How to avoid deceptive advertising that hurts people and the planet
Aka the greenwashing dilemma
As climate change becomes a more pressing stressor for humanity, consumers and citizens are demanding corporations respond accordingly. Trends in consumer goods follow this demand for ethical and sustainable products.
Yet, both these metrics are hard to quantify, as we’re only starting to push for more legislatures and carbon accounting. Because of that, companies can fool their consumers into thinking the company is sustainable. With the rise in sustainable consumerism, greenwashing has emerged as an issue of transparency within the consumer space.
Greenwashing refers to a company’s claims of sustainability or ethical initiatives, but those initiatives are disingenuous or underwhelming. Companies use greenwashing as a marketing tactic in response to the growing demand for “ethical” products.
Deloitte UK found that one-third of British consumers claimed to stop buying goods from companies they deemed unethical or unsustainable. This group of consumers will only grow as we see the effects of climate change.
In the ethical-consumerism space, greenwashing is a scandalous act. Greenwashing is especially horrible as it convinces a consumer that the company is taking action against climate change when they aren’t. Consumers are learning to see through these lies, putting companies at risk of being exposed for their lies.
Inherent to the premise of greenwashing is the tension between the consumer and the corporation. Large corporations often keep production tactics secret, while consumers demand transparency. People do not want to buy something if they knew the product contributed to rainforest deforestation or child labor.
Signs of greenwashing
In 2009, TerraChoice released a list of the “Seven Deadly Sins of Greenwashing,” which can be used as signs for consumers to look out for. Greenwashing may be simple deception, like making baseless claims about a company’s initiatives or plainly lying.
In other cases, greenwashing occurs when a company understands the consumer’s lack of knowledge and exploits that. Also, greenwashing preys on the lack of knowledge by the consumer, like giving irrelevant information, making false comparisons, or hiding deceptive trade-offs.
Greenwashing is so common because sustainability itself is a vague, value-driven term. Different people claim different things are environmentally sustainable. Labels and certifications found on consumer goods are not standardized and intentionally misleading. There is no legal definition of “eco-friendly,” “natural,” or “sustainable” — and companies know this. They can place these buzzwords on their product packaging and marketing copy to trick consumers into thinking these products are better than they are.
Greenwashing vs true change
Greenwashing does not exist in easily defined metrics. Some argue that it is the disconnect between the company’s actions and its claims. Others say greenwashing can only be spotted by savvy consumers who know the details of environmental and social issues.
The easiest way to differentiate greenwashing from true sustainability is to check if a company’s claims match its actions. If a company says they use renewable energy when they don’t, it’s greenwashing. Public-facing companies are often the first to show signs of this type of greenwashing, as consumers and journalists look for these lies.
The second easiest way is to evaluate a company’s pro-environmental actions versus all the negative effects they have on the environment. ExxonMobil may invest in algae-based biofuels, but they also continue to produce oil that is the key driver of climate change. This disparity shows that some companies will show consumers these minor acts of sustainability to draw attention away from all the negatives.
To define real environmental change, we must set our standards for what a company should be responsible for. Genuine change can occur when companies evaluate their effects on the planet and make conscious and thoughtful efforts to reduce their negative effects.
Large corporations are aware of their negligent behavior, but they don’t want to change and jeopardize profits. They choose greenwashing, which allows them to do the bare minimum while still profiting. Overhauling an entire business to realign with the needs of our environment is expensive.
On the other hand, there are many benefits to sustainable and ethical business practices. In financial terms, sustainable companies are more attractive to both consumers and investors. A BCG study showed 51% of investors believe Environmental Social Governance (ESG) standards are critical for companies to incorporate.
Consumers and workers are demanding businesses to hold ethics in higher regard. A company culture that respects workers and the environment is the new standard. The United States sustainability market will reach 150 million USD in sales by 2021. Patagonia, Everlane, Allbirds, and Reformation are all successful consumer brands that rely on their sustainability actions to drive customers.
Businesses can avoid greenwashing by staying honest. It is much worse for a company to pretend to be environmentally friendly, especially as the consequences of climate change become more dire. There is no such thing as a perfectly sustainable company, but companies that prove their actions are in good faith are much more sustainable than the others.
Education on environmental issues and putting that knowledge into practice is the first step to making change happen. Creating small and large changes helps the planet, people, and often profits. Keeping the narrative honest avoids scandal and distrust.
Wrapping it up
Sustainability is a tricky market space. Some consumers demand more than others, but the most important takeaway is to align actions with values and marketing with actions. Greenwashing companies are prone to exposure and scandal, creating a sense of distrust and a loss in revenue. Companies that can genuinely make a positive change will then reap the rewards of their honest initiatives.
Consumers have already shown their interest in sustainable products. Younger generations are especially interested in buying products from companies that share their values. There is a new opportunity for companies to start sustainability initiatives with an existing customer base.
There is less risk than twenty years ago: people already want better products from better companies. Consumers are also becoming savvier, no longer falling for advertising that leans into greenwashing.
References
- https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html
- https://www.scientificamerican.com/article/greenwashing-green-energy-hoffman/
- https://betterworldapparel.com/learn/the-7-sins-of-greenwashing/
- https://corporate.exxonmobil.com/Energy-and-innovation/Advanced-biofuels/Advanced-biofuels-and-algae-research
- https://www.bcg.com/publications/2020/sustainability-matters-now-more-than-ever-for-consumer-companies
- https://www.businessinsider.com/sustainability-as-a-value-is-changing-how-consumers-shop
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