What is greenwashing?
You have probably heard of greenwashing. However, sometimes it is hard to know where the line is and whether you are crossing it. Greenwashing is a major obstacle to sustainability. Greenwashing also known as “green sheen” is when an organization spends more time and money on marketing itself as environmentally friendly than it really is. It is the process of conveying false impression or misleading information about how a company’s products and service are environmental sound. It involves making an unsubstantiated claim to deceive stakeholders into believing that a company’s products are environmentally friendly or have a greater positive environmental impact than they actually do. It is important to note that greenwashing can be either intentional or unintentional.
Why does it matter?
Regardless of intent, greenwashing can incur big fines. Even if you are not fined, you can incur significant brand damage through negative publicity. That can take years to claw back
Types of greenwashing you might experience
Selective disclosure Inconsistence organizational practice No proof
Lies and irrelevance Misleading symbols Vagueness
Questionable certificates Empty claims and policies Terminology/Jargon
As sustainability becomes a central focus for businesses, the risk of greenwashing is escalating due to growing expectations from stakeholders, more stringent regulations, and the increased availability of information.
How to avoid greenwashing and guidelines to ensure your sustainability efforts are both genuine and effective.
Share Your Process and Provide context: Do not just highlight the results. Talk about the steps you are taking to become more sustainable, including the challenges you face and how you are addressing them. When you make claims about your products or services being sustainable, provide the context. Explain what sustainability means to your business and how you’re working to achieve it. Implement robust measurement, monitoring, and reporting mechanisms to track your environmental performance. Regularly assess key metrics like energy consumption, carbon emissions, waste management, and water usage
Verify Validate and Update Regularly: Sustainability is a journey, not a destination. Keep your customers informed about your progress and any new initiatives you’re undertaking. To ensure the authenticity of your sustainability claims, it is essential to verify and validate them. Avoid making false or exaggerated statements about your product’s environmental impact or sustainability efforts. Conduct thorough research, engage in carbon assessment, or seek third-party certifications to substantiate your claims. : Use clear, specific language to describe sustainability claims, and always provide evidence, such as third-party certifications or scientific data, to substantiate these claims. Make sure you can verify claims with independent, easily accessible evidence. Use visuals, symbols, and marketing materials that accurately reflect the true extent of your sustainability actions and impacts, avoiding exaggerations.
Admit Imperfections: Its okay not to have all the answers or solutions. Being honest about the areas you’re still working on can actually build more trust with your customers. Demonstrating tangible corrective actions and progress is vital in avoiding greenwashing and building credibility. Communicate your company’s sustainability initiatives, such as renewable energy usage, waste reduction programs, or supply chain transparency. Highlight key milestones and measurable goals you have achieved or are actively working towards.
Educate and Engage in Dialogue with Clients: Encourage feedback and questions from your customers about your sustainability efforts. This two-way communication can provide valuable insights and demonstrate your commitment to transparency. Empower consumers by educating them about sustainability and your company’s efforts. Develop educational content that raises awareness about environmental issues and provides practical tips for sustainable living. More importantly encourage consumers to participate in your sustainability initiatives, such as recycling programs or community clean-up events.
Full Disclosure and Transparency: The reporting landscape is currently fragmented but evolving to become more harmonized, driven by the efforts of various regulations (e.g., CSRD, EU Taxonomy, SFDR), standards and initiatives (e.g., TCFD, GRI, SASB). To avoid cherry-picking data and presenting a skewed image of your sustainability efforts, practice full disclosure. Communicate openly about your sustainability practices and impacts across all aspects of your organization, including any limitations or negative aspects. Share all information about social and environmental performance claimed including limits or negative impacts: Transparency improves trust and help you get ahead of public criticism. Communicate clearly and truthfully about the environmental impact of your products or services. Avoid exaggerated or vague statements, using clear and specific language instead
Align Actions and Communications: Ensure that your internal practices align with your external sustainability claims. Avoid inconsistencies between what you say and what you do. Set targets, a crucial step reporting. If targets are established in a structured approach, they allow for progress tracking and activities steering, which could serve as an incentive to the management responsible for target achievement.
Use Legitimate Certifications: Only use recognized and respected third-party labels and certifications that require rigorous standards and transparent processes. Stay abreast of the changing regulatory landscape, understanding that compliance with new and existing rules will help address the risk of improper reporting but require considerable time, energy and resources
Regular Audits and Due Diligence: Conduct regular audits of your supply chains and operations to ensure compliance with sustainability claims and to identify areas for improvement.
Finally, when reporting, follow the mantra, “Do what you say, report what you do.” That’s the core of ESG reporting.
