What is Corporate Greenwashing, and Why is it Harmful?

Greenwashing is a term that was coined in the 1980s but existed long before. It is a play on the term ‘whitewashing’, which is to intentionally conceal unpleasant or incriminating facts about someone or something.

In this article, we look at what corporate greenwashing actually looks like, the impact it has on the environment, and how to spot it.

What is greenwashing?

The term greenwashing is used to describe the practice of businesses conveying a false impression or providing misleading information about how their products/services are environmentally sustainable. In reality, the product/service has no, or hardly any, environmental benefits. Businesses guilty of greenwashing spend more time and money claiming to be green than actually implementing business practices that minimise their environmental impact.

Businesses guilty of greenwashing spend more time and money claiming to be green than actually implementing business practices that minimise their environmental impact.

There is increasing pressure from the public and the government for businesses to reduce their impact on the environment. Further, improving sustainability is becoming a profitable business strategy - whether that be to gain the attention of investors or consumers. As such, businesses apply greenwashing techniques to the promotion of their products to appeal to the ever growing environmentally-conscious consumer base. However, alongside this rise in demand for sustainable products, an awareness of greenwashing is also prevalent among consumers. Therefore, businesses are more likely to be caught out.

If a business is vocal about its sustainable credentials, yet doesn’t do enough to warrant the claims they are making, then they are greenwashing. Businesses involved in greenwashing behaviours might make claims that their products are made from recycled materials or have energy-saving benefits. Although some of the environmental claims that businesses make may be partly true, those engaging in greenwashing typically exaggerate their claims or benefits to mislead consumers.

What is the problem with greenwashing?

The principal danger of greenwashing is that the consumer is deceived and may continue to unknowingly fund businesses that are damaging the environment. The ongoing damage to the environment also has distinct links to an increase in the diagnosis of respiratory diseases, which means greenwashing can be harmful to public health as well as the environment.

From a business' perspective, if they are found to be greenwashing, consumer confidence will fall and they will have to find ways to rebuild this confidence. There is the potential that future legitimately environmentally beneficial products/services offered by a business that has been guilty of greenwashing may be disregarded by consumers owing to this poor reputation.

Example of greenwashing: IKEA

There are companies in all sectors and of all sizes that are guilty of greenwashing.

IKEA was long considered a key example of a major business acting sustainably. However, in June 2020, the furniture retailer was linked with illegal logging in protected Siberian forests in Russia. Investigators estimated that, on average, a product containing the suspect Russian lumber was sold every two minutes. Consequently, the wood certification scheme IKEA uses, Forest Stewardship Council (FSC), was described as an organisation that greenwashes the timber industry. The FSC was accused of failing to catch IKEA’s sourcing of conflicting wood and acting appropriately.

Previous to the illegal logging scandal, IKEA came under scrutiny in 2019 when they opened a new store in Greenwich, London. On their website, IKEA dubbed this their most sustainable store ever. However, to build the store, IKEA demolished what was the UK’s most sustainable Sainsbury’s supermarket. The primary issue with this is that the energy needed to demolish and construct a building is around 30% of the energy needed to run it over a 50-year lifespan. Although IKEA has put a lot of effort into creating an environmentally-friendly store - through features such as LED lighting, solar panels, and rainwater harvesting systems - the store should have been erected on a brownfield site to substantiate their claim of it being a sustainable store.

How do I spot greenwashing?

It is important to remember that not all businesses are involved in greenwashing. The marketers of truly ‘green’ products will be specific about their beneficial attributes.

To differentiate between true green and greenwashed products, it is advised to look out for the following:

• Packaging and advertising should explain the product’s green claims in plain language and readable type in close proximity to the claim.

• An environmental marketing claim should specify whether it refers to the product, the packaging or just a portion of the product or packaging.

• If a product claims a benefit compared to the competition, the claim should be substantiated.

For more resources on this topic, head to our dedicated Climate Crisis section.

Edited by Caoimhe Glover and Amy Watts