Sustainability is key to profitability – it’s big business, a $12 trillion per year kind of big. With companies adopting climate-friendly strategies seeing returns of up to 80% and eco-products growing 7x faster than traditional products, businesses are keen to join the party. But in their haste to capitalise on the growing interest in climate change, many companies (often in ignorance) are falling foul of greenwashing.
The term ‘greenwashing’ was coined by Jay Westerveld in 1986 following the hotel industry’s ‘save the towel moment.’ Hotels placed notices asking guests to reuse their towels and protect the environment. In reality, the companies benefitted from lower laundry costs, yet water consumption remained the same.
Simply put, greenwashing is creating a false impression or a misleading claim that a company’s products or operations are more sustainable or environmentally sound than they actually are. Often used to capitalise on the growing interest in climate change, consumer demand for sustainable products and investor focus on ESG products, greenwashing repositions and rebrands companies with inaccurate or unsubstantiated information about their environmental and social impact, such as recycled packaging, carbon footprint and worker conditions.
Greenwashing is a phenomenon that harms both the consumer and honest, ethical companies that put the environment at the heart of their business strategy. Greenwashing is also a barrier to sustainable development because it confuses the issues and provides inaccurate information to an already bombarded public. High-profile greenwashing campaigns include McDonald’s banning plastic straws and Coca-Cola using 50% recycled materials in their packaging.
But what can you do to ensure that your business doesn’t fall into the greenwashing lair?
10 Actions for your Business to Avoid Greenwashing
1. Proof: Use data and evidence. Make sure any claims you make about eco-friendliness e.g. “made with organic materials” are backed by data. Always do your research and consult sustainability experts and credible bodies such as the UN Global Compact and SBTi.
2. Avoid Greenspeak: Buzzwords and vagueness are immediate signs of greenwashing. The Advertising Standards Authority says this is the area it receives most complaints about. In 2019, the advertising regulator banned a Ryanair ad claiming to be the airline with Europe’s lowest emissions; a Hyundai campaign purported one of its car models ‘cleaned the air’ and many products misleadingly use unfounded phrases e.g “made with natural ingredients” instead of showing USDA organic certification. Others claim to be “vegan approved” instead of showing the product is PETA-certified vegan. Sometimes, all it takes to greenwash is to market products in visually pleasing packaging. A tissue company might have green leaves on its box to imply the paper was harvested sustainably when in fact it isn’t.
3. Be transparent: Selective disclosure is a common tactic. Don’t hide information or tell half-truths about eco credentials. If you are not there yet, say so. Broad vague statements mean nothing and won’t stand up to scrutiny. Examples include: ‘new and improved, ‘non-toxic,’ and ‘made with biodegradable materials.’ The package around a plastic toy might be labelled “recyclable” without making it clear whether it’s referring to the package, the toy, or minor components of either. Often, companies highlight positive environmental facts about their products while intentionally avoiding any mention of the negative. For example, fashion brands may promote clothes made of "sustainable" fabrics, even if the rest of their clothing line is damaging to the environment. A company could claim to be environmentally-friendly, but not take into account supply-chain emissions from a coal-powered overseas factory used to make part of a product. Patagonia, is a good example of a business that understands it can appeal to a bigger audience if it doesn’t use fossil fuels. That’s why it funds activism and research, while simultaneously trying to stop using fossil fuels in its products. This transparency is seen as being green, it’s model of ‘not perfect but trying’.
4. Be Cautious with Offsetting - A government, business or individual can attempt to balance their own emissions by finding other ways to remove an equivalent amount of greenhouse gases from the atmosphere. The process is called carbon offsetting. But environmental groups argue this is kicking the problem into the long grass rather than dealing with the issue of actually cutting emissions. With companies under increasing pressure to decarbonise, some are turning to offsetting as a quick fix. David Barmes, senior economist at the campaign group Positive Money, says offsetting is the most popular form of greenwashing. "It's riddled with fraud and allows firms to claim they're meeting emissions targets while they continuously pump emissions into the air…The whole point of offsets is to allow these corporations to keep emitting with impunity and allow governments to claim they are meeting targets." It’s clear that mitigation work such as tree planting (which has its validity) will not be sufficient on its own to offset carbon emissions for the long term, we need to be eliminating the use of fossil fuels.
5. Sustainable by Design: Green Products are designed sustainably from the outset. Products have minimal packaging, are free of toxic materials, can be recycled or are made from recycled or biodegradable materials, they are designed to be repaired or reused (not for obsolescence) and make a positive contribution to the planet with social impact embedded within their life cycle or supply chain. Similarly, services are designed putting social and environmental considerations at the centre.
6. Certify as a B Corp: A B Corp is a certification of a for-profit business that designates it achieves high social and environmental performance, establishing as a business for good, not just profit. B Corporations make legal commitments to corporate governance that is accountable to all stakeholders and transparently discloses its performance as leaders in a global movement for an inclusive, equitable, and regenerative economy. B Corp status is open to all businesses, requiring rigorous analysis of its impact and risk, then verification of and adherence to performance and reporting standards to achieve certification. Patagonia, for example, has been a champion of this business certification model and exceeds stringent standards for sustainability and worker’s rights, including Fair Trade certification for many products. Likewise, all retail stores, distribution centres, offices, and the brand’s headquarters are powered by 100% renewable energy.
7. Fair Pay and Ethical Labour: Sustainability also refers to people. True sustainability is what we at Futuretivity call 360˚ Sustainability, as recognised by the SDGs, the Sustainable Development Goals set by the UNGC to enable responsible business to achieve transformational change in environmental and social sustainability. SDGs enable prioritising those furthest behind through direct commitments to ending poverty, gender discrimination, health, and economic disadvantage. Companies wanting to avoid greenwashing and become legitimately sustainable need to adopt ethical labour practices, fair pay, working conditions, a sustainable supply chain, and a culture that promotes happiness and wellbeing for employees and beyond.
8. Take Climate Action: Climate action is the urgent action needed to combat climate change and its impacts. Climate action demonstrates authenticity and as opposed to greenwashing shows that a company is taking legitimate steps, putting sustainability into action. Climate action focuses on the mitigation of climate change through reduced greenhouse gas emissions, adaptation and resilience to the effects of climate change (extreme weather), and the contribution to the understanding of climate change and its effects. Climate action is Goal 13 of the 17 SDGs (Sustainable Development Goals). Goal 13 states that climate change is a real and undeniable threat to our civilization, with effects already visible, and that will be catastrophic unless urgent action is taken, hence the goal’s mission to take urgent action to combat climate change and its impacts. Companies can support environmental activism at a grassroots level, partner with impact organisations and local communities, design, manufacture products and services for 360˚ Sustainability, for example using new materials to eliminate fossil fuels completely.
9. Sustainability Reporting & Accountability: Companies can demonstrate their authentic commitment to sustainability by signing up to initiatives such as the UN Global Compact (UNGC )is the world’s largest corporate sustainability initiative. The UNGC is a non-binding pact to encourage businesses worldwide to adopt environmentally and socially sustainable policies and to report on their implementation. The UNGC operates ten principles around human rights, labour, the environment, and anti-corruption. The principles are delivered through 17 Sustainable Development Goals (SDGs), initiatives that businesses can implement to create an enabling environment, address social inequality and build vibrant markets. Companies can also sign up to the SBTi. The SBTi is an ambitious climate initiative driving the private sector to adopt scientific targets to reduce their emissions and help achieve net zero. The Science Based Targets Initiative (SBTi) is a partnership CDP, UNGC, World Resources Institute, and WWF providing companies with clearly defined paths to reducing emissions aligned with the Paris Agreement goals. Over 2000 businesses are working with the initiative by setting science-based targets in a statement, then working on emissions reduction in line with SBTi criteria, which is subsequently reported to SBTi and disclosed publicly.
10. Sustainability Strategy and Roadmap: Have a credible sustainability strategy and roadmap in place that is at the core of your business strategy. A sustainability strategy is a prioritised list of actions providing a framework for an organisation’s approach and commitments to its supply chain, operations, stakeholders, and culture that minimises negative environmental and social impact and increases the long-term benefit for the environment, society, and business value. A well-constructed sustainability strategy will support long-term leadership, value creation and resilience through a clearly defined vision and deliverables with a cohesive approach to people, planet and profits.
Futuretivity delivers climate positivity with vibrant, socially impactful commercial power. We recognise that the how-to of sustainability can be overwhelming, so we empower businesses with actionable roadmaps, skills for the future and meaningful connections to succeed. Being a conscious business needn’t cost the earth nor cost your business.
For more inspiration and insights on sustainability for business go to futuretivity.com/resources If you are a company that needs help with sustainability in your business book a call with Futuretivity now and get sustainability delivered.