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The science is clear on climate change, with human activities like greenhouse gas emissions leading to wrapping the planet in pollution. This is leading to severe consequences, like intense storms, droughts, floods, and even contributing to heatwaves and fires in Australia.
To limit climate change, and preserve earth—emissions will need to be cut down by half by 2030. The time to take action on this is now, and corporate greenwashing is undermining efforts to address the climate crisis and reduce emissions.
If you work in economics or are studying a qualification, like a Graduate Certificate in Financial Planning, it’s paramount to understand greenwashing and why it’s raising concerns. It is a deceitful and harmful branding tactic that contributes to climate change and is unlawful for businesses.
What is greenwashing?
The Australian Competition & Consumer Commission (ACCC) describes greenwashing as ‘a term to describe making false or misleading environmental claims.’ An example of this could be omitting information about a product, making it seem better for the environment than it is.
Greenwashing has become a significant obstacle in tackling climate change. This is because it misleads the public and investors into supporting a company that isn’t actually taking action to prevent the climate crisis, and detracts from actual solutions.
Greenwashing becomes a massive issue when businesses around the world are using it to improve their image and for financial gain. Even major companies, like Volkswagen and Coca-Cola have been called out for greenwashing.
Common greenwashing tactics
There are various ways a company can go about greenwashing. Some greenwashing tactics are more obvious, whilst others are a bit more discrete. We’ve covered common greenwashing tactics employed by companies around the world.
One of the most common ways a company employs greenwashing is by being purposefully vague or non-specific. This could be concerning certain practices, like the company’s operations or where they get the materials for their products.
A company can also use greenwashing by claiming to avoid illegal or non-standard practices that are irrelevant to their own product—it’s misleading.
A company could be claiming to be on track to reducing their emissions to net zero with no credible plan being put in place. This would look good for investors and be misleading the public about environmental sustainability when nothing is being done.
Applying intentionally misleading labels that don’t have standard definitions. A good example of this is adding ‘green’ or ‘eco-friendly’ to a product, which can easily be misinterpreted.
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Examples of greenwashing
Greenwashing has become a massive problem in all industries, from cars to clothing, and even finance. Even industry leaders, like H&M, IKEA, and Volkswagen, have been under criticism for greenwashing.
H&M, Zara, and Uniqlo are among many fast-fashion companies that have been caught greenwashing for years. These companies have been contributing to massive amounts of textile waste despite advertising green initiatives.
For example, H&M features a clothing line called ‘Conscious’. It has a ‘mission’ that is a ‘selection of sustainable fashion pieces that make you both look and feel good.’
H&M was then criticised by the Norwegian Customer Authority because it was ‘misleading’ marketing. This was because the ‘Conscious’ line of clothes heavily relied on marketing about its environmental benefits, without providing any sustainability details.
Another popular example is the car manufacturer, Volkswagen. Whilst running public campaigns about low-emissions and eco-friendly features in their new vehicles—they were cheating emissions tests.
Volkswagen was fitting its cars with software that could detect when it was undergoing an emissions test and alter its performance to reduce emission levels. In reality, the engines were emitting up to 40 times the allowed limit of nitrogen oxide pollutants.
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Current regulation
Australia is a country striving for a future with net-zero carbon emissions. As part of this, there are several regulatory bodies in place for investigating greenwashing. If you see a company employing greenwashing, it can also be reported.
The Australian Securities & Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) are the two main entities responsible for investigating. This is because greenwashing, along with being detrimental to climate change measures, can also lead to unethical financial and reputation benefits.
Greenwashing is also outlawed by the Australian Consumer Law (ACL), and legal consequences can apply to businesses engaging in it. The consequences depend on the severity of the offence, resulting in fines and warnings.
Avoiding corporate greenwashing
Not all acts of corporate greenwashing are intentional. Sometimes, a business can mislead customers or potential investors by accident. Here are tips we recommend if you’re looking to avoid accidental greenwashing in the workplace.
Ensure all the business’s claims are truthful and are backed up by evidence. If a business is claiming that, for example, product packaging has zero impact on the environment—this needs to be clarified clearly, 100% true, and also have scientific evidence to back it.
Communicate clearly with easy-to-understand language. Using clear language is important, as most consumers don’t have specialist or industry knowledge when it comes to technical terms.
Any graphics used on packaging or marketing shouldn’t give the wrong impression. Visual elements can influence a consumer’s impression of a product, including the environmental impact.
Avoid elements that can give the consumer the wrong idea about how sustainable your product is. For example—adding a huge recycling logo on the box for a product when only one or two components are actually recyclable is misleading.Be transparent about the company’s eco-friendly practices and sustainability. The best way to avoid accidental corporate greenwashing is to be honest and transparent with your customers, sharing data and information on how their practices impact the environment.
What to do as a consumer
From the consumer side, there are a few things you can do to stop supporting greenwashing and contribute to sustainable practices. These include:
When possible, take the time to research the company and product they’re selling.
When shopping for a product, consider its life cycle and whether it’s recyclable.
Look for companies that are transparent and accountable for their sustainability practices.
If you spot a business employing greenwashing tactics, report it to regulatory bodies like ASIC or ACCC.
Original Source of the original story >> Businesses Beware: A Guide to Corporate Greenwashing
