How Greenwashing Works


­A Brazilian environmental group protests alleged greenwashing with a Pinocchio Lie-O-Meter.
­A Brazilian environmental group protests alleged greenwashing with a Pinocchio Lie-O-Meter.
H. John Maier Jr./Time Life Pictures/Getty Images

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­In a society that's increasingly aware of its own negative impact on the natural world, it's no surprise corporations compete for consumer approval by promoting themselves as environmentally friendly or green. Such promotions might be as simple as sprinkling product packaging with leafy logos or as involved as publicizing investments in emerging technologies. Organizations spend billions of dollars each year in an attempt to convince consumers that their operations have a minimal impact on the environment. But can you believe the claims? How much environmental marketing is simply greenwashing?

­The term greenwashing is an environmental take on whitewashing -- the attempt to cover up or excuse wrongdoing through false statements or the biased presentation of data. While the term greenwashing first emerged around 1990, the practice itself dates back to the mid-1960s, when corporations were already making an effort to improve their public image in light of the emerging modern environmental movement.

Now more than ever, it's in a company's best interest to put on an environmentally-friendly face. According to a recent study by the AARP, there are 40 million "green boomers" in the United States today. These environmentally conscious consumers make up more than half of the country's 79 million baby boomers (people born between 1946 and 1964). Combined with the younger generation of green-minded consumers out there, this makes for a very attractive consumer group.

But as with all forms of advertising and public imaging, questions inevitably arise regarding the validity of companies' environmental claims. Are a major oil company's concerns over pollution as genuine as its print ads make it seem?

In this article, we'll take a look at the six sins of greenwashing, learn why greenwashing happens and find out what advocates and lawmakers are doing about it.

Forms of Greenwashing

Boeing UK was accused of committing the third sin of greenwashing: making vague claims about environmental advances.
Boeing UK was accused of committing the third sin of greenwashing: making vague claims about environmental advances.
Scott Barbour/Getty Images

Corporations, businesses and even governments spend a lot of money to make themselves appear greener in the public eye. While many environmental claims are legitimate, it's considered greenwashing when the claims are false or presented in a deceptive manner. TerraChoice Vice president Scot Case identified six ways companies greenwash their customers and investors in his report, "The Six Sins of Greenwashing."

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  1. Hidden tra­deoffs The most common form of greenwashing accounts for 57 percent of cases. It occurs when a company makes a positive environmental claim about a product, but fails to mention larger negative factors. The bad outweighs the promoted good, leaving the consumer with an unbalanced view of the environmental impact. Example: Many companies make claims about recycled paper content but don't account for paper production's negative effects like air and water pollution.
  2. Lack of proofAccounting for about 26 percent of cases, this type of greenwashing happens when a company makes environmental claims that can't be easily verified with data or through a third party. Example: Critics have lashed out at companies such as SC Johnson for self-verifying environmental claims. The company gives products like Windex "Greenlist" certification -- a distinction handed out by SC Johnson itself rather than an independent third party [source: Treehugger]. ­­Environmentally-charged consu­mers are also pouring more money than ever into carbon offsets -- $54 million in 2007 [source: Adweek]. However, academics and members of the United States Federal Trade Commission question the effectiveness of some carbon offset programs and call for stricter regulations.
  3. Vague claims This type of greenwashing accounts for 11 percent of examined cases and occurs when companies make environmental claims that are too vague or broad to be understood by consumers. Example: Boeing UK was bombarded with complaints in 2007 for a print advertisement claiming its 747-8 International passenger plane produced "less than 75 grams CO2 per passenger kilometer." Britain's Advertising Standards Authority faulted Boeing UK for basing its figures on 100 percent occupancy when the British government uses a standard 79.9 percent occupancy in calculating airliners' CO2­ emissions [source: Guardian].
  4. Irrelevant claims Coming in at a narrower four percent of examined cases, this type of greenwashing occurs when companies make claims that might sound good on the surface but are ultimately pointless. Example: Advertisements will sometimes claim that a product is free of chlorofluorocarbons (CFCs), an ozone-depleting chemical compound once found in refrigerants and propellants. Because CFCs have been banned for years, this once noteworthy claim no longer has relevancy.
  5. The lesser of two evils Accounting for an estimated one percent of cases, this type of greenwashing involves claims that are not only irrelevant but have questionable ecological significance to begin with. Example: Organic cigarettes and environmentally friendly pesticides are often marketed as being better for the environment than traditional products. However, critics charge that consumers are usually better off reducing the use of the advertised product than purchasing a green version.­
  6. Outright lies This category, accounting for less than one percent of reported cases, involves companies that make false claims about a product or falsely cite green certifications. ­ ­Example: Several major Japanese paper companies, including the nation's largest paper manufacturer, Oji Paper Company, admitted to falsifying the amount of recycled paper used in their products. Oji claimed it used 40 percent recycled content in heavy paper but used no recycled content at all [source: Yomiuri Shimbun].

Now that we know how companies greenwash, we'll find out why they do it and what greenwashing costs consumers, businesses and the environment.

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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.

Regulating Greenwashing

The United States Federal Trade Commission is updating its green marketing guidelines.
The United States Federal Trade Commission is updating its green marketing guidelines.
Paul J. Richards/AFP/Getty Images

While various government and civilian groups monitor truth in advertising, the regulation of environmental claims is still an evolving area. In the United States, the Federal Trade Commission recently began hearings to update its 1998 green marketing guidelines, announcing that there was a "heightened potential for deception" in the market [source: NY Times].

In other parts of the world, governmental bodies such as the United Kingdom's Advertising Standards Authority weigh in on greenwashing issues while European law requires that advertisers list their CO2­ emissions in advertisements. As for the companies themselves, many push for continued self-regulation or encourage the involvement of self-regulation organizations such as the European Advertising Standards Alliance and the National Advertising Division of Council of Better Business Bureaus in the United States.

When governmental regulation falls short or self-regulation is questionable, advocacy and watchdog groups step in. The majority of greenwashing charges are leveled by environmental groups like Greenpeace, Friends of Europe and Co-op America, along with other groups like CorpWatch and GreenBiz that focus directly on greenwashing or corporate environmental involvement. The Web site Greenwashingindex.com even allows users to post examples of suspected greenwashing. Participants vote and rate the deceptiveness of advertising.

From the consumers who monitor it to the big businesses that practice it, greenwashing exemplifies society's increasing attention to its own impact on the environment. Even when corporate promotions of new green technologies and global environmental efforts are self-serving or deceptive, the message still reaches the masses that mankind's impact on the natural world must be taken seriously.

­For more information on greenwashing, watchdog groups and environmental issues, please look over the links on the next page.

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Sources:

  • "The Accelerated Phaseout of Class I Ozone-Depleting Substances" The Environmental Protection Agency. Oct. 4, 2007. http://www.epa.gov/Ozone/title6/phaseout/accfact.html
  • Alter, Lloyd. "Greenwash Watch: SC Johnson's Greenlist." Treehugger. Jan 18. 2008. http://www.treehugger.com/files/2008/01/greenwash_watch_16.php
  • Case, Scott. "The Six Sins of Greenwashing." TerraChoice Environmental Marketing. November 2007.http://www.terrachoice.com/files/6_sins.pdf
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  • Story, Louise. "F.T.C. Asks if Carbon-Offset Money Is Well Spent." The New York Times. Jan. 9, 2008. http://www.nytimes.com/2008/01/09/business/09offsets.html?ex=1357534800&en=c99a2478e261e8eb&ei=5090&partner=rssuserland&emc=rss
  • Sweney, Mark. "Boeing ad grounded over green claims." The Guardian. Nov. 28, 2007. http://www.guardian.co.uk/media/2007/nov/28/asa.advertising
  • "USDA Organic Food Standards and Labels." USDA Agricultural Marketing Service. January 2007.http://www.ams.usda.gov/nop/Consumers/brochure.html