Written by Vidya Prithiviraj for the Environmental Section.
With the push for businesses to become more environmentally friendly, it comes as no surprise that 'greenwashing' is a phenomenon that occurs today. Though COP28 has called upon nations to 'transition away' from fossil fuels, they have failed to successfully discuss the financial costs of this or the opportunity of funding. These small issues delay any real change being made and it is worth exploring how this affects businesses and their behaviour... perhaps, even their honesty.
Between 30 November till 12 December 2023, COP28 took place in Dubai, where world leaders and other participants will be discussing how to reduce greenhouse gas emissions before 2030. As pressure from the public for governments and businesses to become more environmentally friendly increases, so do their attempts to do better for the environment. Yet, at the same time, accusations of greenwashing have also increased. This article will discuss what greenwashing is and why companies do it; and explain why it is such a huge problem that consumers and businesses alike should be concerned about.
At the moment, there is no legal definition of greenwashing in the UK, perhaps because it has so many applications. Whether we are aware of it or not, we will all have encountered it at some point in our lives, at varying scales. Companies often use greenwashing to suggest that they are doing more for the environment than they are in reality. It often involves “misleading the public” and can manifest in many different ways. One example of greenwashing is having goals of reducing emissions or becoming carbon-neutral but having no plausible method or plan in place to reach this goal.
However, it can also manifest in vague terms used to promote environmentally friendly products such as “green” or “eco-friendly”, which are difficult to define, and have no quantifiable value beyond being “good for the environment”. Greenwashing even occurs when certain sustainable features are highlighted, but other less environmentally friendly methods and processes are omitted or deliberately ignored. One example of a product being challenged is the challenge to TIER’s Electric Scooters by ASA (Advertising Standards Authority). The scooters were advertised as “environmentally friendly” but, despite them having a low carbon footprint, there were greenhouse gas emissions in transport and in the use of aluminium to make the scooter, which were highlighted in the life cycle assessment. By advertising the product as they did, ASA said that TIER implied that there was no environmental damage occurring when the scooters were made.
With most companies, greenwashing is unintentional and comes from not knowing how to promote the positive environmental policies that are being implemented without implying that more is being done than actually is. Many companies use phrases like “green” and “eco-friendly” because they sound good or are trying to highlight the positive change being made, not because they are trying to deceive consumers. The main purpose is to encourage consumers and investors to support these products, but it is still misleading.
Greenwashing also has negative impacts on companies - both those who partake in greenwashing, and those who are genuinely improving on their environmental impact and policies. As the public begins to care more about the health of the environment, and as awareness of the issues of sustainability and pollution increases, consumers are investing more in products that seem eco-friendly. As said by D’Hollander and Giannini, ‘if consumers can confidently choose products that are better for the environment, this rewards companies that are doing the right thing, drives competition around greener products, and can shift whole sectors and markets toward sustainability.’ When consumers are misled into supporting greenwashed products, there’s no drive toward a more sustainable future and not enough incentive for companies to adopt more environmentally friendly methods of production.
This isn’t the only way that greenwashing is bad for these companies. Ever since it was discussed at COP 27, there has been increased awareness of greenwashing. As people begin to recognise claims that are slightly vague and possibly greenwashed, trust in these companies shrinks. There is a demand for environmentally friendly products, and companies known to have unsustainable practices are deemed untrustworthy in the consumers' eyes. Furthermore, it is unlawful in the UK for businesses to partake in “unfair commercial practice” such as misleading statements or omissions, if they will have an effect on a consumer’s decision on whether or not to purchase the product. Therefore, companies are not only unwillingly participating in unlawful practices, but also diminishing consumer faith in their products, and in the long term, this will have a negative impact on their business.
In conclusion, greenwashing is a major problem that we all need to be aware of. Companies need to ensure that the environmental claims they are making are based on fact, and consumers should try to ensure that the claims the companies they are purchasing from are making are logical and transparent, not vague or misleading, whether intentionally or unintentionally.
References
[1] Advertising Standards Authority, ‘ASA Ruling on TIER Operations Ltd’ (ASA, 06 April 2022) TIER Operations Ltd - ASA | CAP, accessed 11 November 2023.
[2] United Nations, ‘Greenwashing – the deceptive tactics behind environmental claims’ (UN), Greenwashing – the deceptive tactics behind environmental claims | United Nations, accessed 12 November 2023.
[3] United Nations, ‘COP27: ‘Zero tolerance for greenwashing’, Guterres says as new report cracks down on empty net-zero pledges’, (UN, 08 November 2022), COP27: ‘Zero tolerance for greenwashing’, Guterres says as new report cracks down on empty net-zero pledges | UN News, accessed 12 November 2023.
[4] D’Hollander and A Giannini, “Can the EU’s New Regulations End Greenwashing?”, (IISD, 05 October 2022), https://sdg.iisd.org/commentary/guest-articles/can-the-eus-new-regulations-end-greenwashing/, accessed 12 November 2023.
[5] A Goudarzi, ‘“Greenwashing” – does your investment really do what it says on the tin?’ (Linklaters, 18 July 2022), “Greenwashing” – does your investment really do what it says on the tin? (linklaters.com), accessed 11 November 2023.
[6] J Ormesherand and S Tuson, ‘Greenwashing: what do you need to know?’ (The Law Society, 03 August 2023), https://www.lawsociety.org.uk/topics/climate-change/greenwashing-what-do-you-need-to-know, accessed 12 November 2023.
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