What is 'Greenwashing'

Greenwashing is the use of marketing to portray an organization's products, activities or policies as environmentally friendly when they are not. The act of greenwashing, also known as "green sheen," entails the misleading of consumers about the environmental benefits of a product or policy through specious advertising, public relations and unsubstantiated claims. Greenwashing is a play on the term "whitewashing," which means to gloss over wrongdoing or dishonesty or exonerate without sufficient investigation or spurious data.

BREAKING DOWN 'Greenwashing'

The general idea behind greenwashing is to create a benefit by appearing to be an environmentally responsible, "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.

The term greenwashing was created in response to the hotel industry's practice of placing notices in hotel rooms to promote the reuse of towels by telling guests that the practice would save the environment. In fact, most hotels did little or nothing to change their practices regarding water, energy and detergent use. Instead, they enjoyed the benefit of lower laundry costs. Greenwashing as a practice began with the rise of the environmental movement in the mid-1960s.

Greenwashing Evidence and Examples

To spot greenwashing, it can be helpful to compare how much money a company or organization spends on being green versus how much it spends on publicizing that its products, services or policies are actually green.

Greenwashing can take the form or changing a product's name or packaging to evoke a more natural esthetic even if it still contains dangerous chemicals or ingredients that are environmentally unfriendly to produce.

Greenwashing and Regulation

The U.S. Federal Trade Commission (FTC) has created voluntary guidelines for green marketing claims. While they do give the FTC the right to pursue legal action against misleading or false claims, compliance is voluntary. The FTC includes guidance on the following:

  • Qualifications and disclosures: To prevent deceptive claims, qualifications and disclosures should be clear, prominent and understandable. To make disclosures clear and prominent, marketers should use plain language and sufficiently large type, should place disclosures in close proximity to the qualified claim and should avoid making inconsistent statements or using distracting elements that could undercut or contradict the disclosure.
  • Distinction between benefits of product, package and service: Unless it is clear from the context, an environmental marketing claim should specify whether it refers to the product, the product's packaging, a service or just to a portion of the product, package or service. In general, if the environmental attribute applies to all but minor, incidental components of a product or package, the marketer need not qualify the claim to identify that fact. However, there may be exceptions to this general principle. For example, if a marketer makes an unqualified recyclable claim, and the presence of the incidental component significantly limits the ability to recycle the product, the claim would be deceptive.
  • Overstatement of environmental attribute: An environmental marketing claim should not overstate, directly or by implication, an environmental attribute or benefit. Marketers should not state or imply environmental benefits if the benefits are negligible.
  •  Comparative claims: Comparative environmental marketing claims should be clear to avoid consumer confusion about the comparison. Marketers should have substantiation for the comparison.

Greenwashing Examples

The FTC offers the following examples of greenwashing:

  1. A plastic package containing a new shower curtain is labeled “recyclable” without further elaboration. Because the context of the claim does not make clear whether it refers to the plastic package or the shower curtain, the claim is deceptive if any part of either the package or the curtain, other than minor, incidental components, cannot be recycled.
  2. A soft drink bottle is labeled “recycled.” The bottle is made entirely from recycled materials, but the bottle cap is not. Because the bottle cap is a minor, incidental component of the package, the claim is not deceptive.
  3. An area rug is labeled “50% more recycled content than before.” The manufacturer increased the recycled content of its rug from 2% recycled fiber to 3%. Although the claim is technically true, it likely conveys the false impression that the manufacturer has increased significantly the use of recycled fiber.
  4. A trash bag is labeled “recyclable” without qualification. Because trash bags ordinarily are not separated from other trash at the landfill or incinerator for recycling, they are highly unlikely to be used again for any purpose. Even if the bag is technically capable of being recycled, the claim is deceptive since it asserts an environmental benefit where no meaningful benefit exists.
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