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The Ongoing Evolution of Greenwashing | February 2023

Published Date
Author Linda Ferrell

For decades, environmentalists have been concerned that some companies are engaged in greenwashing or deceptively creating a positive association with environmental issues for an unsuitable product, service, or practice. 

The history of greenwashing 

Environmental activist Jay Westerveld first accused companies of greenwashing in 1986 when hotels requested customers to reuse towels rather than providing fresh ones daily under the guise of water conservation. He felt the measure was simply a money-saving tactic in disguise since the hotel in question did not have a broader environmental strategy. 

Why is greenwashing harmful? 

Greenwashing by its very nature is misleading to consumers. Green product claims can be vague, confusing, and deceitful. There is no legal definition for the phrase greenwashing, though some people support legal efforts that would require companies to back up environmental claims with scientific evidence. 

Signs of greenwashing 

As greenwashing has grown, so too has skepticism of “green” marketing. Customers may not be able to easily determine is green claims are authentic or not. To help consumers distinguish between greenwashing and authentic green business practices, European Union regulators analyzed common marketing terms. 

For example, if a product label says “climate neutral,” “carbon neutral,” or “CO2 compensated,” it could indicate a company is purchasing carbon offsets rather than reducing its own emissions. Through offsets, companies can pay to remove carbon from the atmosphere to make up for their own carbon emissions. This lack of transparency can be confusing to consumers. 

Companies may also use meaningless statements such as “greenest” without sharing data or sources. Without backing up these superlative statements, they are essentially meaningless and untrustworthy. Similarly, companies may set forth environmental goals and objectives without context. If an organization says it will reduce emissions by 50 percent without specifying a time period, consumers may be misled about the company’s commitment. 

According to the EU, some terms like “biodegradable” and “compostable” are not used correctly. To make matters worse, a U.K. study found that more than half of products labeled as compostable do not actually decompose as expected in domestic composts. 

Addressing greenwashing 

To address greenwashing, EU regulators are spreading awareness to consumers and are encouraging companies to be more specific with their claims. The European Union is expected to introduce anti-greenwashing regulatory measures to tackle misleading climate claims. 

In the Classroom 

This article can be used to discuss greenwashing (Chapter 2: Business Ethics and Social Responsibility). 

Discussion Questions 

  1. What is greenwashing? Provide several examples either hypothetical or real. 

  1. Why is greenwashing harmful to consumers?  

  1. How can consumers spot greenwashing? 

This article was developed with the support of Kelsey Reddick for and under the direction of O.C. Ferrell, Linda Ferrell, and Geoff Hirt. 

Sources 

John Ainger and Alberto Nardelli, "EU to Fight Rogue Climate Claims in Greenwashing Push," Bloomberg, January 12, 2023, https://www.bloomberg.com/news/articles/2023-01-12/eu-to-fight-rogue-climate-claims-in-greenwashing-push 

Olivia Rudgard, "How Eco-Friendly Is That Product? Here Are Four Ways to Spot Greenwashing," Bloomberg, January 18, 2023, https://www.bloomberg.com/news/articles/2023-01-18/four-examples-of-greenwashing-according-to-the-eu  

Sebastião Vieira de Freitas Netto, Marcos Felipe Falcão Sobral, Ana Regina Bezerra Ribeiro & Gleibson Robert da Luz Soares (2020). Concepts and forms of greenwashing: A systematic review. Environmental Sciences Europe, 32(19). https://doi.org/10.1186/s12302-020-0300-3  

About the Author

Linda Ferrell is the Roth Family Professor of Marketing and Business Ethics in the Raymond J. Harbert College of Business, Auburn University. She was formerly Distinguished Professor of Leadership and Business Ethics at Belmont University. She completed her Ph.D. in business administration, with a concentration in management, at the University of Memphis. She has taught at the University of Tampa, Colorado State University, University of Northern Colorado, University of Memphis, University of Wyoming, and the University of New Mexico. She has also team-taught classes at Thammasat University in Bangkok, Thailand.

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