Are you being deceived by companies? Beware of Greenwashing
Greenwashing is the intention of companies to appear greener than they really are. Thanks to new consumption trends, consumers tend to prefer sustainable brands. Companies know this, so they use marketing to appear more environmentally friendly, but… are they really? How can we find out?
In a research project done by the Harvard Business Review in 2019, it was found that consumers actually prefer greener products. In addition, they are willing to change their consumption habits to reduce their impact on the environment. If you think you are helping to stop global warming, would you pay a little more?
If your answer is yes, you are a potential victim of Greenwashing. Companies are aware of this trend in consumers, so they just need to appear greener to benefit from it. The most common tool is marketing, where companies can use vague terms or change colors to modify their appearance.
Below are 3 examples of greenwashing to learn how to recognize it.
The most common way is to use vague terminology such as “bio”, “eco-friendly”, “green”, among others. You have probably seen this in all supermarkets. There are normally no regulations about what “100% natural” means, so brands can use it misleadingly.
Companies can also make false claims about their products. For example, in a Stan Smith sneaker campaign, Adidas claimed their shoes were made with “50% recycled materials” . Later, they were found guilty by the French Advertising Ethics Jury of misleading advertising, since only the upper part of the shoe was made with 50% recycled materials.
Another form of Greenwashing is when companies claim that a product is “carbon neutral”. In order to affirm this, companies have to buy carbon bonds, credits that allow them to “balance” the emissions generated in the production process. In this way, the only effort that greenwashing companies make is monetary. Likewise, it is common to buy these bonds from shady carbon markets without ethical principles. (More on this in next week’s article)
On the other hand, companies get a rating based on ESG (environmental, social, and governance) in the investment world. Just as consumers are attracted to sustainable products, investors are attracted to companies with good ESG. However, they also face the problem of false or misleading claims. To deal with this, as he recounts in a Bloomberg article (2021), Andy Moniz created a tool using natural language processing and machine learning to assess actual ESG risk within companies. In this way, his firm makes investment decisions based on ESG factors and is able to profit from them.
Finally (and sadly) this is a more and more common trend, companies will keep posturing as more green than they actually are as long as it keeps working. So, now that you understand what Greenwashing is, it is your responsibility not to be the victim. You will be a more aware consumer (or investor) and you will doubt when you read “green”, “bio” or “ESG”. In this way, through the small individual decisions we make, we can guide companies to actually implement green policies: another step towards saving the planet.
