What is greenwashing?

Greenwashing is on everyone's lips. Customers want to avoid buying green-washed products. And companies that are serious about Sustainability want to avoid greenwashing. We explain the basics and point out ways to avoid it.

Contents

• Definition and examples
• Reasons for greenwashing: Why do companies carry out greenwashing campaigns?
• Effects of greenwashing: What are the consequences for consumers, companies and the environment?
• Conclusion for companies

Definition of greenwashing

Greenwashing is usually understood to be a PR technique in which companies deliberately create the impression of being environmentally friendly, even though this is not true. There are many reasons why companies engage in greenwashing, such as to enhance their brand and attract more customers. Unfortunately, this often leads to confusion and misunderstanding among consumers and can even be harmful to the environment.

However, we also realise that not all companies knowingly engage in greenwashing, but often unintentionally. This happens in particular when the company works on sustainability issues that have comparatively little impact due to a lack of knowledge and overlooks its major levers.

It is important for customers to engage with the topic, as it is becoming increasingly important in today's society to make responsible purchasing decisions that take into account both our own interests and those of the environment. By understanding this, they are able to critically scrutinise companies and make an informed decision. In turn, companies should understand when they are in danger of greenwashing.

Examples of greenwashing

An example of greenwashing is when a company claims to produce environmentally friendly products, even though most of the production is done in an unethical or environmentally damaging way. Another example would be when a company markets a small portion of its products as environmentally friendly, while the rest of its offering is not sustainable.

Greenwashing can take place in various ways. For example, by using "green" symbols or slogans on products without implementing actual improvements in terms of sustainability. It can also be done by using "green" keywords in marketing campaigns without actually reducing the environmental impact.

To make such incidents visible to customers, there are special negative awards. One of these in Germany is the golden vultures.

It is important to be aware of these actions by companies as it makes it difficult for consumers to actually identify sustainable products. Additionally, it can also lead to companies neglecting their sustainability efforts. This happens when they rely on their green image being enough to attract customers. To avoid greenwashing as a company, it is important to build your sustainability practices in a way that is authentic, customer-centred and based on true impact.

Reasons for greenwashing: Why do companies carry out greenwashing campaigns?

There are many reasons why companies carry out greenwashing campaigns. One reason may be to improve their own image and present themselves as an environmentally conscious company. This can be particularly attractive as consumers are becoming increasingly conscious shoppers and looking for environmentally friendly options.

Another reason may be that companies are trying to divert attention from less environmentally friendly practices. For example, they can use a green marketing campaign to distract from or minimise their negative impact on the environment.

In some cases, greenwashing can also be used to justify higher prices for environmentally friendly products or services. Companies can use this to suggest that their products are particularly sustainable and therefore deserve a higher price.

It is important to note that greenwashing is not always malicious. Some companies actually believe that they have environmentally friendly practices and may not realise that they are in fact greenwashing.

Effects of greenwashing: What are the consequences of greenwashing for consumers, companies and the environment?

The effects can be equally harmful for consumers, companies and the environment.

For consumers it can mean that they think they have made an environmentally friendly choice but buy products that are harmful to the environment. This can have both financial and emotional costs when consumers later realise the true impact of their purchasing decisions.

The companyGreenwashing companies risk their reputation and trust among consumers. A scandal that is uncovered can lead to reputational damage and a loss of customers. The Dieselgate scandal, which caused VW to suffer a major loss of image in terms of sustainability, is an impressive example of this.

In the long term, it can for the company lead to a loss of progress in sustainability as it confuses consumers and can make them less willing to support environmentally friendly products.

The environment itself also suffers from greenwashing. Consumers are discouraged from actually choosing sustainable alternatives that could help improve the environment. Instead, they may buy products that are manufactured under poor working conditions or that harm the environment.

It is important that companies understand the effects and types of greenwashing. This is the only way they can ensure that they are actually committed to sustainability and that they do not run the risk of greenwashing.

Conclusion for companies

Greenwashing is an ever-increasing danger for companies. Many companies do not greenwash on purpose, but often "by mistake". This is mainly due to the fact that companies are not aware of their actual impact and invest energy in issues that only help the environment to a limited extent. One Materiality analysis and Sustainability strategy help enormously in implementing sustainability authentically and communicating this authentically and transparently in the next step. In our In the follow-up article, we show how to avoid greenwashing can be realised.