Greenwashing

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DEFINITION of 'Greenwashing'

When a company, government or other group promotes green-based environmental initiatives or images but actually operates in a way that is damaging to the environment or in an opposite manner to the goal of the announced initiatives. This can also include misleading customers about the environmental benefits of a product through misleading advertising and unsubstantiated claims.

INVESTOPEDIA EXPLAINS 'Greenwashing'

The general idea behind greenwashing is to create a benefit by appearing to be a green company, whether that benefit comes in the form of a higher stock price, more customers or favored partnerships with green organizations. Even many energy companies - some of the world's biggest carbon emitters - have attempted rebrand themselves as environmentally friendly.

The tools used in greenwashing can include press releases about green projects or task forces put into place, energy reduction or pollution reduction efforts, and rebranding of consumer products and advertising materials. In actuality, the company or group may be operating in damaging ways or may simply be unwilling to make a meaningful commitment to green initiatives.

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