use of greenwashing.
But what is greenwashing? Why can it be harmful? How can we avoid it while reducing consumer skepticism?
Green skepticism is the phenomenon of consumers questioning companies' environmental claims.
A company is greenwashing when it orients its marketing image towards an ecological positioning when, in practice, such a positioning does not reflect the company's reality. Basically, companies mislead consumers by presenting results that are not representative of their CSR (Corporate Social Responsibility) actions.
Here are a few examples of greenwashing:
On numerous occasions, companies have claimed that packaging (or even the products themselves) can be fully recycled and made from recycled materials, when in fact this was not the case. For example, McDonald's recently introduced paper straws which were ultimately found not to be recyclable.
Fashion is one of the world's most polluting industries, and the third most water-intensive. By 2050, with current consumption trends, the textile industry will emit 26% of the world's CO2. As one of the biggest players in fast-fashion, Shein has invested millions of dollars in managing textile waste streams in Africa. But at the same time, the company releases between 700 and 1,000 new items a DAY (according to CEO Molly Miao)! Ironically, much of the clothing produced by fast fashion ends up in Africa. Shein therefore makes a major contribution to textile pollution in Africa, but communicates only on its offsetting actions, without seeking to limit its initial impact. It's another form of greenwashing: without lying about what they've done, they hide the most important part of their impact.
While greenwashing can be profitable in the short term, it can be very dangerous in the long run. Firstly, when the public discovers it, it significantly affects brand reputation. It can also lead to heavy legal penalties, as more and more countries are introducing regulations on greenwashing. In France, for example, greenwashing can be punishable by two years' imprisonment and a fine of 300,000 euros, which can be increased to 80% of the expenditure incurred in greenwashing advertising.
One of the most famous examples of a greenwashing campaign gone wrong was Volkswagen in 2015. The company was selling "low-emission" cars with green marketing campaigns (which turned out to be greenwashing). After an investigation, the world discovered that Volkswagen was cheating on the emissions tests of its "green cars" and that their engines were up to 40 times more polluting than what was allowed in the US at the time. The consequences for Volkswagen were as follows:
In total, this represents more than half of their 2014 profit(12.7 billion euros).
As green skepticism grows stronger every day, consumers tend to provoke investigations into green claims, putting pressure on companies. And at the same time, government regulations are also putting pressure on companies to protect the environment and consumers. It is therefore increasingly likely that greenwashing of any kind will be quickly uncovered. Hence the need to develop ethical and sustainable business models.
Greenwashing regulations apply to all companies, not just those with voluntary greenwashing policies, but also those that are highly exemplary in their commitment to sustainability, like Patagonia, for example.
From the outset, Patagonia has focused on sustainability, reducing the consumption and waste of its products by limiting environmental impact and maximizing the use of organic and recycled materials. However, even with this spirit, they have fallen into the trap of greenwashing without even realizing it!
In 2022, the company sent out a newsletter with the headline "How to protect the oceans with clothes this summer?". It's true that Patagonia is reducing the impact of its products and limiting ocean pollution thanks to recycled materials and actions taken to protect the oceans. However, buying products will NEVER protect them, and making consumers believe this is the case is a form of greenwashing.
The balance between having a powerful marketing message and being transparent makes it difficult to draw the line between green marketing and greenwashing. But even unintentional greenwashing is still greenwashing, and requires extra care to ensure the reliability of data shared with customers.
It's important to move companies' business models towards sustainability. They are already being driven to do so not only by consumer behavior, but also by government regulations. What's more, there are many successful examples of companies that started out with a sustainable approach, or have added a CSR slant over the years to make it a structuring element of their strategy. And today, what could be better than a combination of an ethical and ecological business model, a stable company and one that is trusted by its committed consumers?
Nevertheless, creating a truly sustainable business model requires a few steps and time. Here are some simple, actionable tips for avoiding greenwashing:
1. Understand the global impact of your company and products before you communicate:
This will enable you to avoid taking and communicating on insignificant actions.
2. If you're in the consumer goods industry, try to be as precise as possible about the impact of your products, which account for 90% of your carbon footprint in scope 3.
3. Review what you're doing with external, independent experts, to avoid any bias brought in by your company.
4. Be clear about your goals and targets: it's highly unlikely that you've done all you can in terms of reducing environmental impact, so try to be transparent about what you were doing, what you're doing now and where you want to get to.
5. When communicating, avoid using terms in your headlines that are not precise and may even be prohibited in some cases (for example, it is now illegal in France to use the term "carbon neutral" without explaining exactly how you arrived at this conclusion).
6. Always make available to everyone the explanation of how you arrived at the result: the more transparent you are, the less likely you are to fall into the trap of greenwashing!
On the Waro side, the platform allows you to take several steps towards this sustainable and transparent approach. You can calculate the environmental impact of your products over their entire life cycle (LCA) and communicate your results on your website, print QR codes for your labels, or even use the data for your CSR reports. Our software is based on globally recognized standards, which can help convince consumers and eliminate the green skepticism that is emerging with the increase in greenwashing.
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