Are greenwashing guilty companies evil or subject to a system that prioritises market competitiveness?

Public awareness of climate change and environmental issues has increased over the years and has naturally resulted in growth in demand for more sustainable goods and services. Companies and brands have increasingly cashed in on this demand through claims of degradable packaging, sustainable product lines or use of recycled materials. However, there have been multiple instances of corporations overstating, manipulating and misleading consumers into believing they are doing more to reduce their environmental impact than they are. This is greenwashing.

Evidence of greenwashing can be found across almost all products and services. I’ve highlighted some examples below;

• McDonald’s transition from plastic to paper straws in the name of reducing plastic waste. The paper straws were non-recyclable, contributing to deforestation and still producing non-recyclable waste.

• A Changing Markets Foundation report found that 75% of clothes donated into H&M’s clothes recycling scheme were either destroyed, left in warehouses or shipped to Africa and later shredded or dumped.

• UK Advertising Standards Agency banned a Ryanair ad, in which the company claimed to be “Europe’s lowest emission airline”. This was due to failure to substantiate these environmental claims.

• Whilst marketing the low-emissions features in their vehicles, car giant Volkswagen confessed to installing software that allowed its vehicles to cheat emissions testing, producing up to 40 times the allowed limit.

The list goes on (quite literally - Greenwashing: 14 recent stand-out examples, 10 Companies Called Out For Greenwashing).

Greenwashing is damaging because it allows companies to appear to be acting on climate and environmental issues, without making meaningful change. It also undermines the work of businesses who are genuinely reducing their impact and contributes to public perception that progress is being made in tackling climate and sustainability issues, consequently delaying the radical action needed. There is no denying that greenwashing is unacceptable in the effort to combat climate change. But in the name of increasing integrity and reducing greenwashing in climate action, I believe we need to examine the context in which businesses are operating in order to understand why greenwashing takes place.

It is often easy to personify corporations. Indeed, in most western societies corporations are given ‘personhood’ and entitled to the right to own property, to sue and be sued, and tax liability. Similarly, we often associate these companies with their (sometimes dubious) founders, such as Bezos with Amazon and Musk with Tesla. Consequently, it can feel instinctive to villainize companies as evil forces acting against the greater good of the world. Even ‘greenwashing’, an environmental adaptation of the noun ‘brainwashing’, a word associated with propaganda, political regimes, cults, and science fiction villains, is suggestive in its application to corporations guilty of disingenuous green commitments.

But in reality, are companies failing to act with integrity on climate change because they are inherently evil and vindictive, or because they are acting in market interests? We, as consumers, have increasingly demanded more climate and environmentally friendly products and services. However, we rarely want to pay a significant price premium or see a disruption in accessibility. As such, to maintain market competitiveness corporations have supplied eco-friendly products at the most efficient and cost-effective level, which sometimes involves some manipulative marketing tactics or even a cheeky lie or two. Use of words such as ‘sustainable’ or ‘green’ in marketing are almost entirely unregulated, making greenwashing fair game for firms. Is it surprising that corporations will cut corners and use misleading taglines to satisfy a consumer demand?

Decisions regarding products and marketing are often made by multiple people across several levels of hierarchy with a myriad of social, political and cultural beliefs. Often pathways are decided based on the cheapest, quickest, or most impactful choice, which sometimes just so happens to also be climate or environmentally friendly (great, slap a sticker on it). But more often the most climate or environmentally friendly option is not the cheapest, quickest or most impactful, if it’s even on the flipchart at all.

Sustainability and climate requirements fall among a mounting pile of competing priorities, such as profitability, market competitiveness and supply costs, which often take precedence in the interest of meeting performance targets. The incentive to prioritise genuine green transition is limited. To quote a report from Cambridge Institute on Sustainability Leadership “No business can be sustainable in an unsustainable market”.

In addition, the most significant climate and environmental issues these companies face are far more challenging to resolve, let alone package and sell to consumers. Issues such as overuse of water resources, high emissions in manufacturing and disposal of hazardous waste require a resource commitment that cannot easily be passed on to consumers.

For example, promoting a product by marketing GHG emissions reduced in comparison to competitors, is challenging firstly because this is hard to accurately quantify and will be subject to scrutiny by advertising standards and climate groups. And secondly, because this message is not necessarily something that can be easily understood by the consumer. These improvements are far more difficult to market to the public and offset the associated costs. This means we rely on the moral imperative of businesses to make out of pocket investments in the decarbonisation and waste reduction of their business.

Consequently, we can be angry with firms for greenwashing, but can we really be surprised? Does the source of the issue lie with these corporations or with a system that prioritises high performance over sustainability? I believe we won’t see authentic commitments from these organisations, until structural changes are in place that favour climate friendly production and supply, as well as greater regulation of eco-friendly marketing buzzwords to prevent disingenuous claims. Sustainability must become a source of competitive advantage to drive change and as it stands, the market does not support the costs of a true green transition. It is essential that governments see the long-term business case for implementing such policies, as I fear we will not see commitment to reducing climate and environmental impacts from business alone whilst the market continues to favour low-cost, over low-carbon.