What Is Greenwashing?

Greenwashing is the term used to describe organisations misleading consumers about their environmentally friendly business practices or products. 

This is because sustainable practices are seen as an admirable commitment, particularly for larger corporations. However, there have been cases where businesses use this matter to their advantage by deceiving consumers. 

Consumers have the right to make informed decisions about the products they are purchasing and greenwashing interferes with this. 

Greenwashing can be done deliberately and even accidentally, so it’s crucial for businesses to be aware of what greenwashing is and how to avoid it. 

What Is Greenwashing?

Greenwashing occurs when businesses make false claims about how environmentally friendly and sustainable their products are. As consumers grow increasingly concerned about making ethical choices when buying, untrue statements about how environmentally friendly something can deceive consumers into purchasing a particular product. 

Example A clothing store claims a new line of t-shirts they released are made entirely from recycled materials. However, the t-shirts are made only from 10% recycled materials.  Claiming they have been made completely from recycled materials constitutes greenwashing by the clothing store.

What Is Greenwashing In Marketing?

Making false claims about the sustainable nature of a business’ practices or products can be used as a tactic to lure in consumers and potential investors. The rise of environmental concerns from the greater has made sustainability an effective marketing strategy. 

However, making these false claims for the purpose of making a profit is extremely unethical and should be avoided where possible. Businesses should only make these representations where they are entirely accurate. 

How To Avoid Greenwashing

In order to avoid greenwashing, it’s important to be transparent and honest with your audience. If your business promotes environmental consciousness, communicate clearly with your consumers exactly what is meant by this so there are no misunderstanding or assumptions. 

Other ways to avoid greenwashing include: 

• Ensuring any images that are used for advertising don’t give a false impression of how environmentally friendly the product is
• Avoid the use of language that is broad or ambiguous, leading consumers to misunderstand what is actually meant by the statement
• Be clear and concise on any product information labels about the materials used, where it was made, sources it was derived from and manufacturing methods. 

CMA Guidelines On Greenwashing

In September 2021, the Competition and Markets Authority (CMA) made an announcement that they will be closely reviewing any misleading claims or greenwashing practices that businesses engage in.

The CMA published the “Green Claims Code” to help businesses comply with their consumer obligations. In other words, it advises businesses on how to advertise their environmentally-friendly practices without misleading consumers, thereby breaching laws.

Generally, however, businesses that claim to be environmentally friendly should:

• Explain exactly what they mean when using terms such as eco friendly and other environmental-related jargon 
• For investors, sustainability should be explained extremely concisely to avoid misleading them 
• All products should be labelled clearly and free from any ambiguity 

What Does The Consumer Law Say About Greenwashing?

Making claims that are not true about a product or businesses sustainability and environmental impacts gives consumers a false idea of what they are purchasing. 

As a result, consumers are misled into buying something different to what they thought they were purchasing, amounting to misleading and false claims.  

Misleading claims, false statements and deceptive conduct are all strictly prohibited by consumer laws. This this extends to environmental and sustainability claims as well. 

Therefore, not only is greenwashing extremely unethical, but it’s also against the law. 

False Advertising Laws

In the UK, advertising practices are regulated by the Consumer Protection From Unfair Trading Regulations. Under this law, you cannot mislead consumers by providing false or deceiving messages, omitting important information or using aggressive sales techniques.

Example A cafe stating they donate 10% of every customer’s purchase to their local food bank and then not doing so is engaging in false advertising.

Example Another example of false advertising would be claiming a particular product is made entirely out of bamboo when there are other materials used to make the product as well.

Greenwashing does something similar by not giving customers the full picture, leading consumers to believe something different about their business, engaging in hypocritical practices and even outright lying about their business in order to seem more socially aware to attract more business. 

How Your Business Can Avoid Misleading And False Claims

Businesses can avoid misleading claims and false claims  by actively making sure their customers are well informed about their business and the products or services it sells. This can be done by: 

• Making sure all important information is stated clearly and on the product or website- avoid using fine print
• Be reachable to answer any questions consumer may have about the products 
• Use plain and simple language that is easy to understand, avoid using unnecessarily complicated terms
• Information should be located in a place that can be easily seen and accessed – don’t make consumers jump through hoops to get product information   

What Are The Legal Consequences Of Greenwashing?

As greenwashing is outlawed by consumer protection laws, legal consequences can apply for businesses that are found to have engaged in it. These consequences will likely depend on the severity of the offence however, fines and warnings are often issued to businesses that have been determined to greenwash. 

Aside from the legal consequences of greenwashing, using greenwashing tactics can negatively impact your business’s reputation. Misleading customers breaks the trust you have with them and building back a business’ reputation is not an easy process. 

It’s important to be upfront and honest with your audience from the very beginning to avoid such situations.  

Examples Of Greenwashing

Greenwashing can be conducted in multiple forms. This can be in the form of: 

• Misrepresenting the materials or manufacturing process of a product 
• Claiming a product is hand-made when it is only partially made by hand and mostly by machine
• Fabricating how many emissions a particular product causes
• Using terms, colours and picture to invoke the idea something is environmentally friendly 

Greenwashing Claims Against H&M

Recently, H&M found itself at the centre of greenwashing claims due to a tool on their website. 

H&M’s website had a tool that let its users see the sustainability of a number of its products using the Higg Materials Sustainability Index. The tool gave certain products a sustainability rating based on factors such as the materials the clothing was made from or how it was manufactured, assessing its carbon footprint. 

However, this tool was taken down as it was not showing a full and accurate depiction of how sustainable the garments actually were. 

The H&M example reinforces the concept that businesses cannot simply choose which parts of their practices they would like to be transparent about. In order to avoid engaging in greenwashing, it’s important for businesses to be completely transparent about their products and business practices. 

How To Make Your Business More Sustainable

There are a number of ways to reduce your businesses carbon footprint and make it a more environmentally conscious brand. It is not necessary to make drastic changes, however, even the smallest changes can be a step towards building a more sustainable venture. 

A few ways to make your business more sustainable can include: 

• Using plastic free packaging 
• Reduce waste 
• Get solar energy panels for work spaces
• Allow employees to work remotely to cut down on travel 
• Go virtual- stop using paper and start making the use of online documents 

The practices you can and cannot implement will depend on your individual business, so review your current practices and see what can be improved! 

Key Takeaways

Greenwashing is a serious matter that businesses should avoid at all costs, whether it’s deliberate or intentional. To summarise what we’ve discussed: 

• Greenwashing is making false or misleading statements about how sustainable a businesses practices actually are
• There are different ways to engage in greenwashing, such as deliberately lying, not giving all the facts and being a hypocrite 
• Greenwashing is a breach of consumer protection laws and as a result, it can have legal consequences 
• Businesses claiming to be sustainable or environmentally friendly must be explicitly clear and transparent with their customers
• Generally speaking, businesses should communicate clearly with their audience in order to uphold their obligations under consumer laws 

If you would like a consultation on greenwashing, you can reach us at 08081347754 or [email protected] for a free, no-obligations chat

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