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Updated Jul 02, 2024

What Is Greenwashing?

Ensure that you aren't making false claims that your company or products are environmentally friendly, which can damage customers' trust.

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Carlyann Edwards, Staff Writer
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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Consumers now expect businesses to take proactive measures to protect the planet and people, which means brands must demonstrate their commitment to sustainability in a tangible way. According to estimates from Statista, 44 percent of consumers are more likely to buy from a brand that prioritizes sustainability. That means brands that fail to do so are potentially leaving money on the table. 

However, exaggerating your commitment to sustainability can backfire and cause lasting damage to your brand’s reputation. By misrepresenting what your company is doing to protect the environment and build ethical supply chains, you could lose your customers’ trust for years to come. This practice, known as greenwashing, should be avoided at all costs.

What is greenwashing?

Greenwashing is when an organization invests in marketing campaigns that position the company as environmentally friendly rather than actually minimizing its environmental impact. It’s a deceitful marketing gimmick used by companies to exaggerate their environmentally friendly actions. It is intended to mislead consumers who prefer to buy goods and services from environmentally conscious brands.

Where did the term “greenwashing” originate?

Environmentalist Jay Westerveld coined the term “greenwashing” in 1986, in a critical essay inspired by the irony of the “save the towel” movement in hotels that had little impact beyond saving hotels money in laundry costs. The idea emerged in a period when most consumers received their news primarily from television, radio and print media, so they couldn’t fact-check the way they could today.

Companies that have engaged in greenwashing on a wide scale have made headlines over the years. In the mid-’80s, for example, oil company Chevron commissioned a series of expensive television and print ads to broadcast its environmental dedication. But while the now-infamous “People Do” campaign ran, Chevron was actively violating the Clean Air Act and Clean Water Act, as well as spilling oil into wildlife refuges.

Chevron was far from the only corporation making outrageous claims. In 1991, chemical company DuPont announced its double-hulled oil tankers with ads featuring marine animals prancing in chorus to Beethoven’s “Ode to Joy.” It turned out that the company was the largest corporate polluter in the U.S. that year.

Did You Know?Did you know
A survey found that 83 percent of Americans are concerned about the environmental impact of the products they buy and say it's important for companies to design more environmentally friendly products. If most Americans want to buy from sustainable companies, brands ignore it at the cost of their own profits.

How greenwashing harms a brand’s reputation

Greenwashing has changed over the past 20 years, but it’s certainly still around. It’s easy to see why marketers are enthusiastic: According to Statista, 64 percent of Gen Zers and 59 percent of millennials are willing to spend more on a product if it comes from a sustainable brand. But greenwashing can also have serious consequences, including the following:

  • Loss of consumer trust: Lost consumer trust is hard to rebuild. Even a simple mistake could require years of effort to undo. Estimates from Statista suggest that when consumers lose trust in a brand, up to 40 percent stop buying from that company and begin shopping with competitors. Therefore, being honest and accurate about your sustainability efforts is vital to your bottom line.
  • Lawsuits: Brands that are caught misrepresenting their sustainability efforts could be subject to a specific type of false advertising lawsuit known as “greenwashing litigation.” It’s not only outright lies that can make a company a target for these types of lawsuits; inflated claims about sustainability efforts could also put a business at risk. The costs of these lawsuits alone are enough reason to make sure you’re being precise when describing your company’s sustainable practices and corporate social responsibility.
  • Lost partnership opportunities: Valued partnerships that improve your business’s sustainability may be harder to come by after you’ve been called out for greenwashing. Recovering from such an episode is already difficult and requires partnerships with advocacy organizations, nongovernmental organizations and other groups that can help you demonstrate a real commitment to sustainability and righting past wrongs. But if you’ve had a public greenwashing scandal, you may find it difficult to earn the trust of those same institutions you need to work with to repair your brand reputation.

These consequences can be so steep that it’s never worth it to engage in greenwashing. 

FYIDid you know
Greenwashing has a cost. According to the World Resources Institute, more than half (53%) of U.S. consumers "sometimes" or "never" believe companies' environmental claims.

How to avoid greenwashing

Here are 10 basic greenwashing tactics to avoid:

  • Fluffy language: Don’t throw around words or terms with no clear meaning (e.g., “eco-friendly” or “natural”).
  • Green products versus dirty company: Watch out for hypocrisies, such as efficient light bulbs made in a factory that pollutes rivers.
  • Evocative pictures: Don’t use branding images that give an unjustified green impression (e.g., flowers blooming from exhaust pipes).
  • False designations: Look out for obvious attempts to “green” a dangerous product to make it seem safe. (Eco-friendly cigarettes, anyone?)
  • Imaginary friends: Don’t use a label that looks like a third-party endorsement but is actually made up.
  • Outright lies: Never use totally fabricated claims or data.

There are plenty of socially responsible businesses telling their environmental stories to the world, and even some that aren’t but should be. Incidents of “pure greenwash” — purposeful untruths about a product’s impact — aren’t widespread. However, many examples come close. 

Some corporate buzzwords commonly used to greenwash could be seen as a “slippery slope,” and companies should educate their marketers on the ethics of green branding. This sort of training can help avoid the unintentional greenwashing that comes from exaggerating or misrepresenting your sustainability practices out of an innocent-but-overeager effort to spread the word.

Key TakeawayKey takeaway
Consumers have deep relationships with brands they trust. Even if you've built a powerful brand, nothing destroys trust in a business more than consumers realizing it has been lying to them about something they care deeply about.

Tips to avoid inadvertent greenwashing

Use the following strategies to ensure that your company is not greenwashing.

  1. Make your claims clear and easy to understand. Include details such as specific units of measurement (e.g., “70% organic cotton” rather than “made with organic cotton”) and specific certifications and verifiable endorsements from credible third-party eco-organizations, such as the Sierra Club.
  2. Back up your sustainability claims with data. Keep current data available, and update it on your website and anywhere else you make sustainability claims. Only use data that can be verified. If possible, include credible third-party certification from sources such as the Carbon Trust Standard, the Forest Stewardship Council, the Rainforest Alliance, or Energy Star.
  3. Compare apples to apples. When comparing your product’s sustainability to a competitor’s, make sure they are the same product type so you’re not misleading consumers.
  4. Clean up your operations. If you want to market your products as eco-friendly, you need to walk the walk by making sustainability part of your business model. Institute sustainable practices in your manufacturing, waste disposal and distribution operations.
  5. Be honest about your brand’s sustainability practices and plans. Inform consumers about how green your individual products and your company’s sustainability practices are. When discussing plans or goals, be specific about your targets and timelines so consumers can hold you accountable.
  6. Make sure images on ads and packaging are not misleading. Don’t use the color green or images from nature, like trees and flowers, to imply that your products or brand are eco-friendly if that’s not the case.
Did You Know?Did you know
Along with prioritizing sustainability, corporate social responsibility includes instituting workplace ethics and participating in philanthropic efforts.

Difference between green marketing and greenwashing

There’s a fine line between green marketing and greenwashing. Unlike greenwashing, green marketing is when companies sell products or services based on legitimate environmental positives. 

Green marketing is generally practical, honest and transparent, and it means that a product or service meets the following criteria:

  • It’s manufactured in a sustainable fashion.
  • It’s free of toxic materials or ozone-depleting substances.
  • It’s recyclable or produced from recycled materials.
  • It’s made from renewable materials.
  • It’s not made of materials harvested from a protected area or that harm threatened or endangered species with their harvest.
  • It’s not manufactured with slave labor or by workers who are not paid fairly.
  • It does not use excessive packaging.
  • It’s designed to be repairable rather than disposable.

However, it’s easy for green marketing to translate to greenwashing in practice when an organization doesn’t live up to the sustainable business practices. “Eco-friendly,” “organic,” “natural” and “green” are just some of the widely used labels that can be confusing and misleading to consumers. 

If you’re ready to slap some grass on your logo, be transparent with customers about your company’s practices and have information readily available to back up your claims.

Transparency and corporate social responsibility

“Greenwashing is actually in a corporation’s best interest,” Deandra Jefferson, former office manager for a sustainability organization that she requested go unnamed, said in an interview with Business News Daily. “Although the concept of corporate social responsibility exists, it is very rare that corporations actually live up to [it], and when they do, it’s a surface-level effort to make themselves look good.”

In other words, greenwashing benefits a corporation only when it successfully deceives its customers. Transparency can bridge the gap between artificial and genuine concern for the environment.

One example of transparency is exhibited by outdoor clothing retailer Patagonia. Unlike most companies, Patagonia doesn’t sugarcoat its use of chemicals or the fact that it leaves a footprint. The company’s sustainability mission is described as a “struggle to become a responsible company.”

“We can’t pose Patagonia as the model of a responsible company,” its website reads. “We don’t do everything a responsible company can do, nor does anyone else we know. But we can tell you how we came to realize our environmental and social responsibilities and then began to act on them.”

Avoiding greenwashing begins with honesty

It’s important to put your best foot forward when it comes to sustainable practices, and it’s understandable that you’d want to communicate these efforts to your customers. However, it’s important not to overstate the impact of your work, because even seemingly innocent exaggerations could have harmful consequences for your brand. Do your best to tell your company’s sustainability story and avoid greenwashing.

Tejas Vemparala and Jennifer Dublino contributed to this article. Source interviews were conducted for a previous version of this article.

author image
Carlyann Edwards, Staff Writer
Carlyann is pursuing her Bachelor’s degree in Business Journalism with minors in sustainability and music at The University of North Carolina at Chapel Hill and will graduate in 2020. She is incredibly interested by the intersection of business development and environmental preservation. When she isn’t writing, she enjoys working for non-profit organization Carolina Thrift, running and playing the ukulele.
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