Joyce Sano, FGV-EAESP runner-up in the CoBS 2020 CSR article competition, takes a caustic look – not without a twist of provocative humour – at corporate greenwashing and how companies can or cannot get away with it.
Are you tired of your customers constantly nagging for more “environmentally friendly products”? Those silly boycott threats? What about the tree-loving, hippie-dippie, third-eye-open, avocado-toast “woke” barefooted youths throwing rocks at your tinted windows? Me too.
This is a complete guide for the savvy entrepreneur who is looking for a quick and easy solution to conform to this green trend — without compromising well established processes nor incurring unnecessary costs in big changes. This clever solution even has a technical term: greenwashing. It literally means that you take what you already have and simply dip it in green paint. Well, no, not literally. Well, actually, I admit that’s a big part of it (Have you seen the Coca-Cola Stevia can, or the Bic EcoLutions BioPlastic razors, or even the infamous Huggies Pure & Natural?).
Fine, if you’re so serious about this, I’ll give you a serious definition. Greenwashing is “(Verb) Misleading publicity or propaganda disseminated by an organization, etc., so as to present an environmentally responsible public image.”
Harsh! This is copy-pasted from the Oxford English Dictionary; it doesn’t get more official than this. Another, more elegant interpretation for greenwashing is undue positive communication of a firm’s environmental performance (Delmas & Burbano, 2011). Anyway, it’s making us look like the bad guys here. Allow me to refute this beyond any doubt: my therapist says I am not a bad person, and neither are you. Yes, we talk about you. If you don’t have a therapist yet, you can take 2 minutes each morning to look at the mirror and convince yourself that you’re a great guy, but it doesn’t feel quite as real as when you pay someone $50/hour to do it for you.
“But, but, Ms. Author, does greenwashing truly work? Do people really buy it? What if someone finds out?” How dare you. Look into my eyes. It is nigh punishable by law for any article on this subject NOT to point out that by 2009 over 75% of S&P companies had a “Sustainability Page” on their websites, where they made their social and environmental conduct known to the public; or that simultaneously, 98% of the allegedly green products had been found guilty of one of the Seven Sins of Greenwashing detected by Terrachoice. Keep gazing into those black, lifeless depths. If it wasn’t good for business, then why does every successful company do it? Now, that’s a bulletproof argument. Does hesitation still make you touch your forehead, turn your face away from that green, green cash? Then keep on reading.
This subtitle is GMO free!
Oh, naughty! You want to be convinced that bad, huh? So, the benefits of greenwashing. It’s not all about aggregating value to an underwhelming product, you know. The image of a caring, conscious company helps to retain employees and makes you an attractive employer. Green funds are also growing in leaps: according to Bloomberg, as of June 2018 they amounted to US$ 30,7 trillion — exactly a third of the assets being monitored around the world by the Global Sustainable Investment Alliance (GSIA), and 34% more than it was just 2 years prior. This is not out of the sheer goodness of the investors. Sustainable companies have steadier cash flows, which supports growth, and provides a safety net in hard times. The standard for the GSIA is not even that high, and a fund can be considered green by adopting the most basic sustainability strategy of refraining from investment in the Four Uglies: tobacco, alcohol, oils and weapons. Most of the green funds are accumulated in this strategy, so if you’re none of those you might stand a chance. If your company is brown and still an inexperienced greenwasher, you can also differentiate yourself by searching “environment+social+governance+rules”, or simply ESG, and peppering the results throughout your company website over pictures of the Amazonian jungle, like the perfect seasoning for overcooked chicken breast.
There are increasingly demanding investment criteria: stimulating shareholder and corporate board participation, implementation of recognized norms, being the best in quality, being sustainability-focused, and impact-based or community oriented. Those are some great words to throw around, if you’re tired of Bio-this, Eco-that, but now you have to back them up.
I briefly mentioned the 7 Sins of Greenwashing, coyly not explaining them to keep you interested, but now I shall lift the veil if you haven’t googled them already. They are (1) Hidden trade-off: a product has some positive environmental characteristics, and many concealed negative ones (see the carbon emission of electric car manufacturing); (2) No proof: the environmental allegation is not backed up by valid public data; (3) Vagueness: employment of expressions with no explicit definition — avocado is all-natural, so is mercury; (4) Irrelevance: claim is fact-based, but not at all a differential; (5) Lesser of two evils: competing to be perceived as the green brand in an overall unsustainable sector (check out my gun— it’s got lead-free bullets!); (6) Fibbing: just straight-up lying (see the infamous Volkswagen scandal), and (7) Worshipping false labels: fabricating a certificate or third-party commendation (see the Johnson & Johnson scandal—not as much fabrication as lack of transparency, but still).
My point is, they’re onto us. Our strategies, the words we say, the ones we don’t, and all the marketing expenditures. If you catch a suitor’s eye, prepare to be scrutinized.
Crime and punishment
What is the risk of getting caught green-handed? Gone are the good old days of the Industrial Revolution when companies could employ child labor and emit carbon to their heart’s content. Now, organizations such as CorpWatch, NGOs, investors, buyers and the whole Scooby-Doo gang are dead-set on busting us for any claim we make.
Having your greenwashing operation exposed can lead to the following, increasingly aggravating scenarios:
- Unbearable shame: at least you don’t feel dirty anymore;
- Product loses market: this happens mostly for greenwashing directed towards the final consumer. A study in the behavior of clients of Brazilian supermarkets found that after becoming conscious of a product’s greenwashing they let risk and confusion affect their decisions, whereas previously those factors were ignored in lieu of good feelings toward the product. As a result, they might decide against a repeat purchase (Braga Júnior, et al. 2019);
- Boycott: when the consequence of unsustainable practices is so outrageously bad that the people protest by unconditionally refusing to buy a product. Shell, even if the higher-ups were not aware of it at the time, was responsible for the wrongful trial and execution of peaceful activist Ken Saro-Wiwa, who spoke against their pollution and exploration in Nigeria. What followed was a wave of boycotts, a movement which even if it lost its force, continues now years after Shell’s attempt to show reformation, and present itself as a renewable energy company, without changing anything in Nigerian operations. And finally,
- Lawsuit: this is much more probable if your sin is fibbing. Dieselgate was the falsification of 11 million car motors’ emission test results by Volkswagen. A study goes as far as relating 5,000 deaths just in Europe to the uncontrolled pollution. Cue mass legal action, deep-diving stock prices, and kissing €30 billion goodbye.
How to get away with murder
Shell didn’t get away with it. Seems like punishment is inevitable, given the tenacious examination you’re put through once you paint yourself green. The harsh, organized response of consumers, that — who’d say? — actually care about the world we live in, is also nothing to sneeze at. Nonetheless Shell also kind of did get away with it. How?
The afore-mentioned consumer behavior study in Brazil makes an interesting recommendation in its conclusion: if you are going to greenwash, restrict it to your packaging. The effect, as you all saw, is some disappointment from the customer — who really should have known better, right? Who hasn’t been lied to? — and the eventual fading out of your product from the shelves. This has been posed as an inevitable fate. Since this study was done for supermarket clients, and thus referred mostly to consumer goods, an interesting question to ask yourself is what is the packaging of a service, or the packaging of a company, and how are they greenwashed in turn? But the answers seem to veer too close towards fibbing territory to be safe.
Another alternative is, be big. Then you can become a lobbyist. Publish ads about reducing carbon emission, but by all means vote against tighter regulations. Yeah, I hate politics too. Anyway, chances are that if you’re big enough, you’re already greenwashing at some level, and have already considered lobbying. If you sell commodities like Volkswagen and Shell, you took a heavy, but not deadly blow. How lucky for you guys, shame all those people died.
And finally…become sustainable. Think about it — someone’s little fingers are chipping away at the greenwash, just salivating for that patch of brown and to run and tattle on their blogs, and what do they find underneath? Green! It’s genius. Here’s what you do: greenwash a little, maybe on your website. Then, commit to the farce. Become the role. Invest in innovative solutions. Implement community programs. Treat your employees well and pay them fairly. Engage your collaborators and listen to their needs. Understand the entirety of your supply chain and accept no infringement of regulation, legal or self-imposed. Publish sustainability reports, even if the numbers are not so good. They will never know that deep, deep in your essence, you’re a dirty greenwasher.
The grass is greener on the inside
Well, does greenwashing pay? It depends. A lot of companies do it as an embellishment of their product, we see no grave consequence as we have heard of graver sins. Sticking to greenwashing only in the package is safer, and may sell a lot at first, but once greenwash is brought to light, product death is quicker.
The benefits of being a green company, such as becoming more attractive for workers and investors cannot be fully reaped by greenwashers. The fact of the matter is, once a company makes any declaration on their environmental performance, they are as good as stuck to their word. Corp watchers, NGOs, and investors will dig deep. The company will either succumb disgracefully under investigation, or be elevated in righteousness by it. It does not decide its own fate after its decision to deceive or be truthful.
Unless…it rises to its own challenge. Greenwashing could be the announcement of a goal, and ensuring that your company is evaluated accordingly. When you’re stuck between a rock and a hard place, between demanding customers, important investors, third-party investigators, your workers – know that this was your own doing, and be deserving of such high expectations. You exist to help people, after all.
Learn more about the Council on Business & Society
- Website: www.council-business-society.org
- Twitter: @The_CoBS
- LinkedIn: the-council-on-business-&-society
Discover Responsible Business and Leadership. Download Global Voice, the Council’s quarterly eMagazine:
The Council on Business & Society Global Alliance is an international alliance between seven of the world’s leading business schools and an organiser of Forums focusing on issues at the crossroads of business and society – The Council Community helps bring together business leaders, academics, policy-makers, students and journalists from around the world. Follow us on Twitter @_The_CoBS . Visit the Council’s website for a host of information, learning opportunities, and free downloads.