What Is Greenwashing In Business And How Do You Avoid It?

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A company’s sustainability policy is becoming a key factor in a customer’s buying decision. But a lot of businesses get it wrong when it comes to advertising their green status.

Greenwashing in business has increasingly become a hot topic in recent years, as businesses outwardly demonstrate they’re helping the planet, without being totally transparent about the full impact of their actions behind the scenes.

Key Points

  • Effectively, greenwashing happens when a business is spending more time talking about sustainability than taking action towards it.
  • Businesses may have good intentions when they greenwash, but they might not be looking at the bigger picture.
  • There are plenty of PR teams who have had to deal with the fallout from greenwashing, and there are lots of examples of companies who have been publicly shamed for it.
  • There are ways to avoid greenwashing, such as being honest, open and communicative with your audience or customers.

What is greenwashing?

Greenwashing is what happens when a company appears to be taking environmentally-friendly actions to help the planet but isn’t actually doing anything significant towards sustainability.

For instance, their marketing might show how green their products are, but companies in their supply chain could be producing huge amounts of pollution.

Effectively, greenwashing happens when a company is spending more time talking about sustainability than taking action towards it.

The term has been used in recent years to draw attention to businesses whose processes don’t align with their eco-friendly marketing. But it was coined by Jay Westerveld in 1986 when he was travelling in Fiji. He noticed that hotels were encouraging visitors to reuse their towels for the good of the environment, when in fact, they were making plans to expand their resort, taking away more of the precious natural resources around them. It also helped to reduce the hotel’s laundry costs, which benefitted the company, more than the planet. Their words just didn’t align with their actions.

As sustainability has become increasingly important, consumers expect the companies they’re buying from to be doing their bit for the planet and are savvier when it comes to greenwashing.

Why do businesses greenwash?

Businesses may have good intentions when they greenwash, but they might not be looking at the bigger picture.

Marketing teams in larger organisations, for instance, may be eager to share news on the business’ sustainability efforts without the full knowledge of the company’s green credentials.

A staggering 29% of consumers believe that brands use environmental claims as a ‘marketing ploy’ which shows the suspicion with which they view the companies they interact with. It’s important that businesses understand their environmental responsibilities, but also the public attitude towards them.

Our resident green skills consultant and IEMA trainer, Rachael Gooding, discusses greenwashing and how to avoid it in the TSW Training Learn, Practice, Perform podcast. Listen to her tips @20:30.

How to spot businesses that are greenwashing

Greenwashing can be quite tricky to spot without digging deep into the background of a company and its environmental footprint.

However, products that make use of green packaging and images such as plants may be highlighting their eco-friendly aspects to customers, while concealing the impact they’re having on the planet. This isn’t the case for every product but doing a bit of research will help you see whether there are any inconsistencies between the company’s marketing and the data they have to back it up.

The use of terms such as ‘eco-friendly’ or ‘made using natural materials’ could be an example of greenwashing if there isn’t any solid evidence to support this. It could be that a shirt is made with a small amount of natural materials but the company pushes this agenda, using vague terms to make you think you’re purchasing a sustainable product.

If you’re unsure whether greenwashing is happening, be sure to do your due diligence to check, rather than taking things at face value.

A new term on the block – Greenhushing

Unlike Greenwashing, whereby companies make exaggerated claims about their environmental efforts, Greenhushing is when companies choose to not fully communicate their sustainability efforts, thus avoiding scrutiny.

How can greenwashing harm a business’s reputation?

There are plenty of PR teams who have had to deal with the fallout from greenwashing, and there are lots of examples of companies who have been publicly shamed for it.

In April 2022, HSBC was accused of greenwashing by highlighting its green initiatives in the banking sector, such as investing $1tn to help their clients’ transition to net-zero, without mentioning the other companies they fund, that produce vast amounts of greenhouse gases.

Due to complaints, the Advertising Standards Authority (ASA), is investigating the case and may order HSBC to include information on its carbon footprint in future adverts. They believe that people may have unwittingly banked with HSBC, without fully understanding how much of an impact HSBC and its associates were having on the environment.

These sorts of high-profile cases are becoming more common as authorities crack down on greenwashing and the publicity can damage a business’s reputation as consumers lose trust in the brand. Any adverts around sustainability need to be honest and transparent with customers to have the best chance of securing their loyalty.

How do businesses avoid and overcome greenwashing?

Greenwashing doesn’t have to be an issue within your business.

There are a few ways you can steer clear of it:

  • Increase the green skills within your team – Training your staff up with green skills programmes, such as these IEMA courses, can help everyone to get on the same page when it comes to sustainability and be mindful of greenwashing statements.
  • Make a genuine effort to be a sustainable brand – Bring in a consultant or train your current team to recognise processes that can be more environmentally friendly. By acknowledging your shortcomings when it comes to sustainability, it’s easier to take responsibility and bring in new processes that make a positive difference.
  • Make your entire supply chain sustainable end-to-end – Doing so will help you know exactly where things are being sourced and what processes are in place, so you can have an idea of the bigger picture whenever you share facts and figures on your sustainability efforts.
  • Life-cycle analysisThink about the entire lifecycle of your product and work with organisations that can help you recycle your waste. There may be new initiatives you can get involved with, like Clean The World which provides unused hotel soap to people in need of basic hygiene items.

Three useful tips to avoid your business greenwashing

Being honest and transparent with your audience is key to avoiding greenwashing. Your customers will respect the effort you’re making to take full accountability for your carbon footprint.

Here are some other tips to be aware of:

  • Be careful of misleading imagery – Images of green, open spaces, and blue, crystal waters that give a green impression, but aren’t accurate, could dupe a customer into thinking you’re more sustainable than you are.
  • Don’t be a hypocrite – Be sure to get the whole picture before you put statements out there about your sustainability efforts. If you talk about reducing your carbon footprint but use a supplier that contributes to deforestation, you could be seen to be greenwashing.
  • Be clear and precise – Try to avoid making vague statements that could be misconstrued. Instead, keep all of your communications clear, precise and transparent to reduce the risk of greenwashing.

Take a look at the list of the IEMA courses & training programmes we offer to help you get your team up to speed:

If you’re unsure which course is right for you, get in touch with our friendly team at TSW Training.

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