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How Greenwashing Works

        Money | Money & Ethics

Why do companies greenwash and what are the results?
Customers who pay higher prices for natural and organic foods at markets like this Whole Foods in Chicago hope companies are truthful about their environmental policies.
Customers who pay higher prices for natural and organic foods at markets like this Whole Foods in Chicago hope companies are truthful about their environmental policies.
Scott Olson/Getty Images

Just as a candy manufacturer might exaggerate the tastiness of its newest product to draw in customers, an organization might willingly mislead the public by creating a falsely-green image. For the candy manufacturer, exaggerated information can be the result of overzealous, sloppy or outright dishonest advertising. The same conditions can also produce overblown environmental claims. While some companies try to spread misinformation actively, others wind up greenwashing through sloppiness.

Greenwashing takes its toll on all involved. When greenwashing goes unnoticed, consumers are duped into buying products they think are environmentally sound. They unwittingly support the ecological offenses of businesses. However, when greenwashing is exposed, the offending businesses also suffer from lowered consumer confidence.

But as people become more aware of greenwashing, advocacy groups and government regulators take a greater interest in investigating environmental claims. Regulation, be it from civilians or government bodies, leads to greater responsibility in environmental marketing.

In the next section, we'll take a look at what advocacy groups and lawmakers are doing about greenwashing.


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