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Have You Been Greenwashed?

Drishti Masand, Research Associate
September 2, 2020

Understanding the convoluted issue of how to identify & avoid greenwashing

As sustainability becomes increasingly important and consumers become more educated around the topic, it is becoming increasingly common for brands to be accused of greenwashing. Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are environmentally sound. Many brands overuse the term "sustainability" – even when it is not truly applicable. Buzzwords like "eco-friendly" and "conscious" litter marketing messages and advertisements but offer no practical meaning to consumers. In the brands' defense, there isn't a universally agreed-upon definition of sustainability, and groups can argue that they are sustainable by their own definition. However, the loose claims many companies have made around sustainability efforts no longer satisfy consumers. Consumers are increasingly driven by sustainability claims and verifications, but no brand can be 100% sustainable. Thankfully, the commitment is real for some brands, and this shift is an evolution that is necessary but cannot occur quickly. This blog will help you identify, understand, and avoid greenwashing.

Making Sense of Sustainability

The concept of greenwashing is evident across almost all industries, from oil and gas, to automotive, to consumer packaged goods and fashion, but it's recognized in only a few. Companies are notorious for staying ahead of the curve and constantly changing tactics to maintain the consumer's perception of sustainability. At Lux, we categorize greenwashing into four types: 

  • Fraudulent greenwashing: Some companies take greenwashing as far as deceiving regulators and government agencies about sustainability, making some forms of greenwashing illegal. For example, the Volkswagen "diesel dupe" is one of the biggest legal and ethical greenwashing scandals in the past decade.

  • Harmful greenwashing: Harmful greenwashing is when a marketing campaign is so false or misleading that the reality is the opposite of what is being showcased. Consumers are becoming increasingly wary of companies making claims as a result - but even popular efforts can have issues. In 2018, in response to increased calls for banning plastic straws, Starbucks introduced a new strawless lid that actually contained more plastic by weight than the old straw-and-lid combination and thus led to more waste. Starbucks had responded to the outcries on the impact of plastic straws and only worked to eliminate straws, without considering the overall carbon footprint of its strawless design. Companies need to consider all aspects of the design to evaluate sustainability, not just focus on one priority goal. 
  • "Harmless" greenwashing: "Harmless" greenwashing is possibly the only acceptable form of greenwashing – that is, when marketing claims are exaggerated versions of the truth. For example, many CPG brands use bioplastics for packaging because bioplastics sound more sustainable than conventional plastics. However, bioplastics are often conflated with biodegradable plastics, although the terms are not synonymous. For instance, petroleum-based plastics produced by microorganisms are still considered bioplastics even though the product produced has an identical chemical composition to that of its petroleum counterpart.

  • Genuine green initiatives: These initiatives are truly sustainable plans that have real environment-positive impacts. These actions usually lead to decarbonization and carbon neutrality, reduction in resources used and produced, and a fully circular economy.


Greenwashing FIgure 1

The figure above has just a few examples of different types of greenwashing and green initiatives. Harmful and illegal greenwashing should be avoided at all costs, but some greenwashing can be considered "harmless": Pledges like Amazon's Climate Pledge Arena rename may not create any sustainable change, but they can instigate dialogue that is valuable for consumers and potentially policymakers. Further, initiatives like the use of recycled plastic content for bottles and shoes are among the few products working toward true sustainability and circularity.

Lux Research Sustainability Newsletter

Without a comprehensive approach that includes environmental, labor, and social change, sustainability marketing is useless, if not deceptive. While brands face an uphill battle of compromises on the path toward sustainability – be it lowered profit margins, increased product prices, investing in collection and recycling infrastructure, or responsibly sourcing raw materials – it is imperative that groups implement decisions for the circular economy and stakeholders alike.

For brands to genuinely fulfill their marketing claims, there are "measuring factors" to distinguish sustainable options from others that companies can/should start with: 

  • Raw materials: Companies need to verify the source of all the raw materials for their products and packaging; for example, with bioplastics, it is important to verify if the biosource was farmed sustainably and is renewable. Irresponsibly replacing plastics with alternate materials like bioplastics, paper, or aluminum may shift the burden and create a separate set of sustainability problems. Reducing the amount of overall material used and moving toward monomaterial product design will be much more impactful for sustainability.

  • Manufacturing and production: Companies should reduce carbon and waste emissions to lower their greenhouse gas effect – improving manufacturing methods can have a significant impact. For chemicals and materials companies, governments have implemented regulations to decarbonize industries and move toward a low-carbon economy through technologies like carbon capture. In other industries, such as textiles and apparel, wastewater is a serious issue, with millions of gallons discharged daily. Here, processes are being developed to reduce pollutant loadings in the wastewater to enable recycling and reuse of the water.

  • Product use: This metric includes a myriad of issues; companies should both limit transportation distances in their supply chain to minimize the carbon footprint of a product and ensure that the product is clean during its use, with no harmful byproducts. For example, microbeads in face washes are used for exfoliation but are extremely harmful to the environment when they enter wastewater streams.

  • End of life: Companies need to invest in their product end of life and develop a circular economy to maintain a holistic approach to sustainability. "Sustainability" has traditionally been focused on waste accumulation in landfills and oceans. Unfortunately, regardless of any reduction in resources used and byproducts generated, waste is inevitable. To combat the issue, companies should tackle end of life through a variety of approaches, be it recycling to reduce waste across industries or using food waste as a feedstock for feed and fertilizer. Alternatively, byproducts or downstream products may still be valuable; it could be useful for companies to decide how to create value from this stuff in addition to limiting the overall waste generated.

These principles, although seemingly simple, are necessary to apply to marketing green practices, businesses, products, and services. By using them effectively, organizations can avoid greenwashing. Companies should already have started investing in or developing solutions for a sustainable, circular economy in order to stay ahead of competitors, capitalize on government incentives, and respond to consumer demand. Groups that haven't yet done so must move quickly and commit to sustainable practices using the above guidelines.

 

 

FURTHER READING:

- Download the Infographic: The Future of Plastic Recycling

- Whitepaper: Making Sense of "Sustainability" (Free Download)

- Press Release: More Than Hype, Sustainability is Crucial for Innovation Leaders

- Blog: Climate Change Isn't Coming...It's Already Here

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