Corporate Greenwashing – Are your favourite companies doing it?
We all care about what we buy, and enjoy spending more on products we love; and if that product is ethically responsible, we are often even more inclined to buy it. Think eggs, TOMS, or second-hand clothing. It could even be considered a trend. Reducing single-waste plastics, lowering carbon emissions, fair trade practices - anything to go green. But, often, what we are buying is deceptive, with companies making unsubstantiated claims. Many have been known to give themselves a green halo, when in fact, their sustainability and ethical responsibility credentials are questionable.
This is defined as Greenwashing. Also known as “green sheen,” Greenwashing occurs when a company provides misleading impressions or incorrect information about how their products are environmentally conscious. Consumers are targeted with marketing and PR campaigns to give the impression of sustainability and progressive environmental practices. Rather, the intention is converting sales instead of ethical advancement.
Greenwashing was coined by environmentalist Jay Westervelt in 1986. Following an observation of a beach-side hotel telling guests to re-use towels in order to save the environment, Westervelt noticed that was not the case. In no other fashion was the hotel attempting to improve the environment – this was simply a method of cutting laundry costs.
The term came to fruition when applied to corporate scandals – particularly Chevron in the 1980’s pledging to be environmentally considerate. Contrary, Chevron were continually spilling oil and violating clean air and water acts. Also, chemical company DuPont, a self-proclaimed eco-friendly brand, were the biggest manufacturer of Teflon. Teflon contained the chemical PFOA, which, when disposed of, harms animals, and also has links to testicular cancer and other long-term health issues. 3M is another company that used this chemical, another greenwashing corporation.
Have you fallen for it?
The Happy Egg Company - perhaps the most famous British eggs that derive supposedly from “happy hens” - are in fact produced by over 4.3m hens in cages. Their parent company, Noble Foods, is known to keep their hens in a cage the size of an A4 piece of paper.
Ever taken old clothes to H&M to be recycled in return for a voucher? Most of the materials received are sent to developing countries or landfill, with only 0.1 per cent of material being woven into a new piece.
Even straws are greenwashed. The paper straws from McDonald’s are not recyclable in the U.K. Should they really have changed their M from yellow to green? And Starbucks; their new straw-less lids contain more plastic than the previous straw and lid combo.
Nestle’s cocoa beans are not sustainably sourced. The chocolate bar’s ingredients contain a mix of child labour and deforestation.
How to Identify Greenwashing?
There is no clear way to spot greenwashing. However, The U.S. Federal Trade Commission (FTC) have implemented policies to protect consumers. Here’s their guidelines on spotting real green rather than false impressions:
• Packaging/ PR campaigns should explain the environmental benefit in laymen terms.
• A marketing campaign should specify exactly where the environmental claim is occurring – the packaging, the product, the supply chain.
• There should be no exaggeration or overstating.
• If a product is claiming to be above competitors environmental standards the claim should be proven.
Some Eco-lingo to watch out for:
• Environmentally friendly
Lingo like this has an incredible ability to defraud consumers. Firms can create themselves a halo of a natural, cruelty-free brand with simple, deceptive language like the terms above. Often fooling customers is inevitable and reprimands are small. DuPont for example, faced a $2bn settlement for the misuse of PFOA, a mere cough in comparison to the $21bn dollars they profit from yearly.
This also trickles down into ESG investing. Can we trust green, sustainable funds if they run on false credentials? ESG inflows have quadrupled this year. The Investment Association published figures stating responsible investment funds saw net flows of £7.1bn this year, 275 per cent more than the £1.9bn measured in the first three quarters of 2019. With growing interest in moral money and the drastic momentum of ESG funds greenwashing must always be considered.
Hopefully, this article makes you think with a dash of scepticism when considering a company’s environmental claims. And, next time you’re at the supermarket buying your happy eggs from happy hens, maybe you should think twice!
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