What is greenwashing and how can you avoid it?

Your customers care about sustainability. In fact, over the past 5 years 85% of customers have shifted to more sustainable living, and the expectations for businesses to be more sustainable and offer environmentally friendly alternatives have increased.

While some companies are embracing the trend and being genuine in their sustainability efforts and claims, others, sometimes unintentionally, are overstating their eco-friendliness. This is where “green” claims become marketing tools and businesses might find themselves guilty of greenwashing.

Want to make sure you avoid the pitfalls of greenwashing? Let’s take a look at the dangers of misleading claims, how to avoid greenwashing as a business, and what you can do to be truly eco-friendly.

Did you know that over a third of customers globally are willing to pay a premium for sustainability? For companies that means big business, so it’s no wonder many are keen to highlight their green credentials and market their environmentally friendly initiatives. But this is where companies need to be careful of greenwashing.

Greenwashing is a misleading marketing ploy, where businesses overstate, or even lie, about the environmental benefits of their products or services in an attempt to expand their customer base and win business over their competitors.

Greenwashing means a company puts more time into marketing itself as a responsible, sustainable brand, than they actually spend on minimising its carbon footprint and environmental impact. What does greenwashing look like in practice? Let’s take a look at a few greenwashing examples.

Greenwashing can come in many forms across almost any industry and can range from unintentional and accidental, to purposely malicious.

Unintentional greenwashing happens when an organisation believes itself to be more environmentally friendly than it is. This can come from inaccurately measuring emissions or not having a good understanding of the supply chain. For example, a fashion brand might overstate how eco-friendly its recycled polyester clothing is without understanding that washing polyester leads to increases in microplastics, which add to the already enormous global plastic crisis.

Malicious greenwashing is at worst, criminal, and at best is unintentionally misleading. It might take the form of a manufacturer falsely claiming they’re more environmentally friendly than they actually are. For example, it could be a chemical company promoting its work with marine life while actively leaking chemicals and violating clean water laws.

Businesses that greenwash can actually end up doing the opposite of what they set out to achieve and instead damage their reputation and drive customers away. Nowadays it's extremely easy to do some quick online research, so if you make false green claims, there’s a good chance you’ll be found out, lose the trust of customers and investors, and even suffer the fallout of negative press.

Aside from the reputational damage, it can also mean taking a financial hit. This doesn't just mean a loss in sales, profits, and investments, but there are also hefty legal fines if you’re found to be breaking the law with misleading sustainability claims.

As well as being bad for business, greenwashing can also be harmful to the environment and hamper progress towards sustainable goals.

For a start, if your business isn't taking the steps you say it is to reduce your company’s carbon emissions and be more eco-friendly, then you’re not making a positive environmental impact.

At the same time, customers, who want to be part of the solution, may believe your claims, buy your products that they think are more sustainable, and unknowingly continue to be part of the problem. For example, consumers might dispose of packaging that’s wrongly labelled as “flushable” or “biodegradable” in ways that can cause harm.

If customers lose trust in false green claims, they’re also less likely to trust and buy products that are genuinely sustainable. This impacts all of us because it means the move to more eco-friendly, sustainable alternatives will take longer and ultimately be more damaging to the planet.

If you want to avoid reputational, financial, and environmental damage, it’s important you know how to avoid greenwashing as a business. This means making a genuine effort to implement sustainable practices and communicating honestly and transparently about what you’re doing. Here are some ways to be truly sustainable and avoid greenwashing:

For any business looking to make a positive impact in the world, a carefully crafted CSR strategy is a must. In designing your strategy, think about your environmental impact. What can you do to minimise it and how can you encourage your team to be more sustainable?

Whether it’s committing to using more sustainable products in supply chains or reducing your carbon footprint through employee initiatives, there’s a lot you can do to make a difference. Take an electric vehicle salary sacrifice scheme for example. This can save over 1.5 tonnes of carbon per employee every year, helping reduce your carbon emissions and keep your staff engaged.

Accurately understanding and measuring your carbon footprint and environmental impact is important in making sure you avoid greenwashing. Invest in carbon accounting software, collect detailed data along your supply chain, or seek out verification from trusted third parties. Use data to back up your claims.

Try not to be too overenthusiastic in your claims and accidentally mislead your customers. If only 60% of the material is recycled, be specific and honest about this. If only 20% of your energy is from renewable sources, it's important that you’re transparent and highlight steps you're taking to improve this figure.

Make sure not to use ambiguous images, colours, and labelling too, like a green hue, or images of plants and wildlife that might suggest it’s an eco-friendly product or service if it’s not.

Ultimately, if you want to avoid greenwashing it’s really about taking stock as a business of where you are, taking positive steps towards sustainability, and being honest about where you are in your journey. Customers, investors, and employees appreciate transparency and a company that’s making a conscientious effort to do the right thing.