Why Greenwashing Fails as a Sustainable Approach to Green Project Management

In previous articles we have examined the importance of the green project management approach in building sustainable projects. We have also defined sustainable projects as those which consider the triple bottom line of profit, people and the planet to develop long-term solutions. The International Institute for Management Development (IMD) (2024) has defined sustainability as the core of corporate strategy for all future thinking business enterprises in 2024 and beyond. However, as companies strive to present themselves as environmentally responsible, many will focus instead on greenwashing. Greenwashing is a deceptive practice that not only undermines positive attempts at sustainability but also fails as a viable strategy for sustainability. This article will explore greenwashing, and the importance of focusing on true sustainable project management approaches.

Click to read: Learning from Island Communities: Green Project Management in Africa

What is Greenwashing?

This is the practice of making misleading claims about the environmental benefits of a product, service or the company’s practices. It usually presents as vague or exaggerated assertions aimed at portraying a false image of environmental responsibility without any substantive action to back it up. Some aspects of greenwashing include:

• Misleading labels and claims: e.g. companies using terms like “eco-friendly” or “natural” when describing their products without any actual proof or certification to back these claims. In some cases, the products described thus may even contain harmful or even recalcitrant chemicals.
• Selective disclosure: is another common greenwashing technique where a single green attribute of a product is highlighted while ignoring the other significant environmental issues the product has. For example, a product could be advertised as using recycled or returnable packaging, while the product contained within is produced with high levels of environmental waste pollutants.
• Hidden trade-offs: similar to selective disclosure, this is promoting the environmental benefit of the product while ignoring its negative environmental or even quality impact. For example, a product could be touted as being more energy efficient in its production, than that of its competitor, meanwhile several safety or quality metrics have been bypassed to do so.
• Branding Imagery and Colour Schemes: for instance, using green and sky blue coloured packaging for the products or putting images of butterflies or leaves on the packaging, to give an impression of a sustainable or eco-friendly product.
• Irrelevant claims: e.g. advertising an EU product or packaging as produced from 20% recycled materials, while knowing fully well that recent EU laws require all packaging materials consist of about 20% recycled materials. The claim is not untrue, but the advertisement is irrelevant to impact.
• Outright Lies: Sometimes companies just lie. The product could be marketed as being “25% more energy efficient” or “49% less carbon content” etc. meanwhile there is absolutely no proof or basis of comparison to back the claim.

These sharp practices, while seemingly yielding short-term benefits, are highly detrimental in the long-term.

Loss of Customer Trust and Brand Loyalty

The principal stakeholder in any project is the customer or final consumer. Unlike the 1800s where the salesman would mix linen, the milk of a cactus and ground coca leaves in a bottle, stamp on a label that says “Snake Oil from the Orient” and sell it off for a few hundred guineas before escaping to the next town, leaving hundreds of people hallucinating and dying in pain, and no one the wiser, consumers are more savvy now. Studies (Isac et. al, 2024) show that customers are less forgiving of greenwashing, with trust and loyalty nosediving as soon as it is discovered, resulting in a decline in repeat purchase and the market position of the organization.

Regulatory Risk

An objective of the project manager is to ensure regulatory compliance is maintained. Greenwashing not only flaunts this directive but also put the organization at risk of other penalties should they be discovered. New regulation and standards such as from the Advertising Standards Agency and the Competition and Markets Authority in the UK or the Sustainable Finance Disclosure Regulation and Taxonomy Regulation in the EU aim to crack down on greenwashing practices and ensure transparency and accuracy in sustainability claims. Companies caught face legal repercussions, fines and lasting reputational damage.

Reputation Management

In a world where even unfounded allegations have a huge impact on the public image of an organization, the negative media backlash in the face of true criticisms can only be imagined. It can become very difficult for such an organization to recover reputation or market share.

Investor Confidence

One of the metrics considered by investors in 2024 relates to the environmental, social and governance factors in the decision-making process of the organization. A failure to carry out proper diligence in this aspect, and instead engaging in greenwashing will completely erode confidence and result in huge financial implications as it becomes harder and harder to attract investors and maintain customer base.

So, what is the way forward?

Choose the right sustainability project

A lot of organizations, in a bid to pander to their customer base or to compete with a rival, often bite off more than they can chew with regard to sustainability projects. In my series on Choosing Right, I examine some of the pitfalls that dog such organizations and how to get around them using the three-pronged approach of:

• Aligning the sustainability project with the strategic goals of the organization
• Assessing impact and feasibility to be certain the project is possible and it would not result in worse effects
• Using clear prioritization strategies when implementing and monitoring through the process.

Click here to read Choosing Right series

Maintain Transparency

A 2021 Forbes.com article states that customers prefer radically transparent organizations when deciding who to buy from. It pays to provide clear, verifiable information about the environmental impact of all products and processes.

Validate with Certifications

If you are going to claim any successful achievement of any sustainability goal or target, you must have certifications from a third-party organization to validate the claim. Your customers feel more confident when a recognized third-party confirms your claim.

Build Better

Sustainability is not reached in a boardroom. It is the result of an active process of analysis, determination and controlled implementation. This starts from investing in research and development, to the creation of actual sustainable products and practices.

Build Credibility

The sustainability journey is a community effort. Project managers heading sustainability initiatives within their organization should be prepared to engage widely. Involving the stakeholders in the sustainability journey not only builds trust and collaboration but also build needed credibility.

Greenwashing may offer your organization a quick publicity boost, but the long-term effects are far reaching. It is an unsustainable approach to green project management. Genuine sustainability is embraced when companies build better, follow the rules, innovate safely, validate their processes and follow a clear project management process when determining their approach to sustainability. Authentic sustainable practices will pave the way for a greener and more responsible future for us all.

References

Isac, N., Javed, A., Radulescu, M., Irina, D. L. C., Zahid, Y., and Razvan, S. S. (2024).?Is greenwashing impacting on green brand trust and purchase intentions? Mediating role of environmental knowledge.?Environ Dev Sustain. https://doi.org/10.1007/s10668-023-04352-0

New EU rules to reduce, reuse and recycle packaging | News | European Parliament ( europa.eu )

Sustainability trends shaping corporate priorities in 2024 - I by IMD

What Is Greenwashing? How It Works, Examples, and Statistics ( investopedia.com )

Why You Should Be Radically Transparent With Your Customers ( forbes.com )