The term ‘Greenwashing’ has found itself nestled within everyday conversations when it comes to businesses and climate action – but what is it exactly? Greenwashing is a portmanteau of whitewashing, the act of deliberately ignoring or glossing over an issue, and green action, or projects aimed at reducing environmental damage. As such, greenwashing refers to the glossing over issues of environmentally unfriendly business actions by dissimulating them or misleading the public [1-3]. The term has become commonplace in the past decade as businesses seek to attract consumers who are increasingly becoming more interested in sustainable goods and services.
To do so, businesses highlight how environmentally-friendly their product is, how the processing or sourcing of materials is in line with fair trade and sustainability, and sometimes even just suggesting they are green using language and color schemes (above). However, companies engaging in greenwashing are never truly taking action to make their businesses green, but are misleading consumers in order to profit [1-4].
Examples of Greenwashing
Greenwashing is relatively commonplace. Major companies and small businesses have been identified as greenwashers – a label that is hard to shed and affects their reputation [1, 4, 5].
One example is the car manufacturer Volkswagen. The company was caught faking their emissions reports on several lines of their diesel vehicles in 2015. Branded as the most environmentally-friendly diesel vehicles on the market, Volkswagen capitalized on consumer demand for affordable low-emission transport . However, the US Environmental Protection Agency (EPA) realized that the German manufacturer had rigged the testing, and the cars actually produced up to 40 times more emissions than actually advertised. Volkswagen denied directly misleading the public, saying they misunderstood the testing requirements, but the damage was done. Labeled a greenwasher, the company’s stock plunged as it was faced by class action lawsuits from around the world and several billions in fines .
While Volkswagen was caught in the act falsifying data and misrepresenting its product, there are several other types of greenwashing. Fossil fuel companies are known to participate in greenwashing involving misdirection by presenting themselves as key businesses in the renewable energy field. They highlight their investments in emerging technologies and carbon-reduction measures – yet they continue to prospect for new fossil fuel extraction sites and do not roll back on current production . Likewise, specific fossil fuel lobbies have attempted to greenwash their energy sources. Coal has tried to rebrand itself as “clean coal” without explaining what made it ‘clean’, while natural gas companies have presented themselves as a low-emission fossil fuel that has even been branded ‘green’ by major economies, this despite natural gas still producing far more emissions than renewables.
Branding, marketing and advertising are actively used to create the illusion of science-based, sustainable climate action [1-3]. Retail giant Walmart recently announced plans to shift to a low-carbon operating model, following a similar move by other major companies. Yet Walmart’s framework does not include Scope 3 emissions which includes its high-polluting supply chains, while other businesses have taken theirs into consideration . The aviation sector has actively come under fire for similar reasons, offering passengers to add a carbon offset donation that supposedly would counter the emissions of their flight – something a recent investigation by The Guardian disputes .
The examples above are just some of the types of greenwashing that can be encountered on a daily basis. While it may seem as though it is more pervasive than first thought, there has been a movement to counteract greenwashing which involves taking actual action to reduce emissions and embrace a sustainable business model . Consumers are demanding more sustainable products, but they are also becoming more adept at recognizing greenwashing. As such, the best way to appeal to them and provide sustainable goods or services is by doing just that and shifting your operations to become more environmentally-friendly. It can’t be greenwashing if you are actually taking concerted actions to reduce your emissions and supporting sustainability. Have you thought about whether or not you may be greenwashing, and have you thought about the opportunities you may have to make your business sustainable?
- Greenwashing carries large reputational risks capable of greatly impacting financial bottom lines;
- There are multiple types of greenwashing that use marketing and advertising as a way to hide the true impacts of a good or service;
- The best way to ensure you are not greenwashing is by embracing a sustainable business model and taking stock of the opportunities to do so.
 Bruce Watson, 2016, “The troubling evolution of corporate greenwashing” The Guardian
 Knut Haanaes, Frédéric Dalsace & James Henderson, 2021, “How to identify greenwashing”, Institute for Management Development
 De Freitas Netto, S. V., Sobral, M. F. F., Ribeiro, A. R. B., & Soares, G. R. da L. (2020). Concepts and forms of greenwashing: a systematic review. Environmental Sciences Europe, 32(1).
 Eloise Barry, 2021, “As More Companies Make Net-Zero Pledges, Some Aren’t as Good as They Sound”, Time Magazine.
 Geoffrey Smith & Roger Parloff, 2016, “Hoaxwagen: How the massive diesel fraud incinerated VW’s reputation—and will hobble the company for years.” Fortune
 Li M, Trencher G, Asuka J (2022) The clean energy claims of BP, Chevron, ExxonMobil and Shell: A mismatch between discourse, actions and investments. PLoS ONE 17(2)
 Patrick Greenfield, 2021, “Carbon offsets used by major airlines based on flawed system, warn experts”, The Guardian
 Vincent Diringer, 2022, “The Importance of Sustainable Business Models”, LEAD-WiSE.