Why we need more, not less greenwashing

You’d be hard-pressed to find someone who describes himself as an ecological fundamentalist arguing in favour of greenwashing. I mean, the arguments against greenwashing are plentiful and well known. The practice certainly doesn’t have a good reputation. Conveying a false impression or providing misleading information about how environmentally sound a company’s products are is not only deceptive, but unethical. What’s more, there is strong evidence that greenwashing can undermine investor and consumer confidence in socio-environmental claims.

Yet this ecological fundamentalist believes there may be an upside to the wave of ambiguous sustainable messaging we’re witnessing. If we look beyond the smoke and mirrors, greenwashing may be nudging companies — and consumers — in the right direction.

Although it may feel like the term ‘greenwashing’ emerged recently along with growing consumer concerns around sustainability, the word was originally coined in 1986. Travelling student Jay Westerfeld was baffled by the discrepancy between his hotel’s requests to reuse towels to protect the environment whilst building new bungalows that encroached on nearby nature resorts. Since then, the number of companies attempting to appease consumers with sustainable-looking practices has skyrocketed, as has the number of ways to do it.

Different shades of green

Greenwashing can take a variety of forms: from well-intentioned, ambiguous statements to outright lies. However, all involve speech that fails to convert into tangible action.

At the most deceptive end of the spectrum are the companies that fabricate statements. Their statements may be entirely made up; for instance, when a company says its products do not contain heavy metals but testing proves otherwise. Companies may also exaggerate claims to win over consumers. A business may state ‘our doors are made with 100% sustainably harvested wood’ but in fact this is only true for a small percentage of the more expensive products in the range and designed to lure the consumer in. In a similar way, some claims are made to relieve the consumer of guilt but deflect away from the issue. For example, a company claiming ‘our diamonds are mined without child labor’, while omitting the fact that they are mined through slave labor in a country that is undergoing a genocide.

In the middle of the range are the deliberately ambiguous claims that are intended to benefit from the wave of support for sustainably responsible products without putting in the hard graft. These kinds of statements rely on non-defined or unprotected words, for example ‘100% natural food’, or ‘recommended by a qualified nutritionist’ instead of a dietitian. This kind of greenwashing can also rely on creating an illusion — not explicitly stating credentials but using words and images to push audiences to make positive connections. This happens when you see beautiful visualisations of nature from dirty industries, like an oil truck driving through a pristine forest. Chevron perfected the practice in the 1980s, combining illusion and deflection in a prize-winning ad series called “People Do”, which depicted its employees protecting bears, butterflies and sea turtles.

Finally, there are the companies that may have good intentions, but have not done enough to substantiate their true-ish claims. For example, a company that says ‘all its cotton is Fairtrade’ or ‘all its apparel is made without child labor’ but cannot demonstrate the origin of all of its materials nor account for the practices of its third-party suppliers. Another type of unproven claim is the ‘non sequitur’, when a company makes a valid claim and links it to a plausible implication; a carpet manufacturer that argues that its carpet tiles clean the air and therefore should be used in hospitals. Then there are factually correct claims that sound good but their benefits do not materialise. It’s true that Nespresso capsules are 100% recyclable, however the number that actually are recycled is far lower.

So why would anybody be in favour of greenwashing? I am, but not in the sense that I applaud companies who are deceiving their customers. My point is that whatever type of greenwashing companies engage in, it tends to be a step in the right direction. Speech may not be action, but it can change reality.

1. Greenwashing shows social pressure is working

We have now reached a tipping point where companies are expected to be environmentally conscious. It’s no longer a value-add or bonus on top of the product or service, it’s something that needs to be baked into the business. The majority of consumers globally say that they are willing to pay more for environmentally sustainable products. Over 80% of consumers surveyed in 2019 by Accenture said that reusability or recyclability are important in product design, nearly three quarters said they are currently buying more environmentally friendly products than they did five years ago, and 81% said they planned to buy more such products in the next five years.

Greenwashing is indicative of this social pressure to be (at least perceived as) green or environmentally conscious. It shows that environmental issues are important and that complying with nascent norms is considered to be sensible behaviour. It’s the indicator that shows environmental arguments are not being ignored by big business. It’s also self-perpetuating. The more companies that feel the urge to comply, the better, even if their actions are not 100% qualified. Herd mentality will bring even more companies on board to the benefit of the environment.

2. Greenwashing leads to accountability

Accountability is a bitch. As soon as a company makes a statement about its products or practices, that statement can be scrutinised. Scrutiny brings with it accountability and the potential for improvements. Research has found that companies with poor environmental performance exhibit less greenwashing than those with better performance. The reason is that known poor performers are facing higher scrutiny: from regulators, NGOs, civil society, local communities, and possibly militant individual community members.

Countries with stronger civil society and more vocal stakeholders create strong institutions that can effectively scrutinise greenwashing. These high standards mean that poor performing companies in these countries are especially wary of greenwashing, especially when listed on international exchanges where disclosure is mandatory. Half-hearted measures won’t satisfy the audience — their actions must be conclusively positive. The current focus on greenwashing means that the companies that engage in it tend not to be the worst environmental performers.

3. Greenwashing raises our expectations of companies

Constant greenwashing keeps us on our toes. Every time we get caught out believing a greenwashing company, we become a tad less gullible. This increases the level of scrutiny. Companies that don’t move in the right direction will not survive in the long term. There is some evidence to show that firms that are caught greenwashing do not have the same reputational benefits as those that are actually doing something good for the planet, which should encourage companies to get it right the first time round, not just for the planet but as a business imperative.

It’s becoming increasingly clear that consumers expect a level of transparency and humility from companies. A research project by Phillipe and Durand (2011) showed that firms that come clean about poor environmental performance actually reap reputational rewards in the long run. This may be because observers are pleased with the honesty of the company or alternatively, poor environmental performance triggers a change in the company that eventually leads to the reputational gains. If it leads to authentic change, the environment wins again.

Purely symbolic actions are also not as well received as authentic actions, which implies that generally people can see through the greenwashing bullshit. Even if they can’t, it’s not clear whether the symbolic actions are harmful from an ecological perspective. Yes they may, in the short term, harm a firm’s reputation (if the firm gets caught). But that in itself may be good from an ecological standpoint, provided it triggers action. Studies show that when third parties disclose information about firms, those firms tend to respond. Unfortunately, the evidence also suggests this response tapers off over time. However, with an ever-active civil society that keeps companies on their toes, the risk of tapering off reduces.

4. Speech changes mindsets

I am a firm believer that our language not only expresses our reality but also actively shapes it. What we say and how we say it is more than just an expression of our thinking, it is also a manifestation, and a constraining factor of it. Thus if companies make statements, even if they are false, they nonetheless construe a collective expectation about the company.

Malcolm Gladwell eloquently explains this phenomenon in his latest book, Talking to Strangers. He describes how human beings ‘default to truth’ — we have evolved to be compelled to believe what people tell us. The same goes for companies. And while that means we may be deceived easily by devious corporate actors, it also means that when a company says they are environmentally sustainable, we believe them. And by believing them, we expect them to behave in a way that aligns with our beliefs. This has two amazing effects. Firstly, we start considering such behavior normal and start expecting it from others. Secondly, we start seeing deviations from such behaviors as abnormal. Our mindset has changed and we have defaulted to a new normal. Through their words, companies are inadvertently changing themselves from within, with consumers shaping their direction of travel.

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In conclusion, greenwashing may be hot air, but it’s having an effect. Speech is reality. By talking about their green business practices, even illegitimately, companies are setting themselves up for accountability. They’re also contributing to a global mindset shift about the importance of sustainability, and to reputational risks. It’s the ones that aren’t greenwashing that are the real problem and should be our focus. In my mind, greenwashing balances out as having a net positive effect on the planet.