A:

The term "greenwashing" was added to the Oxford English dictionary in 1999, where it is defined as "disinformation disseminated by an organization so as to present an environmentally responsible public image." The word, a combination of green and whitewashing, was coined by suburban New York environmentalist Jay Westerveld in 1986 in an essay about the hotel industry.

The term greenwashing is generally used when an organization spends more time and money on advertising that they are "green" or environmentally-friendly than on actually putting into place practices that are environmentally-friendly. Some organizations may do this simply as a matter of public relations.

Tools used in greenwashing could include press releases by a company which may tout various initiatives such as task forces, re-branding of products, energy or pollution reductions, etc. In reality, the company may actually be doing very little that is environmentally-friendly.

The term greenwashing can also include the practice of misleading customers about the environmental benefits of a specific product through misleading advertising and unsubstantiated claims. An example of this would be a company changing the name of their harsh detergent product from Product X to Product Green, yet the product is still the exact same harsh detergent.

For more on this, read The Green Marketing Machine.

This question was answered by Ken Clark.

RELATED FAQS
  1. Does investing in sustainable or "green" companies provide lower returns?

    To determine the kinds of returns that can be expected from investments in sustainable or "green" companies, the distinction ... Read Answer >>
  2. What are green investments?

    Green investments are traditional investment vehicles (such as stocks, exchange-traded funds and mutual funds) in which the ... Read Answer >>
  3. How do you craft an effective social responsibility policy?

    Craft social responsibility policies to brand the business, provide direction for the company's mission and motivate employees ... Read Answer >>
  4. Why is social responsibility important in marketing?

    Drive consumers toward products and services by prioritizing social responsibility in marketing to enhance the company's ... Read Answer >>
  5. Is there a difference between socially responsible investing (SRI) and green investing?

    There isn't a huge difference between socially responsible investing (SRI) and green investing; green investing is actually ... Read Answer >>
  6. What are cleantech stocks?

    Clean technology, commonly referred to as cleantech, is a term used to describe environmentally-friendly technologies that ... Read Answer >>
Related Articles
  1. Investing News

    Green Technology: A Solid Investment Choice?

    With global investing in green energy on the rise, there are abundant opportunities for environmentally responsible, financially sound investments.
  2. Fundamental Analysis

    Challenges Faced When Analyzing Green Chip Stocks

    The fact that a green chip is not yet a blue chip should not alarm investors, but they need to be aware of the differences and challenges that can arise from assuming these are durable companies ...
  3. Personal Finance

    Forget Green Stocks, "Green" Will Do

    More and more companies are "going green", but that term, in itself, can be subjective.
  4. Mutual Funds & ETFs

    Evaluating Green Equity Investments

    Learn how to find stocks that are both eco-friendly and profitable.
  5. Options & Futures

    Best In Class

    For many companies, the urge to go green is a relatively recent phenomenon.
  6. Investing

    Is it Time to Invest in Green Bonds?

    Green bonds have been growing in popularity at a rapid rate, but is it too early to invest?
  7. Options & Futures

    Top 10 Green Industries

    Put a little green in your wallet by investing in these growing areas.
  8. Investing

    Go Green with a Investment in Green Bonds

    If you want to invest in a socially responsible way, green bonds may be for you. And as the market grows retail investment opportunities will grow too.
  9. Investing News

    The 10 Fastest Growing Green Startups in 2016

    These social entrepreneurs adopt triple bottom lines that champion urgent environmental problems while generating returns for shareholders.
  10. Economics

    Save The Earth: Become A Capitalist

    Who says that capitalism and environmentalism have to be mutually exclusive?
RELATED TERMS
  1. Greenwashing

    When a company, government or other group promotes green-based ...
  2. Green Marketing

    Marketing products and services based on environmental factors ...
  3. Green Investing

    Investment activities that focus on companies or projects that ...
  4. Green collar

    A worker who is employed in an industry in the environmental ...
  5. Green Tech

    1. Technology that is considered environmentally friendly based ...
  6. Green Fund

    A mutual fund or other investment vehicle that will only invest ...

You May Also Like

Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center