As consumers become more aware of environmental issues, companies are focusing their attention on their green supply chain and social responsibility. Businesses large and small are finding that having a greener supply chain can not only benefit their bottom line, but can be used in the marketing of their products to the public. However there are many companies that are overemphasizing minor green changes in their supply chain for maximum publicity. The environmental organization Greenpeace has attempted to bring these exaggerated claims to the public’s notice and the media has named the unscrupulous practice, greenwashing.
Multi-national companies such as Unilever and Canon have been attempting to make their supply chain more environmentally sound, by using renewable materials, less packaging and recycling. In turn they also encourage their vendors to incorporate environmentally sound processes. These companies rightfully highlight their progress in environmental processes by informing the public in marketing and advertising. However, the public is bombarded by a variety of claims from companies that range from vague to misleading as well as the honest claims from the leading environmentally companies. The average consumer is unlikely to be able to distinguish between unfounded and honest claims. Marketing and lobbying has been a crucial component for US companies who want to improve their public image. The greenwash marketing phenomena was identified by Greenpeace in the 1990’s when companies who were responsible for chronic water pollution were marketing themselves as eco-friendly in Washington DC. Since then greenwashing has become sophisticated and more commonplace so that the public has less chance of distinguishing between invalid and valid claims.
Greenpeace has been monitoring the environmental claims of companies whether those claims are in the supply chain or their social responsibility. Greenpeace gives consumers and lawmakers the information to identify company’s false or overstated claims with regards to the environment.
In the US, the efforts of organizations like Greenpeace have encouraged consumers to question environment claims such that in an Adecco USA Workplace Insight survey published in April 2008, 68 percent of consumers believed that companies greenwashed their claims.
Companies that exaggerate their claims can be reported to the Federal Trade Commission (FTC) who can take legal action against those companies. But according to Greenpeace the FTC has not taken action against any company for greenwashing since 2000. The FTC is rewriting its regulations on green marketing and this may lead to less outrageous claims in the future.
Greenpeace identifies a number of areas that companies are greenwashing; Exaggerated Claims, Political and Zero Impact. With exaggerated claims, companies tend to publicize their minor environmental successes while their core business remains unchanged and not environmentally friendly. Political greenwash occurs when a company is marketing their environmental policies while lobbying against tougher environmental laws. Zero impact greenwash is used by companies that heavily publicize certain environmental policies that they adhere to, but in fact the policies are already required by state or federal law. The company will most often have little or no other green policies.
The environmental marking company, TerraChoice, publishes an annual report highlighting the greenwashing that firms use to exaggerate their "green" claims. In 2010, TerraChoice found that 95 percent of consumer products claiming to be green are committing some form of greenwashing. Their study identifies the seven sins of greenwashing which include the sins of no proof, vagueness, false labeling, irrelevance, lying, the lesser of two evils, and the hidden trade off.
Many companies are guilty of one or more of the sins identified by TerraChoice. Often companies offer no proof when they make claims about the amount of recycled materials in their product or packaging. If they use a third party certification company to back up their claims then consumers could rely on the statement, but without that consumers have to be skeptical about any unproven claims.
Advertising can also be vague when describing so-called environmentally friendly products. Confusing the consumer is easily achieved with vague claims which can be compounded with irrelevant descriptions and misleading package labeling which may imply that a certain certification was given when it was not. The study found that some products were labeled inaccurately so that the green claims were plainly false. Products can be labeled as containing 100% recycled material when in fact the percentage would be much lower. In those cases the consumer has no way of knowing what the truth actually is.
Businesses are keen to show consumers that they are environmentally responsible, using green products and manufacturing processes. However companies should not exaggerate their claims otherwise they could lose consumer confidence and run foul of the FTC.
