Greenwashing happens when a company makes misleading environmental and sustainable claims for marketing purposes. The Chartered Banker Institute defines greenwashing as: “Making false, misleading or unsubstantiated claims about the positive environmental impact of a product, service or activity.” By doing so, companies gain an unfair competitive advantage.
There are at least 5 types of Greenwashing:
- Environmental Imageries
This happens when a company uses images of leaves, animals, green packaging, etc. This gives the image to customers that the product is green. In reality when a product is green or eco-friendly the company generally use simpler images and plain packaging.
- Misleading labels
This happens when a product is showing on its label “100% organic” or “Certified…” and does not provide any information to support that information. There is a good chance that these labels are self-created and self-declared. Real organic products in Europe for example use the below EU logo:
- Hidden trade-offs
This happens when a company wants to show they are environmentally friendly but in reality they also have hidden trade-offs or malpractices. For example a clothing company can use recycled materials for the clothes but at the same time manufacture the clothes with the help of another company that is using child labor. Companies that are really environmentally friendly and sustainable will always provide information on energy, water conditions, greenhouse gas emissions, etc.
- Irrelevant Claims
This happens a company makes a claim that is already required by the law of that country. For example saying a cleaning product is free of a chemical that is already banned in that country. In China, animal testing is required by law for cosmetic and medical products so they cannot have “not tested on animals” on their product”.
- Lesser of two evils
This happens when a company makes a claim that is true but the environmental or sustainable risk is much bigger than the claim. For example is a company that sells tobacco starts selling organic cigarettes.
2. Articles and reports
- 2022 The great greenwashing scam: PR firms face reckoning after spinning for big oil [English]
- 2022 UK cracks down on greenwashing [English]
- 2019 CBI “Green Finance Position Paper” [English]
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