Compliance Washing: The Delicate Frontier between Authenticity and Appearance

In recent years, an increasing number of organizations, whether public or private, for-profit or not-for-profit, have sought to project an image of environmental commitment. This phenomenon, known as greenwashing, involves marketing and public relations efforts to appear ecologically responsible, even when such a stance does not reflect the company's operational reality. The goal behind this strategy can vary from increasing sales to obtaining a more favorable image among consumers and society at large, often aiming to achieve both simultaneously.

However, it is important to note that sustainability claims made by these organizations are not always false. In many cases, the narrative of social responsibility, sustainability, and adherence to Corporate Social Responsibility (CSR) criteria is meticulously crafted and presented convincingly but without generating tangible and lasting benefits for the community. A deeper analysis reveals that many initiatives fail to report on the real or potential impacts on stakeholders and vice versa.

The first to notice these discrepancies between speech and practice are often the organizations' own employees. Moreover, high turnover can pose a significant risk to these "unsustainable sustainability strategies."

There are various ways to practice greenwashing, and the line separating authenticity from appearance is extremely thin. It is particularly evident when companies attempt to excessively convince consumers without actually changing their products or practices.

An example of this can be observed in companies that capitalize on market trends without making substantial changes to their products. For instance, a cosmetic company that promotes a line of products as vegan and "cruelty-free," without a real need to modify its formulation or testing practices.

Similarly, a fast-food chain that announces the elimination of plastic straws and lids, aiming for a more sustainable image but without offering ecological alternatives or price reductions, illustrates another facet of greenwashing.

In addition to organizations, individuals such as journalists, celebrities, athletes, and politicians can also adopt greenwashing practices, seeking to increase their popularity or legitimacy through a supposed environmental concern.

The phenomenon of compliance washing emerges as an extension of this concept, referring to deceptive practices of regulatory or ethical compliance. Identifying and classifying these practices is crucial, as it allows stakeholders to recognize when they are being misled.

Types of compliance washing include false compliance, where an organization pretends to adhere to norms and regulations without actually implementing them; conspiratorial compliance, where there is a tacit agreement between companies to feign compliance; inconsequential compliance, which promises more than it delivers; external-only compliance, focused on creating a positive image without significant internal changes; and deceptive measures, where compliance management appears superficially positive but does not reflect reality.

1. External-Only Compliance | Organizations showcase trendy practices such as diversity, inclusion, human rights, occupational health and safety, anti-corruption, and sustainability without actually implementing them internally.
2. False Compliance | Creates a positive appearance with documents, statements, and formalities without real implementation. Example: Code of Conduct, integrity policies, and appointing a Compliance Manager without actual actions.
3. Conspiratorial Compliance | A variant of false compliance where the organization and the client informally agree to present evidence of a compliance program without actually implementing it. Both parties know it's just "for show."
4. Inconsequential Compliance | Attempts to convince stakeholders that the organization is engaging in certain practices when, in fact, these are incomplete. Examples include dividing suppliers into groups with applied controls, training to mitigate bribery risks with low participation.
5. Deceptive Measures | Compliance areas measure their activities but present misleading numbers to appear effective, not matching the actual level of irregularities, fraud, and other contingencies.

It is evident that such practices, far from adding value, can significantly harm the reputation and trust of stakeholders. The truth, sooner or later, comes to light.

Finally, it is fair to recognize organizations that genuinely strive to adopt responsible and sustainable practices, investing in research and development, listening to, and effectively managing their social and environmental impacts. These are the entities that choose a path of integrity and trust, building a solid and sustainable reputation over time.

Sources:

• Delmas, Magali A., & Burbano, Vanessa C. (2011). "The Drivers of Greenwashing". California Management Review, 54(1), 64-87.
• Laufer, William S. (2003). "Social Accountability and Corporate Greenwashing". Journal of Business Ethics, 43(3), 253-261.
• Compliance washing: a linha tênue entre o ser e o parecer, Cronista, 2022
• Siano, A., Vollero, A., Conte, F., & Amabile, S. (2017). "“More than words”: Expanding the taxonomy of greenwashing after the Volkswagen scandal". Journal of Business Research, 71, 27-37.