What is greenwashing? Why is it hard to spot?

What is Greenwashing? 

Greenwashing is when companies make false or misleading marketing or PR claims about the environmental impact of their products, business practices or other initiatives.  

Why would companies lie to their customers? One of the reasons is there’s simply more demand for sustainable products. Sixty-two percent of Generation Z shoppers prefer to buy from sustainable brands. 

Companies try to paint the picture that they’re satisfying this demand. They make claims that suggest they are doing their part. But without clearly defined goals, benchmarks, and measurements of impact, these claims are essentially meaningless. 

 

Why is greenwashing a problem? 

Greenwashing is a problem because it sometimes works. As a consumer, you feel you’re making a better choice by buying soda from a “recycled plastic” bottle or “carbon neutral” gas to fill up your car. In the end, these products can have the same or worse impact as their conventional counterparts.  

With problems like plastic waste and climate change looming, we need real transparency from companies. It’s important to ensure that our consumer choices aren’t just an expression of wishful thinking. 

 

Is greenwashing illegal?

According to consumer protection laws from the Federal Trade Commission (FTC), it’s illegal for companies to mislead consumers about the impacts a product or company has made. This is legally classified as fraud and deception. 

It’s the same for all industries, but the FTC has created specific guidelines for environmental claims, because it’s an area where fraudulent claims are commonly used in marketing. 

 

What is greenwashing in marketing?

The FTC’s Green Guides provides a set of guidelines about environmental impact claims to help brands avoid mischaracterizing their environmental impact. It provides the following “general advice”: 

• “Marketers should not make broad, unqualified general environmental benefit claims like "green" or "eco-friendly."  Broad claims are difficult to substantiate, if not impossible.”
• “Marketers should qualify general claims with specific environmental benefits.  Qualifications for any claims should be clear, prominent, and specific.”
• When a marketer qualifies a general claim with a specific benefit, consumers understand the benefit to be significant.  As a result, marketers shouldn't highlight small or unimportant benefits.
• If a qualified general claim conveys that a product has an overall environmental benefit because of a special attribute, marketers should analyze the trade-offs resulting from the attribute to prove the claim.

 

How to make specific environmental claims 

The best environmental claims are specific, measurable, and certified by an independent, third-party organization that can validate a company’s metrics. This goes for the use of organic farming methods, greenhouse gas emissions reductions, water use reductions, and carbon offsets. 

 

Why relevant environmental claims matter

The Green Guides also emphasizes the importance of choosing relevant details to highlight. This brings up the issue of whether companies should highlight their environmental philanthropy, when their core product or service has a detrimental impact on the environment. 

Various companies have used philanthropy and bulk sums of donation amounts to show their support for environmental causes. But reporters have helped to qualify these impressive sounding claims by giving them context. 

 

Environmental language clarity

The FTC provides specific advice on a list of terms and strategies that are often misused or mischaracterized in marketing:

• Carbon offsets
• Certifications and Seals of Approval
• Compostable
• Degradable
• Free-of
• Non-toxic
• Ozone-safe and Ozone-friendly
• Recyclable
• Recycled content
• Refillable
• Made with renewable energy
• Made with renewable materials
• Source reduction

 

What is an example of greenwashing?

Many environmental groups have accused fossil fuel companies of greenwashing in their advertising. The problem is their ads exaggerate the importance of their environmental expenditures. They also rely on unverified carbon dioxide reduction approaches like carbon offsetting and carbon capture technologies as their primary climate “solutions.”  

Recently, three large environmental organizations--Global Witness, Greenpeace, and Earthworks--filed a lawsuit with the FTC over Chevron’s use of greenwashing in its ads. They claim that, “despite Chevron’s ads touting its investment in renewable energy, the company spent just 0.2% of its annual capital expenditure budget – roughly $26 million a year - on lower-carbon energy sources.” How the FTC will address this claim is yet to be seen.    

Chevron isn’t the only fossil fuel company getting scrutiny for its ads, though. The organization Clientearth.org started creating files on a longer list of fossil fuel companies to spotlight their environmental claims. 

Clientearth cites Exxon Mobil’s natural gas advertising as misleading because they claim it supports renewable energy. Not only is this false, because natural gas often competes with renewable energy sources, the recent IPCC Assessment report warned about the dangers of methane leaks caused by natural gas production for global warming. 

Methane heats the atmosphere roughly 84 times more potent than CO2 in the first 20 years after it’s emitted, so natural gas production shouldn’t be touted as “part of the solution” to climate change. 

 

Is Greenwashing part of CSR?

The world’s largest companies report their Environmental, Social, and Governance metrics in their annual corporate social responsibility (CSR) reports. These reports are used by investors and governments to understand our overall progress towards the Paris Agreement goals, and to make investing decisions. Specific verified facts and statistics can also then be repurposed in corporate marketing materials.  

The problem is that with the current CSR reporting standards, companies aren’t required to report in a specific format, and the information they disclose is voluntary. Therefore, there are huge discrepancies about the quality and depth of the information available in these reports. 

A new AI tool called ClimateBert was launched to examine the level of greenwashing within CSR reports of the world's top 800 companies. It found that the reports lacked the crucial element of relevance called for by the FTC’s Green Guides. The analysis suggests that companies often cherry-pick their data to look good on paper without real improvements to the core business when it comes to climate change related disclosures. 

 

How to spot greenwashing and call it out 

It can be very difficult to sort out the fiction from the facts. Here are some common ways brands try to appear more green than they really are. You can check companies’ CSR reports, ads, or product labels for these different forms of greenwashing. 

 

Distracting activities

If a business mainly earns its income from environmentally polluting activities, any additional action it takes to offset its carbon emissions, donate to environmental organizations, or develop secondary clean fuels or energies does make up for the harm done by the primary activity. 

For example, Amazon’s $10 billion Earth Fund awards $1 billion per year to organizations minimizing the impact of climate change. However, this is only a tiny fraction of Bezos’ net worth: $191 billion, and Amazon’s own carbon dioxide emissions grew 15% in 2019. 

 

Vague language

Words “clean,” “pure,” “natural,” and “sustainable” are all hard to prove or quantify. Compare these to a phrase like “USDA certified organic,” which has a very specific definition. Look for exact claims with third-party verifications. 

 

Aspirational commitments

Many companies these days are making net-zero commitments for the future, but these are often 30 years away. Such a large time span gives no indication that a company really intends to make necessary changes in its short-term planning. Look for the actions that brands are taking today. 

 

Slippery slope claims

Companies can get carried away with the significance of their impacts. Watch out for a company using broader global claims to sell its own specific product.  

 

Images of pristine nature

Companies producing agricultural products like butter often depict happy cows in green pastures on their labels, when the reality of factory farming looks much different. 

 

Lack of proof

Sometimes brands knowingly make false marketing claims in hopes that no one will catch them. The way to uncover the lies is by seeking proof for these claims. If something sounds too general, or too good to be true, try to investigate or reach out to the brand with your questions. 

 

Best-in-class 

When you think of fast fashion brands making an environmental impact, H&M might come to mind. It highlights its eco-friendly lines, whereas other fast fashion brands are doing nothing. 

But when you consider the scale of H&M’s smaller eco-friendly Conscious collection compared to its overall production, the impact is quite small and the fast fashion industry still needs to be transformed. 

 

Case in point

Beyond this, H&M has recently collaborated with Billie Eilish to produce a “sustainably produced” line, without providing clear details on its claim.  

In fact, only 2 of the 16 pieces in the line are made of organic cotton. Yet, no details on the organic cotton certification or source are included on the brand’s website. This also means 87.5% of the pieces are synthetics like polyester, which we don’t consider sustainable.  

In this case, it seems the company wanted to appeal to a younger audience, by pairing a pop music fashion icon with vague and misleading terms, in other words: greenwashing. Hopefully, brands will start to realize younger people do their research and aren’t that easily duped. 

 

Call it out

When you see greenwashing in advertising or CSR reports, you should tell the company or brand using social media. Comment on their ad or tag them in a post you write. Drawing more attention to this issue is super important. It’s a way of demanding transparency from brands regarding their serious contributions to our environmental crises. 

 

Read more on greenwashing here: ClientEarth.org explains how greenwashing makes it even more likely to pass climate tipping points that put us on the path to irreversible environmental challenges.