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Greenwashing refers to the act of making exaggerated claims regarding a company’s environmental practices or a product’s environmental benefits. Information is generally used selectively – companies and organisations create an overly positive image of themselves by communicating positively on their environmental performance while withholding negative information. This way, they mislead consumers and other stakeholders of the company.
While greenwashing can be a deliberate choice made for commercial reasons, this is not necessarily true in every case. The vast majority of companies want to make a positive social and environmental impact, but are only vaguely aware – if at all – of the need to incorporate CSR into their ambition, culture and core processes for it to be truly effective. In addition, numerous companies simply want to initiate a number of social or ‘green’ activities as a stepping stone towards developing a sustainability policy for their organisation.
Definition of greenwashing
The term ‘greenwashing’ was coined by the environmental campaigner Jay Westerveld in 1986. He criticised hotels’ advertising of their ‘reuse the towel’ initiative as an environmental benefit, whereas their true motive was to cut costs.
The term greenwashing has become more widely used since 1986. Rules are made to prevent and punish greenwashing. Yet there is still no universal definition.
The danger of greenwashing for organisations
When a company has deliberately committed greenwashing, the word will be on the street in no time. Reputational damage of this kind tends to linger, affecting how customers and employees as well as investors and financial institutions perceive your organisation. Drawing customers, staff and capital to your organisation will be more difficult.
And there is another danger. New legislation will require companies to report on their social and environmental impact as part of their annual reporting. Any attempts at greenwashing will be immediately spotted in the annual report.
The Seven Sins of Greenwashing
A member of the UL Global Network and one of the largest independent testing and certification organisations, TerraChoice has defined the ‘Seven Sins of Greenwashing’.
| Sin | Description | |
|---|---|---|
| 1 | Sin of the hidden trade-off | A claim suggesting that a product is ‘green’ based on a narrow set of attributes without attention to other important environmental issues. |
| 2 | Sin of no proof | An environmental claim not substantiated by easily accessible supporting information or by a reliable third-party certification. |
| 3 | Sin of vagueness | A claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer. |
| 4 | Sin of irrelevance | An environmental claim that may be truthful but is unimportant or unhelpful, such as ‘CFC-free’. |
| 5 | Sin of lesser of two evils | A claim that may be true within the product category but that risks distracting the consumer from the greater environmental impacts of the category as a whole, such as organic cigarettes. |
| 6 | Sin of fibbing | Environmental claims that are simply false. |
| 7 | Sin of worshipping false labels | A product that, through either words or images, gives the impression of third-party endorsement where no such endorsement exists. |