Greenwashing

Greenwashing (a compound word modeled on "whitewash"), also called green sheen, is a form of advertising or marketing spin that deceptively uses green PR and green marketing to persuade the public that an organization's products, goals, or policies are environmentally friendly. Companies that intentionally adopt greenwashing communication strategies often do so to distance themselves from their environmental lapses or those of their suppliers. Firms engage in greenwashing for two primary reasons: to appear legitimate and to project an image of environmental responsibility to the public. Because there "is no harmonised definition of greenwashing", a determination that this is occurring in a given instance may be subjective.
Greenwashing occurs when an organization spends significantly more resources on "green" advertising than on environmentally sound practices. Many corporations use greenwashing to improve public opinion of their brands. Complex corporate structures can further obscure the bigger picture. Corporations attempt to capitalize off of consumer's environmental guilt. Critics of the practice suggest that the rise of greenwashing, paired with ineffective regulation, contributes to consumer skepticism of all green claims and diminishes the power of the consumer to drive companies toward greener manufacturing processes and business operations. Greenwashing covers up unsustainable corporate agendas and policies. Highly public accusations of greenwashing have contributed to the term's increasing use.
Greenwashing has recently increased to meet consumer demand for environmentally-friendly goods and services. New regulations, laws, and guidelines put forward by organizations such as the Committee of Advertising Practice in the UK aim to discourage companies from using greenwashing to deceive consumers. At the same time, activists have been increasingly inclined to accuse companies of greenwashing, with inconsistent standards as to what activities merit such an accusation.
Activities deemed to be characteristic of greenwashing can vary by time and place, product, and the opinions or expectations of the person making the determination.
According to the United Nations, greenwashing can present itself in many ways:
TerraChoice, an environmental consulting division of UL, described "seven sins of greenwashing" in 2007 to "help consumers identify products that made misleading environmental claims":
The organization noted that by 2010, approximately 95% of consumer products in the U.S. claiming to be green were discovered to commit at least one of these sins.
The origins of greenwashing can be traced to several different moments. For example, Keep America Beautiful was a campaign founded by beverage manufacturers and others in 1953. The campaign focused on recycling and littering, diverting attention away from corporate responsibility to protect the environment. The objective was to forestall the regulation of disposable containers such as the one established by Vermont.
In the mid-1960s, the environmental movement gained momentum, particularly after the publication of the landmark Silent Spring by Rachel Carson. The book marked a turning point about the environment and inspired citizen action. It prompted many companies to seek a new cleaner or greener image through advertising. Jerry Mander, a former Madison Avenue advertising executive, called this new form of advertising "ecopornography."
The first Earth Day was held on 22 April 1970. Most companies did not actively participate in the initial Earth Day events because environmental issues were not a major corporate priority, and there was a sense of skepticism or resistance to the movement's message. Nevertheless, some industries began to advertise themselves as friendly to the environment. For example, public utilities were estimated to have spent around $300 million advertising themselves as clean and green companies, which was eight times what they spent on pollution reduction research.
The term "greenwashing" was coined by New York environmentalist Jay Westerveld in a 1986 essay about the hotel industry's practice of placing notices in bedrooms promoting the reuse of towels to "save the environment". He noted that these institutions often made little or no effort toward reducing energy waste, although towel reuse saved them laundry costs. He concluded that the fundamental objective was most frequently increased profit. He labeled this and other profitable-but-ineffective "environmentally-conscientious" acts as "greenwashing".
In 1991, a study published in the "Journal of Public Policy and Marketing" (American Marketing Association) found that 58% of environmental ads had at least one deceptive claim. Another study found that 77% of people said a company's environmental reputation affected whether they would buy its products. One-fourth of all household products marketed around Earth Day advertised themselves as being green and environmentally friendly. In 1998, the Federal Trade Commission created the "Green Guidelines", which defined terms used in environmental marketing. The following year, the FTC found the Nuclear Energy Institute's environmentally clean claims invalid. The FTC did nothing about the ads because they were out of the agency's jurisdiction. This caused the FTC to realize they needed new, clear, enforceable standards. In 1999, the word "greenwashing" was added to the "Oxford English Dictionary".
Days before the 1992 Earth Summit in Rio de Janeiro, Greenpeace released the Greenpeace Book on Greenwash, which described the corporate takeover of the UN conference and provided case studies of the contrast between corporate polluters and their rhetoric. Third World Network published an expanded version of that report, "Greenwash: The Reality Behind Corporate Environmentalism."
In 2002, during the World Summit on Sustainable Development in Johannesburg, the Greenwashing Academy hosted the Greenwash Academy Awards. The ceremony awarded companies like BP, ExxonMobil, and even the U.S. Government for their elaborate greenwashing ads and support for greenwashing. A European Union study from 2020 found that over 50% of examined environmental claims in the EU were vague, misleading or unfounded and 40% were unsubstantiated.
Many companies have committed to lessen their greenhouse gas emissions to a net zero due to the Paris Agreement being established in 2015. A net zero emissions level means that any emissions given off by a company would be offset by carbon eliminators in the natural world (otherwise known as carbon sinks). However, companies are not actually cutting emissions, but are creating infeasible plans and trying to improve other things rather than their emissions. Therefore, most companies are not actually upholding their agreements and ultimately continue not to cause any positive change.
Some companies communicate and publicize unsubstantiated ethical claims or social responsibility, and practice greenwashing, which increases consumer cynicism and mistrust. By using greenwashing, companies can present their business as more ecologically sustainable than it is. According to a policy report, greenwashing includes risks such as misleading advertisements and public communications, misleading ESG credentials, and false or deceiving carbon credit claims.
After a legal analysis, the corruption and integrity risks in climate solutions reports show that regulations are significantly weaker for misleading ESG credentials than for climate washing and advertising standards. Despite imposed obligations, ESG rating agencies or ESG auditors are not regulated in any reviewed jurisdictions. Factors such as the lack of oversight by third-party environmental service providers, the opacity of internal scoring methodologies, and the lack of alignment and consistency around ESG assessments can create opportunities for misleading or unsubstantiated claims and, worst cases, bribery or fraud.
Greenwashing is a relatively new area of research within psychology, and there needs to be more consensus among studies on how greenwashing affects consumers and stakeholders. Because of the variance in country and geography in recently published studies, the discrepancy between consumer behavior in studies could be attributed to cultural or geographic differences.
Researchers found that consumers significantly favor environmentally friendly products over their greenwashed counterparts. A survey by LendingTree found that 55% of Americans are willing to spend more money on products they perceive to be more sustainable and eco-friendly.
Consumer perceptions of greenwashing are also mediated by the level of greenwashing they are exposed to. Other research suggests that few consumers notice greenwashing, particularly when they perceive the company or brand as reputable. When consumers perceive green advertising as credible, they develop more positive attitudes towards the brand, even when the advertising is greenwashed.
Other research suggests that consumers with more green concern are more able to tell the difference between honest green marketing and greenwashed advertising; the more green concern, the stronger the intention not to purchase from companies from which they perceive greenwashing advertising behavior. When consumers use word-of-mouth to communicate about a product, green concern strengthens the negative relationship between the consumer's intent to purchase and the perception of greenwashing.
Research suggests that consumers distrust companies that greenwash because they view the act as deceptive. If consumers perceive that a company would realistically benefit from a green marketing claim being true, then it is more likely that the claim and the company will be seen as genuine.
Consumers' willingness to purchase green products decreases when they perceive that green attributes compromise product quality, making greenwashing potentially risky, even when the consumer or stakeholder is not skeptical of green messaging. Words and phrases often used in green messaging and greenwashing, such as "gentle," can lead consumers to believe the green product is less effective than a non-green option.
Eco-labels can be given to a product from an external organization and the company itself. This has raised concerns because companies can label a product as green or environmentally friendly by selectively disclosing positive attributes of the product while not disclosing environmental harms. Consumers expect to see eco-labels from both internal and external sources but perceive labels from external sources to be more trustworthy. Researchers from the University of Twente found that uncertified or greenwashed internal eco-labels may still contribute to consumer perceptions of a responsible company, with consumers attributing internal motivation to a company's internal eco-labeling. Other research connecting attribution theory and greenwashing found that consumers often perceive green advertising as greenwashing when companies use green advertisements, attributing the green messaging to corporate self-interest. Green advertising can backfire, particularly when the advertised environmental claim does not match a company's environmental engagement.
Researchers working with consumer perception, psychology, and greenwashing note that companies should "walk the walk" regarding green advertising and behavior to avoid the negative connotations and perceptions of greenwashing. Green marketing, labeling, and advertising are most effective when they match a company's environmental engagement. This is also mediated by the visibility of those environmental engagements, meaning that if consumers are unaware of a company's commitment to sustainability or environmentally-conscious ethos, they cannot factor greenness in their assessment of the company or product.
Exposure to greenwashing can make consumers indifferent to or generate negative feelings toward green marketing. Thus, genuinely green businesses must work harder to differentiate themselves from those who use false claims. Nevertheless, consumers may react negatively to valid sustainability claims because of negative experiences with greenwashing.
Conversely, concerns about the perception of genuine efforts to develop more environmentally friendly practices can lead to "greenhushing", where a company avoids publicizing these efforts out of concern that they will be accused of greenwashing anyway.
Companies may pursue environmental certification to avoid greenwashing through independent verification of their green claims. For example, the Carbon Trust Standard launched in 2007 with the stated aim "to end 'greenwash' and highlight firms that are genuine about their commitment to the environment."
There have been attempts to reduce the impact of greenwashing by exposing it to the public. The Greenwashing Index, created by the University of Oregon in partnership with EnviroMedia Social Marketing, allowed the public to upload and rate examples of greenwashing, but it was last updated in 2012.
Research published in the Journal of Business Ethics in 2011 shows that Sustainability Ratings might deter greenwashing. Results concluded that higher sustainability ratings lead to significantly higher brand reputation than lower sustainability ratings. This same trend was found regardless of the company's level of corporate social responsibility (CSR) communications. This finding establishes that consumers pay more attention to sustainability ratings than CSR communications or greenwashing claims.
The World Federation of Advertisers released six new guidelines for advertisers in 2022 to prevent greenwashing. These approaches encourage credible environmental claims and more sustainable outcomes.
Worldwide regulations on misleading environmental claims vary from criminal liability to fines or voluntary guidelines.
The Australian Trade Practices Act punishes companies that provide misleading environmental claims. Any organization found guilty of such could face up A$6 million in fines. In addition, the guilty party must pay for all expenses incurred while setting the record straight about their product or company's actual environmental impact.
Canada's Competition Bureau, along with the Canadian Standards Association, discourage companies from making "vague claims" about their products' environmental impact. Any claims must be backed up by "readily available data."
The European Anti-Fraud Office (OLAF) handles investigations that have an environmental or sustainability element, such as the misspending of EU funds intended for green products and the counterfeiting and smuggling of products with the potential to harm the environment and health. It also handles illegal logging and smuggling of precious wood and timber into the EU (wood laundering).
In January 2021, the European Commission, in cooperation with national consumer protection authorities, published a report on its annual survey of consumer websites investigated for violations of EU consumer protection law. The study examined green claims across a wide range of consumer products, concluding that for 42 percent of the websites examined, the claims were likely false and misleading and could well constitute actionable claims for unfair commercial practices.
In the context of escalating concerns regarding the authenticity of corporate ecological sustainability claims, greenwashing has emerged as a significant issue and poses a real challenge to sustainable finance regulations gaps. ESMA outlined the correlation between the growth of ESG-related funds and greenwashing. The exponential rise of funds integrating vague ESG-related language in their names started since the Paris Agreement (2015), and is effective in deceivingly attracting more investors.
The 2020-2024 agenda of DG FISMA concern about greenwashing reconciles two objectives: increasing capital for sustainable investments and bolstering trust and investor protection in European financial markets.
The European Union struck a provisional agreement to mandate new reporting rules for companies with over 250 staff and a turnover of €40 million. They must disclose environmental, social, and governance (ESG) information, which will help combat greenwashing. These requirements go into effect in 2024. The European Commission has introduced a proposal of ESG regulation aimed at bolstering transparency and integrity within ESG rating in 2023.
In June 2024, the Federal Constitutional Court of Germany ruled that companies that use "climate neutral" in advertising must define what the term means or use of the phrase would not continue to be permitted due to the phrase being too vague.
Norway's consumer ombudsman has targeted automakers who claim their cars are "green," "clean," or "environmentally friendly," with some of the world's strictest advertising guidelines. Consumer Ombudsman official Bente Øverli said: "Cars cannot do anything good for the environment except less damage than others." Manufacturers risk fines if they fail to drop misleading advertisements. Øverli said she did not know of other countries going so far in cracking down on cars and the environment.
The Green Leaf Certification is an evaluation method created by the Association of Southeast Asian Nations (ASEAN) as a metric that rates the hotels' environmental efficiency of environmental protection. In Thailand, this certification is believed to help regulate greenwashing phenomena associated with green hotels. Eco hotel or "green hotel" are hotels that have adopted sustainable, environmentally-friendly practices in hospitality business operations. Since the development of the tourism industry in the ASEAN, Thailand superseded its neighboring countries in inbound tourism, with 9 percent of Thailand's direct GDP contributions coming from the travel and tourism industry in 2015. Because of the growth and reliance on tourism as an economic pillar, Thailand developed "responsible tourism" in the 1990s to promote the well-being of local communities and the environment affected by the industry. However, studies show the green hotel companies' principles and environmental perceptions contradict the basis of corporate social responsibilities in responsible tourism. Against this context, the Green Leaf Certification issuance aims to keep the hotel industry and supply chains accountable for corporate social responsibilities regarding sustainability by having an independent international organization evaluate a hotel and rate it one through five leaves.
The Competition and Markets Authority is the UK's primary competition and consumer authority. In September 2021, it published a Green Claims Code to protect consumers from misleading environmental claims and businesses from unfair competition. In May 2024, the Financial Conduct Authority introduced anti-greenwashing rules covering sustainability claims made by regulated firms that market financial products or services.
The Federal Trade Commission (FTC) provides voluntary guidelines for environmental marketing claims. These guidelines give the FTC the right to prosecute false and misleading claims. These guidelines are not enforceable but instead were intended to be followed voluntarily:
The FTC announced in 2010 that it would update its guidelines for environmental marketing claims in an attempt to reduce greenwashing. The revision to the FTC's Green Guides covers a wide range of public input, including hundreds of consumer and industry comments on previously proposed revisions, offering clear guidance on what constitutes misleading information and demanding clear factual evidence.
According to FTC Chairman Jon Leibowitz, "The introduction of environmentally-friendly products into the marketplace is a win for consumers who want to purchase greener products and producers who want to sell them." Leibowitz also says such a win-win can only operate if marketers' claims are straightforward and proven.
In 2013, the FTC began enforcing these revisions. It cracked down on six different companies; five of the cases concerned false or misleading advertising surrounding the biodegradability of plastics. The FTC charged ECM Biofilms, American Plastic Manufacturing, CHAMP, Clear Choice Housewares, and Carnie Cap, for misrepresenting the biodegradability of their plastics treated with additives.
The FTC charged a sixth company, AJM Packaging Corporation, with violating a commission consent order prohibiting companies from using advertising claims based on the product or packaging being "degradable, biodegradable, or photodegradable" without reliable scientific information. The FTC now requires companies to disclose and provide the information that qualifies their environmental claims to ensure transparency.
The issue of green marketing and consumerism in China has gained significant attention as the country faces environmental challenges. According to "Green Marketing and Consumerism in China: Analyzing the Literature" by Qingyun Zhu and Joseph Sarkis, China has implemented environmental protection laws to regulate the business and commercial sector. Regulations such as the Environmental Protection Law and the Circular Economy Promotion Law contain provisions prohibiting false advertising (known as greenwashing). The Chinese government has issued regulations and standards to regulate green advertising and labeling, including the Guidelines for Green Advertising Certification, the Guidelines for Environmental Labeling and Eco-Product Certification, and the Standards for Environmental Protection Product Declaration. These guidelines promote transparency in green marketing and prevent false or misleading claims. The Guidelines for Green Advertising Certification require that green advertising claims should be truthful, accurate, and verifiable. These guidelines and certifications require that eco-labels should be based on scientific and technical evidence, and should not contain false or misleading information. The standards also require that eco-labels be easy to understand and not confuse or deceive consumers. The regulations that are set in place for greenwashing, green advertising, and labeling in China are designed to protect consumers and prevent misleading claims. China's climate crisis, sustainability, and greenwashing remain critical and require ongoing attention. The implementation of regulations and guidelines for green advertising and labeling in China aims to promote transparency and prevent false or misleading claims.
In efforts to stop this practice, in November 2016, the General Office of the State Council introduced legislation to promote the development of green products, encourage companies to adopt sustainable practices, and mention the need for a unified standard for what was to be labeled green. This was a general plan or opinion on the matter, with no specifics on its implementation, however with similarly worded legislation and plans out at that time there was a push toward a unified green product standard. Until then, green products had various standards and guidelines developed by different government agencies or industry associations, resulting in a lack of consistency and coherence. One example of guidelines set then was from the Ministry of Environmental Protection of China (now known as the Ministry of Ecology and Environment). They issued specifications in 2000, but these guidelines were limited and not widely recognized by industry or consumers. It was not until 2017, with the launch of GB/T (a set of national standards and recommendations), that a widespread guideline was set for what would constitute green manufacturing and a green supply chain. Expanding on these guidelines in 2019 the State Administration for Market Regulation (SAMR) created regulations for Green Product Labels, which are symbols used on products to mark that they meet certain environmentally friendly criteria, and certification agencies have verified their manufacturing process. The standards and coverage for green products have increased as time passes, with changes and improvements to green product standardization still occurring in 2023.
In China, the Greenpeace Campaign focuses on the pain point of air pollution. The campaign aims to address the severe air pollution problem prevalent in many Chinese communities. The campaign has been working to raise awareness about air pollution's health and environmental impacts, advocate for more robust government policies and regulations to reduce emissions, and encourage a shift toward clean and renewable energy sources. "From 2011 to 2016, we linked global fast fashion brands to toxic chemical pollution in China through their manufacturers. Many multinational companies and local suppliers have stopped using toxic and harmful chemicals. They included Adidas, Benetton, Burberry, Esprit, H&M, Puma, and Zara, among others." The Greenpeace Campaign in China has involved various activities, including scientific research, public education, and advocacy efforts. The campaign has organized public awareness events to engage both consumers and policymakers, urging them to take action to improve air quality. "In recent years, Chinese Communist Party general secretary Xi Jinping has committed to controlling the expansion of coal power plants. He has also pledged to stop building new coal power abroad". The campaign seeks to drive public and government interest toward more strict air pollution control measures, promote more clean energy technology, and contribute to health, wellness, and sustainability in China. However, the health of Chinese citizens is at the forefront of this issue, as air pollution is a critical issue in the nation. The article emphasizes that China has prioritized putting people front and center on environmental issues. China's Greenpeace campaigns and those in other countries are a part of their global efforts to address environmental challenges and promote sustainability.
"Bluewashing" is a similar term. However, instead of falsely advertising environmentally friendly practices, companies are advertising corporate social responsibility. For example, companies are saying they are fighting for human rights while practicing very unethical production practices such as paying factory employees next to nothing.
Carbon emission trading can be similar to greenwashing in that it gives an environmentally-friendly impression, but can be counterproductive if carbon is priced too low, or if large emitters are given "free credits." For example, Bank of America subsidiary MBNA offers "Eco-Logique" MasterCards that reward Canadian customers with carbon offsets when they use them. Customers may feel that they are nullifying their carbon footprint by purchasing goods with these, but only 0.5% of the purchase price goes to buy carbon offsets; the rest of the interchange fee still goes to the bank.
Greenscamming describes an organization or product taking on a name that falsely implies environmental friendliness. It is related to both greenwashing and greenspeak. This is analogous to aggressive mimicry in biology.
Greenscamming is used in particular by industrial companies and associations that deploy astroturfing organisations to try to dispute scientific findings that threaten their business model. One example is the denial of man-made global warming by companies in the fossil energy sector, also driven by specially-founded greenscamming organizations.
One reason to establish greenscamming organizations is that openly communicating the benefits of activities that damage the environment is difficult. Sociologist Charles Harper stresses that marketing a group called "Coalition to Trash the Environment for Profit" would be difficult. Anti-environment initiatives, therefore, must give their front organizations deliberately deceptive names if they want to be successful, as surveys show that environmental protection has a social consensus. However, the danger of being exposed as an anti-environmental initiative entails a considerable risk that the greenscamming activities will backfire and be counterproductive for the initiators.
Greenscamming organizations are active in organized climate denial. An important financier of greenscamming organizations was the oil company ExxonMobil, which financially supported more than 100 climate denial organizations and spent about 20 million U.S. dollars on greenscamming groups. James Lawrence Powell identified the "admirable" designations of many of these organizations as the most striking common feature, which for the most part sounded very rational. He quotes a list of climate denial organizations drawn up by the Union of Concerned Scientists, which includes 43 organizations funded by Exxon. None had a name that would lead one to infer that climate change denial was their "raison d'être". The list is headed by Africa Fighting Malaria, whose website features articles and commentaries opposing ambitious climate mitigation concepts, even though the dangers of malaria could be exacerbated by global warming.
Examples of greenscamming organizations include the National Wetlands Coalition, Friends of Eagle Mountain, The Sahara Club, The Alliance for Environment and Resources, The Abundant Wildlife Society of North America, the Global Climate Coalition, the National Wilderness Institute, the Environmental Policy Alliance of the Center for Organizational Research and Education, and the American Council on Science and Health. Behind these ostensible environmental protection organizations lie the interests of business sectors. For example, oil drilling companies and real estate developers support the National Wetlands Coalition. In contrast, the Friends of Eagle Mountain is backed by a mining company that wants to convert open-cast mines into landfills. The Global Climate Coalition was backed by commercial enterprises that fought against government-imposed climate protection measures. Other Greenscam organizations include the U.S. Council for Energy Awareness, backed by the nuclear industry; the Wilderness Impact Research Foundation, representing the interests of loggers and ranchers; and the American Environmental Foundation, representing the interests of landowners.
Another Greenscam organization is the Northwesterners for More Fish, which had a budget of $2.6 million in 1998. This group opposed conservation measures for endangered fish that restricted the interests of energy companies, aluminum companies, and the region's timber industry and tried to discredit environmentalists who promoted fish habitats. The Center for the Study of Carbon Dioxide and Global Change, the National Environmental Policy Institute, and the Information Council on the Environment funded by the coal industry are also greenscamming organizations.
In Germany, this form of mimicry or deception is used by the "European Institute for Climate and Energy" (EIKE), which suggests by its name that it is an important scientific research institution. In fact, EIKE is not a scientific institution at all, but a lobby organization that neither has an office nor employs climate scientists, but instead disseminates fake news on climate issues on its website.