The European Union (EU) plans to tackle greenwashing by 2026. On September 19, 2023, it created a new rule. This rule bans ads that falsely claim sustainability. Before it can be implemented in 2026, it must get the final nod from the European Parliament and the Council. Each member state has two years to make this rule part of their laws.
The new rule is very specific about environmental claims. It requires proof based on recognised performance. This means businesses can’t make broad claims like “environmentally friendly” or “climate neutral” without evidence.
Understanding Greenwashing
- Greenwashing is a marketing strategy used by organisations to create an environmentally friendly image.
- These organisations often spend more resources on green marketing than on actually reducing their environmental impacts.
- The purpose of greenwashing is to deceive consumers who prefer to purchase from eco-conscious brands.
- Greenwashing can also involve a company highlighting the eco-friendly elements of a product while downplaying their involvement in harmful environmental practices.
- Tactics used in greenwashing include employing environmental imagery, using misleading labels, and hiding harmful trade-offs.
- The term greenwashing is derived from “whitewashing,” a practice of hiding unpleasant information to make a situation appear less severe than it is.
The Origin And Instances Of Greenwashing
- The term “greenwashing” was first used by environmentalist Jay Westerveld in 1986.
- He used it in an essay to criticise the “save the towel” movement in hotels, which mainly saved hotels money.
- This term came into existence when people relied on traditional media like television, radio, and print media for news.
- Greenwashing has seen large-scale use by several companies, leading to public attention.
- In the mid-’80s, Chevron, the oil company, launched an extensive ad campaign showcasing its environmental commitment.
- At the same time, Chevron was violating the Clean Air Act and Clean Water Act, and causing oil spills in wildlife refuges.
- Chevron wasn’t the only company making such false claims.
- In 1991, DuPont, a chemical company, advertised its double-hulled oil tankers with ads showing marine animals dancing to Beethoven’s “Ode to Joy”.
- It was later revealed that DuPont was the biggest corporate polluter in the U.S. that year.
- Some major carbon emitters, like traditional energy companies, have tried to rebrand as eco-friendly.
- This rebranding can involve renaming, repackaging, or presenting products as more natural, wholesome, or chemical-free.
- Companies may greenwash through press releases or ads highlighting their clean energy efforts or pollution reduction.
- However, these efforts might not reflect a genuine commitment to environmental initiatives.
- In essence, greenwashing involves companies making unsupported claims that their products are environmentally safe or provide an eco-friendly benefit.
Types Of Greenwashing
Greenwashing can take various forms, and it’s not always easy to spot. Here are some common types to watch out for:
- Misleading Labels: Companies may use words like “natural” or “green” on their labels, but these terms have no standard definition and can be misleading.
- Vague Claims: Using phrases like “environmentally friendly” or “eco-friendly” without any specific evidence to back them up is a common tactic of greenwashing.
- Hidden Trade-Offs: Some companies may focus on one aspect of their product’s environmental impact while neglecting others. For example, promoting a product as recyclable but ignoring the use of unsustainable materials in its production.
- Irrelevant Claims: Sometimes, companies may make irrelevant claims about their product’s environmental benefits. For example, promoting a product as “CFC-free” when CFCs are no longer used in that particular industry.
- False Certifications: Companies may create or use fake certifications to give the impression that their products are environmentally friendly.
- Lack of Transparency: When companies refuse to disclose information about their environmental impact or sustainability practices, it could be a sign of greenwashing.
The Damage Of Greenwashing And Recent EU Regulation
- Greenwashing is the deceptive practice by companies to appear more environmentally friendly than they are.
- Consumers and investors who want sustainable products or companies are misled by greenwashing.
- Products seen as ‘green’ often cost more, resulting in overpayment by consumers.
- A company’s reputation and brand can take a serious hit if greenwashing comes to light.
- The EU parliament’s decision to ban false claims of environmental impact, such as labelling products as neutral, reduced, or positive based on emissions offsetting.
- This action is crucial in fighting deceptive green claims and promoting transparency.
- The regulation has been well received by non-profit organisations, Carbon Market Watch (CMW) in particular.
- CMW and similar groups have been ardently advocating for the EU to implement such a ban.