Greenwashing: How to Keep Your Carbon Plans Squeaky Clean

Don't get washed away - practical tips around carbon planning and disclosures without greenwashing

The term 'greenwashing' was coined by environmentalist Jay Westerveld in 1986, in an essay inspired by the irony of the 'save the towel' movement in hotels, which had little impact beyond saving hotels money in laundry costs. Greenwashing is a deceptive tactic — whether intentional or accidental — employed by companies to make customers believe that their products, services, or mission are more environmentally impactful than they are.

In a time when combating climate change is imperative, whether intentional or not, greenwashing remains an environmental concern. It undermines the efforts of companies genuinely committed to sustainable practices, making it difficult for conscientious consumers to make eco-conscious choices. Ultimately, it chips away at consumer trust in truly eco-friendly and sustainable brands.

Not long ago, we defined what ‘green hushing’ is and how to avoid it. Greenwashing is the more deceitful relative, although there are companies that own up to greenwashing. In 2021, Lego announced that within two years, it would cease to use crude oil in its bricks – and that was reported in the Financial Times. However, Lego has walked back from that commitment, saying that the new materials didn’t reduce carbon emissions.

In this blog, we'll offer specific advice on the best methods to achieve what you need to avoid greenwashing: setting targets correctly, being ambitious but achievable, owning up to issues, and most of all, having the right data, collected in the right way.

Why the greenwashing trap is no laughing matter

Greenwashing may seem like a harmless fib or a clever marketing ploy, but the consequences are far from funny. Whether intentional or not, greenwashing can lead to hefty fines and significant damage to a company's reputation. In New Zealand, the Fair Trading Act takes a dim view of greenwashing, making it illegal for businesses to mislead or deceive consumers, including claims around environmental impact. The Commerce Commission, the enforcer of the Act, doesn't take kindly to rule-breakers, with fines of up to $600,000 for companies and $200,000 for individuals.

The same is true in Australia; according to Australian Consumer Law (ACL), the penalties for greenwashing can be more than $50,000,000 for businesses and $2,500.000 for individuals. Ouch.

But it's not just about the fines – greenwashing can leave a lasting stain on a company's reputation. Negative publicity can take years to shake off, leaving brands scrambling to rebuild trust with customers and stakeholders. Even just receiving a warning, rather than a fine, can send shockwaves through a company, denting its credibility and eroding consumer trust faster than you can say "eco-friendly."

Greenwashing can also wreak havoc on employee morale and engagement. When workers discover that their employer is just spinning a green yarn and not meaningfully delivering, their trust in the company takes a nosedive. This loss of faith can lead to decreased productivity, morale, and a revolving door of talent as disillusioned employees seek greener pastures elsewhere.

And let's not forget the impact on the environment itself. By diverting attention and resources away from genuinely sustainable products and services, greenwashing not only undermines efforts to combat climate change but also undermines consumer confidence in the companies genuinely making a difference.

Who has fallen into the greenwashing trap?

Let's take a stroll down memory lane and shine a spotlight on some examples of greenwashing:

• The Alliance to End Plastic Waste (AEPW) - this Singapore-based nonprofit, backed by oil and chemical giants like Shell, ExxonMobil, and Dow, claimed to be on a noble mission to clean up plastic waste in developing countries. However, despite pledging $1.5 billion towards the cause, the AEPW failed to fulfil its promise to clean up the Ganges River in India. To add insult to injury, its member organisations continued churning out more plastic, further exacerbating the problem they claimed to be solving.
• Fujitsu's Fumble - in 2017, Fujitsu found itself in hot water in New Zealand after being slapped with a hefty fine of $310,000 for greenwashing. The Japanese tech giant made unsubstantiated and misleading claims about the energy efficiency of its heat pumps, including boasting about having "New Zealand's most energy-efficient heat pump range" without any evidence to back it up. Oops!
• The Volkswagen Debacle (aka Dieselgate) - Volkswagen, long hailed as a paragon of environmental friendliness, got caught with its tailpipe between its legs when it was revealed that the German automaker had been cheating emissions tests. VW installed sneaky software in 11 million cars worldwide to dupe regulators into believing their diesel vehicles were cleaner than they actually were. The fallout? Billions of dollars in fines, massive recalls, and a colossal blow to consumer trust – not to mention a stain on VW's once-spotless green image.
• Chevron’s shenanigans - In the mid-1980s, oil company Chevron launched a television and print ad campaign to showcase its supposed environmental dedication. However, while the infamous 'People Do' campaign was running, Chevron was actively violating environmental regulations such as the Clean Air Act and Clean Water Act, and even causing oil spills in wildlife refuges.
• Dubious DuPont - In 1991, chemical company DuPont released ads featuring marine animals dancing to Beethoven's 'Ode to Joy' to promote its double-hulled oil tankers. However, it was revealed that DuPont was the largest corporate polluter in the U.S. that year. Not a good look.

You can see how greenwashing isn't just morally dubious – it's downright risky business. So, before you start slapping on those eco-friendly labels, make sure your intentions are as squeaky clean as you claim to be. Here's how.

How to avoid greenwashing - tips for ethical marketing

Here are the tools and tactics you need to fend off the deceptive forces of eco-fraudulence and emerge victorious in the quest for transparency:

Tip #1: Substantiate your environmental claims with reliable data
You've got to be able to put your data where your mouth is. Maintain up-to-date information accessible on your website and other platforms where sustainability claims are made. Utilise only verifiable data that can be independently validated. When making environmental claims regarding your product's sustainability or green credentials, provide transparent ESG disclosures and evidence to corroborate them. Greenwashing often relies on vague language rather than factual figures. True authenticity comes from having the data and metrics to back up claims. Customers are more likely to trust a green product boasting "87.9% powered by renewable energy" than vague marketing slogans like "made with nature in mind."

Tip #2: Identify the low-hanging fruit
Regardless of your company's size or industry, begin by pinpointing green initiatives for enhancement. Whether you're a burgeoning sustainable fashion brand or a major player in product packaging, focus on easy wins — areas where waste can be minimised, materials can be recycled, or processes can be optimised. While it may require effort to identify these avenues for sustainable operation, the benefits are substantial. Embracing sustainability not only reduces overhead costs and mitigates risks but also improves engagement among stakeholders and employees. Not only that, but it creates avenues for tapping into new market opportunities, positioning your brand as a leader in environmental stewardship.

Tip #3: Leverage technology when setting targets
Harnessing renewable energy sources and upgrading infrastructure, application systems, and IT operational procedures are indispensable for reaching sustainability objectives. In addition to optimising current technologies, exploring tools for real-time measurement and tracking of carbon emissions and other relevant metrics is essential.

Businesses are becoming increasingly aware of the fact that comprehensive carbon accounting and greenhouse gas reporting extend beyond merely accounting for emissions generated by internal activities. It's imperative to also incorporate emissions stemming from purchased electricity and those attributable to the supply chain, products, and vendors. Managing these external emissions can be a complex endeavour, underscoring the importance of dedicated sustainability monitoring and tracking solutions.

Tip #4: Ambitious but achievable
When setting sustainability targets, aim for ambitious but achievable objectives. While it's essential to push boundaries and challenge the status quo, ensure that your goals are within reach and grounded in reality. Unrealistic targets can lead to frustration and disillusionment, whereas setting attainable milestones fosters a sense of progress and motivation. It's all about striking the right balance between what you want to achieve and what's feasible.

Tip #5: Be honest and transparent
We can't emphasise this enough. When it comes to communication, it's crucial that you're transparent and straightforward. For instance, if you claim your product is 'recyclable,' but its recycling is limited to specific areas, it's more accurate to specify its recyclability. Steer clear of misleading imagery such as picturesque leaves, Earth depictions, or green ticks, which may wrongly suggest superior environmental benefits. Educate your customers about the sustainability of individual products and your company's overall eco-friendly practices. When outlining plans or goals, provide specific details about targets and timelines, enabling consumers to hold you accountable for your commitments.

Conclusion - avoiding greenwashing is your ticket to authenticity

We're inundated with eco-friendly claims these days - and with good reason - so to successfully avoid greenwashing, separating fact from fiction is essential. By steering clear of greenwashing tactics, you not only safeguard your brand's integrity but also uphold trust with your customers. Remember, authenticity is the cornerstone of genuine sustainability efforts. So, get your data organised, ditch the fluff, embrace transparency, and let your true green initiatives shine through. The planet — and your bottom line — will thank you for it.

If you're just getting started on your sustainability journey, our Carbon Roadmap is an essential resource. And if you’re facing a sustainability audit or you’d like to learn more about what’s involved, make sure you check out Sustainability Audits 101 – it’s everything you need to know.

Here’s to a new year!