Greenwashing has quickly grown to become a key buzzword in the environmental movement. The sustainable reputation of companies across the globe can be shattered by the simple accusation of ‘greenwashing’ to hide unethical business practices, exaggerate the positive impact of a brand, and mislead consumers about the green credentials of businesses.
It’s a concept we’re all familiar with, but likely hold different definitions of what companies precisely do to ‘greenwash’. Despite being so regularly used, it’s worth us all considering how, as consumers, we’re engaged with and how we can recognise many of the more subtle, pervasive, and institutional methods of greenwashing.
Sustainability marketing is a growing field, aiming to combine the socio-ecological issues we’re facing with the conventional aim of addressing what we, as consumers, want (Belz, 2006). With the potential to reach lucrative new ‘ecologically conscious’ markets, it’s unsurprising that companies are investing in their sustainability marketing strategies.
Sustainability marketing (Belz, 2006)
False labelling.
Third-party verification from external groups is a commonly used way for companies to advertise the sustainability of their practices and products. Distinctive labelling - be it the blue fish for the Marine Stewardship Council or the green and blue of the Fairtrade Foundation - is useful for seizing the attention of busy shoppers who can’t be expected to investigate the origin of everything they put in the trolley.
However, these labels aren’t enough to carry a company through the scrutiny of greenwashing, without enough internal sustainability reporting from the business itself (Herzig & Schalteggar, 2011). Equally, we should be mindful of the processes used by verification bodies to assess businesses and award certification.
A key example of this is palm oil, a material used in the production of an overwhelming range of products. It’s grown in large monocluture plantations, often at the expense of native biodiversity and water security. Due to this problem, the Roundtable on Sustainable Palm Oil was established to certify the methods used by producers. The issue? The RSPO has a broad criteria of what constitutes a ‘sustainable’ technique, almost entirely overlooking the social impacts of palm oil production on farming communities (Pye, 2019). Attempts to reform such criteria are difficult when the organisation is led by some of the largest palm oil producers in Southeast Asia who are unsurprisingly reluctant to put limitations on their own practices.
Issues with verification make sustainable shopping a mindfield and it’s no wonder many feel overwhelmed or frustrated with modern consumerism. While it’s incredibly difficult to remove many products from our lives if we don’t trust their certification, palm oil is an ingredient for which alternatives are available and palm oil free products are becoming more widespread.
Untrue statements.
It’s reasonable to think companies, in this day and age, can’t get away with dishonesty. Standards agencies, product testing, and sustainability reporting all exist to ensure we, as consumers, can fully understand how our products are made. Unfortunately, this overlooks a major separation between consumer and producer, known as ‘information asymmetry’ (Belz, 2006). While we can directly experience and judge the quality of the things we buy through the price, the function, its usefulness etc, we don’t get to see behind the curtain of how this final product came to be.
So called ‘credence qualities’ of products, such as the supply chain, the labour rights of those on the production line, and the environmental impact of the core materials are beyond our field of view. We must take the word of the company that what we’re told about their business practices and products is true. However, this disconnect allows opportunistic companies to change the record - this can range from simply not reporting information about their supply chain, to deviating from the truth completely.
One of the most prominent examples of these untrue statements getting a company in hot water is the Volkswagen emissions scandal. Despite car manufacturers needing to follow emissions tests conducted by the US Environmental Protection Agency (EPA), VW had successfully changed the technology in their diesel vehicles to improve their emissions results. The aim? To improve the ecological credentials of their diesel cars to push up sales. Ultimately, the potential for more profit was placed above honesty and sustainability.
Once found out, the newly appointed CEO, Mattias Mueller said “my most urgent task is to win back trust for the Volkswagen Group” (BBC, 2015). Crucially, it wasn’t the more than 30 billion euros paid by the company in fines and compensation across the globe that most concerned the CEO. The financial hit was certainly a blow for the company, yet VW’s continued sales suggest even the greatest of greenwashing scandals struggles to defeat large multinational corporations. Instead, it was the brand identity and public perception of VW that most concerned the company.
This indicates that not only does consumer opinion matter in determining the success of a company, but these companies know this. Furthermore, the VW scandal teaches us about the limitations of environmental testing. As mentioned earlier, third-party testing is only as thorough and reliable as the institutions that carry it out, and some businesses are willing to risk both a great deal of money and reputation to find loopholes or, in the case of VW, manipulate the performance of their products to subvert such testing.
Fortunately in the wake of the VW scandal, the EU and other institutions improved the rigour of their vehicle testing. While such cases of greenwashing are still taking place, it’s positive to think institutions are making it more difficult for these scandals to happen in future.
Deep Greenwashing.
Many of us were shocked by the statistic that the biggest delegation at the COP26 climate summit was representatives of the fossil fuel industry, outweighing the largest national delegations in the world. This speaks volumes to the influence companies like Shell and BP have in international climate negotiations, but we shouldn’t overlook the more subtle but equally damaging lobbying effect close to home, within the UK government.
But how does this link to greenwashing? Many companies (particularly fossil fuel giants) outwardly promote their sustainable credentials, while simultaneously funding and facilitating pro-fossil fuel lobbying.
Shell and BP are two companies known to fund associations and employ lobbyists to operate in Westminster, aiming to push policies in their favour (Guardian, 2022). This takes place while BP attempts to rebrand itself as ‘Beyond Petroleum’ while making annual profits of £23 billion predominantly from - you guessed it - the very fossil fuels they claim to be phasing out (Guardian, 2023).
Attempts to improve the transparency of lobbying in the UK are being made, such as through the public UK Lobbying Register. However, it’s easy to feel rather disheartened when the companies can continue promoting a sustainable brand identity while working to prevent climate change policy being implemented.
Holly Derrett, 9th February 2023
Sources:
BBC (2015) - Volkswagen: The scandal explained. https://www.bbc.com/news/business-34324772
Belz (2006) - Marketing in the 21st Century. Technical University of Munich. Business Strategy and the Environment. Vol 15. 139-144.
Guardian (2022) - Oil and gas firms have unlisted links to Westminster. https://www.theguardian.com/politics/2022/feb/20/lobbyists-for-oil-and-gas-companies-shell-bp-exxonmobil
Guardian (2023) - BP scales back climate goals as profits more than double to £23bn. https://www.theguardian.com/business/2023/feb/07/bp-profits-windfall-tax-gas-prices-ukraine-war
Herzig + Schalteggar (2011) - Corporate Sustainability Reporting. In Godemann + Michelsen, Sustainability Communication Interdisciplinary Perspectives and Theoretical Foundations. Springer. 151-170.
Pye (2019) - Commodifying sustainability: Development, nature and politics in the palm oil industry. World Development. Vol 121. 218-228.