Greenwashing is a marketing technique that creates the illusion of a company or product being environmentally friendly. It is a deceptive tactic used to make consumers believe a product is more sustainable than it actually is. It is suspected that more than 95 per cent of consumer products claiming to be green are guilty of at least one count of greenwashing. Meanwhile, 72% of business execs admit their own company engages in greenwashing.

Throughout 2022, a flurry of companies were called out for greenwashing. There were class action lawsuits, brands sued for falsely marketing products, and companies whose reputations were being shredded to tatters in the media when a greenwashing news story broke concerning one of their brands.

Yet still, greenwashing happens and results in misleading consumers, and also harming sustainability efforts. When businesses greenwash, they are hindering the fight against global warming, and helping to maintain the status quo through misinformation. The truth is, with the world falling desperately short on climate goals, we simply can not afford for greenwashing to take place.

Organizations can’t truly become sustainable if they are not honest about the environmental impacts of their products, and greenwashing prevents that from happening. It can also harm the progress of other organizations that are actually striving to be more sustainable and reduce their environmental footprint. As businesses, stakeholders and consumers alike, it is essential to be aware of the dangers of greenwashing and how it affects sustainability efforts.

WHAT IS GREENWASHING?

Greenwashing is a form of false advertising that is used to promote products or companies as environmentally friendly and sustainable, when they are not. Products can be falsely advertised to appear as more sustainable than they are by using misleading marketing techniques such as false advertising about their ingredients, sourcing, or manufacturing process. Greenwashing can also occur when products are advertised as being better for the environment, but then are distributed in packaging that is not recycled or does not have recyclable materials. Or that it is carbon neutral by purchasing low-grade carbon offsets or undertaking unsustainable tree planting programmes. The list of potential greenwashing tactics is limitless.

Greenwashing Misleads Consumers

Many greenwashing claims are not based on facts, and many products that are advertised as being environmentally friendly are actually not sustainable. Greenwashing can take the form of sustainability or carbon pledges that are not matched up by action, corresponding deadlines or completed projects.

Every single action misleads consumers into believing that products are better for the environment than they actually are because they are not being honest about the environmental impact of their products. In a recent study by McKinsey, it was reported that eighty-eight percent of Gen Z doesn’t trust eco-friendly claims. However, many consumers still look for sustainable products when shopping, which is a positive change.

Unfortunately, with the growing number of sustainable products and marketing claims about them, most of which are not backed up by robust data or reporting,consumers can become overwhelmed trying to navigate their choices. Greenwashing often confuses consumers and misleads them into buying products that are not sustainable. This can cause them to purchase less sustainable products in the future, especially if they lose trust in sustainable products.

Meanwhile, if sustainable product claims are not genuine, this can lead other organizations to lose trust in the entire product category. In turn, this can cause them to lose trust in other sustainable products and avoid purchasing them in the future, which can be harmful to a sustainable supply chain. It’s an ever decreasing circle.

Surely it’s time for businesses to lift the smoke screen and empower consumers to make the right choices by being open and transparent about their sustainability efforts?

Eradicating Greenwashing

Greenwashing exists because of a lack of transparency and accountability. It is all too easy these days for companies to make big PR announcements of climate friendly projects without then having to back it up with action. However, the environmental responsibility of companies has never been greater, and simply pledging to be carbon neutral or negative by 2030 or 2050 without being able to back up these targets with action simply won’t cut it.

At Permutable, we have developed an AI tool to identify greenwashing to hold companies accountable to their claims and provide transparency concerning their sustainability claims and reported actions.

We use cutting edge machine-learning techniques enabling a highly trained and rigorously tested AI to review each and every company’s history of carbon pledges. This is then examined in detail to determine whether there is evidence that these pledges are supported by sufficient actioned projects or initiatives. It also looks for excessive use of greenwashing language in corporate literature – for example, in company and brand websites or literature as well as on marketing and publicity messaging and activity.

This, for example, includes summary statistics of emission pledges and project announcements looking at the number of net-zero announcements, future project announcements, past project announcements and total number of project announcements. We then look at the monthly aggregates of announcements for emission pledges and projects, emission reduction pledges and their deadlines and project announcements against project deadline dates.

It is this kind of detailed and granular data that will enable us all to come together and ensure companies are held accountable for their sustainability actions. In doing so, it will be infinitely harder for companies to get away with greenwashing, as their pledges and actions will be laid out for all to see. The upshot? We will be able to move forward in an open and honest fashion, tackle the common goal of reducing carbon emissions and damage to our planet and to our shared future without being distracted or compromised by greenwashing.

Companies Must Avoid Greenwashing At All Costs

There are a few steps that companies can take to avoid greenwashing and avoid misleading customers about the sustainability of their products.

– Be Honest: There are many ways that companies can take part in sustainability practices and make their products more sustainable. However, in order to avoid greenwashing, it is essential to be honest about the sustainability of their products.

– Be Transparent: Companies should be transparent about their manufacturing processes, ingredients, emissions and environmental impact, and how they are making their products more sustainable. They should also be transparent about the sustainability of their products and avoid making false claims.

– Be Specific: When discussing the sustainability of their products, companies should be specific about the environmental impacts. They should avoid using phrases such as “natural”, “eco” or “green”, which are often misused in marketing. Instead, they should be specific about the environmental benefits of their products.

Final Thoughts

Greenwashing is a deceptive marketing technique that damages a company’s reputation, brand loyalty, whilst causing customer confusion, distrust and disconnect and ultimately a company’s bottom line. It is vital that businesses are aware of the dangers of greenwashing and how it can harm sustainability efforts. Ultimately, when it comes to greenwashing, there can only ever be losers. Find out more about Permutable’s AI tool to identify greenwashing here. Pre-register your interest or sign up to be a pilot user here. Follow Permutable AI on LinkedIn and Twitter.