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This article was first published here.
If consumers want the brands they buy from to keep their supply chains sustainable and environmentally friendly, they will have to wise up to greenwashing. Greenwashing, sometimes called ‘green sheen,’ is a form of insincere advertising in which companies use false eco-friendly claims to market their products.
Today’s consumers are very aware of the impact their purchasing choices have on the natural world, and they have been for some time. As far back as 2016, three in four Americans believed the country should ‘do whatever it takes to protect the environment’, per data from Pew Research. According to research from Gallup, the percentage of Americans who believe environmental protection should be prioritized ahead of economic growth has not dipped below 50% in the last seven years.
That has political consequences, of course, especially given the unhelpful framing of that survey question. It implies you can’t have both growth and environmental protection, when many Americans remain unaware of the plentiful opportunities for free-market environmentalism, marrying economic growth with green interests.
Americans are demanding that companies make their products in a way that does not harm the planet. That’s a good thing because it organically pushes the market towards more sustainable practices. Unfortunately, though, there will always be some who are more interested in cutting corners than doing the right thing, even if it might mean deceiving their customers in the process. Some brands virtue-signal loudly about their green credentials, but upon closer inspection, their claims do not always stack up. Enter greenwashing.
Greenwashing is a key issue in countless markets across the world. It misleads consumers and causes low levels of confidence in businesses’ environmental credentials. The packaging and marketing of consumer items, such as food and cosmetics, is often awash with dubious environmental claims. Even simple allegations of greenwashing are plentiful and can be immensely damaging to a brand.
Last year, Kohl’s and Walmart had to pay a combined $5.5 million penalty after they marketed a range of products as eco-friendly on the basis that they were made of bamboo. The Federal Trade Commission found they “were actually made of rayon and did not contain bamboo fibers”, making them much less green than claimed. Meanwhile, it turns out Hefty Recycling Bags are non-recyclable, with a class action lawsuit now alleging their misleading marketing ‘violated Florida law by materially misrepresenting that the…bags are suitable for recycling.’
Brands virtue-signaling on their green credentials also risks over-simplifying complex environmental issues. For instance, various producers of disposable coffee pods are routinely accused of greenwashing based on the recyclability (or otherwise) of the pods themselves. But some research suggests using pods could reduce coffee drinkers’ environmental impact overall because they waste less electricity, water and coffee.
Similarly, ‘palm oil free’ is becoming a go-to boast for companies who want to claim their products do not contribute to deforestation. This trend is linked to a spike in negative public opinion around palm oil – according to research, 41% of the public think palm oil is ‘environmentally unfriendly’, a much higher number than for other vegetable oils like soybean, rapeseed, sunflower and olive, because of its perceived fuelling of deforestation. But despite the ad slogans, that concern is not borne out by the facts.
For countless items from chocolate to shampoo, using one vegetable oil or another is unavoidable to make the product. That leads to concerns that those supply chains rely on deforestation – rich forest land needs to be cleared to make way for the plants to supply that oil. Palm oil is the most land-efficient vegetable oil, so using it means a manufacturer is minimizing deforestation in their supply chains, even discounting the ongoing innovation which is reducing palm oil production’s impact on the natural world further. So ‘palm oil free’ likely means more, not less, deforestation.
Greenwashing is superficial. It does not engage with the nuance and practicalities of what it takes to actually make a difference to the planet, in this case by reducing deforestation. Instead, it creates the impression of action rather than passiveness, in this case by choosing a scapegoat, boycotting it and then doing nothing further. Rarely can the multi-faceted environmental legacy of any product be neatly boiled down to an ad-friendly slogan, which means simplistic green advertising campaigns risk misrepresenting the truth, intentionally or otherwise.
It’s not all bad news. There are plenty of bright sparks embracing sustainability as an asset rather than an obstacle, especially in the startup sector. In fact, everywhere you look, there are reasons to be cheerful – the vast majority of brands seem able and willing to confront the fact that a veneer of sustainability is not enough, acknowledging that real investment in the future of the natural world is needed.
Companies are better off being upfront with consumers about the environmental credentials of their products, rather than virtue-signaling with pictures of orangutans and hoping people don’t interrogate their claims too closely. There is no substitute for transparency. In the modern age, where allegations of corporate bigwigs trying to pull the wool over customers’ eyes can spread like wildfire online and cause irreparable brand damage, providing holistic information about supply chains’ effects on the planet is a must for every major brand. These days, environmental sustainability equals a sustainable customer base and business model.
That’s not to say stricter government regulation of environmental claims is the answer. As the coffee pod example shows, it is sometimes very difficult to ascertain whether a product really is more or less environmentally damaging than another. The free market, along with a strong rule of law, is the best arbiter of greenwashing. Consumers (and journalists) can be relied upon to unearth the truth and, if necessary, take the matter to court, as with Hefty Recycling Bags.
Consumers are more perceptive than some brands may assume, and they reward manufacturers who go out of their way to make a real difference in their supply chains.
They would be better off putting the environmental virtue-signaling aside and investing now in meaningful changes, rather than waiting until it becomes urgent because consumers realize they are being short-changed and abandon brands en masse. In the long run, greenwashing does not pay off.
