In the world of sustainability, the term “Greenwashing” is mentioned constantly and used in different scenarios. The term is not a new one but similarly, it is not a clear one either, so here is my take on the term and what it means.
What is Greenwashing?
Greenwashing is a marketing tactic that exploits the environmentally conscious. They are a series of green initiatives that global corporations undertake. It is a series of green initiatives global corporations undertake that lack a thorough and reliable measure of impact. The only reason corporations embark into these initiatives is to silence their environmentally conscious consumers, employees and investors otherwise they risk brand reputation damage.
Greenwashing example: McDonald’s
In 2018, McDonald’sreplaced their plastic straws for paper alternatives across the UK and Ireland. The change was pushed by the environmentally conscious consumer following a UK petition signed by ~500,000 people. However, in August 2019, leaked internal communications exposed the straws as non-recyclable. This is an example of greenwash. McDonald’s played to a consumer need but did not deliver all the environmental benefits claimed.
Even if the straws were recyclable, is this substitution significant, or is it a distraction from McDonald’s other environmentally questionable operations? E.g. the deforestation of the Amazon rainforest.
Ideally McDonalds, and Coca-Cocla who followed with a similar initiative, should have invested in Research and Development (R&D) to come up with a groundbreaking alternative seeing that they have the finance. However, as R&D is expensive all global corporations resolve to the easier and most cost effective solution.
How damaging is greenwashing to business?
Greenwashing doesn’t really help our environment therefore I believe it is a waste of resources and not really helping the businesses grow. If anything it is an indication of short-term thinking in business and carries the following negative consequences:
- Prosecution by the Federal Trade Commission (FTC). The FTC designed Green Guides to help organizations avoid making environmental claims that mislead consumers.
- A tarnished business reputation and a negative brand image.
- Exposing consumers to environmentally damaging products.
- Its tactics may provide delusional short-term benefits, but at the end of the day, will contribute to the demise of non-ESG compliant businesses.
- The shifty nature of greenwash also makes organizations vulnerable to risks such as a tarnished brand reputation and poor long-term performance.
How can businesses prevent greenwashing?
We need to first fully understand greenwash, and one of the ways to do is to read the Business for Social Responsibility (BSR).
Next, we need to consider the below 4 tips to prevent corporate greenwash, as outlined by the BSR Understanding and Preventing Greenwash: A Business Guide:
- Track traditional and new media coverage: In this new age of user-generated information, companies have less media influence. But, consideration needs to be taken regarding what the general public perceives as greenwash to avoid mistakes.
- Make sure it’s real: Base communications on real, significant impacts. If initiatives are a small portion of a company’s efforts, done for the sake of reputation, this is greenwash.
- Build internal and external support: Understand stakeholder views across multiple company functions, e.g. strategy, procurement, design, government affairs and marketing. Initiatives must be aligned with these multiple functions, to understand what is most important to convey in communications.
- Communicate accurately: Focus on clarity and transparency, and drop the self-aggrandizing voice. Work with an external communication agency to communicate effectively.
When speaking to several environmentally conscious consumers it was clear that they are not against corporations trying their best to be more ESG focused. Instead they are challenging them on their lack of R&D and innovation to come up with more measurable and impactful solutions.These corporations are extremely complex and would need at least 20+ years to become completely green. For instance, look at Danone who announced they have dedicated 15yrs to be B-Corp Certified. This is a huge commitment not every organisation is willing to take on, as the process is extremely complex. Also which aspects of the business would they start this journey from? This is the million $ question.