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  Greenwashing: Only the Appearance of Sustainability 

Alejos Góngora, Claudia Lucía


Environmental awareness is on the rise. In the United States, for instance, one study found that the number of consumers opting for environmentally friendly products is climbing 30 percent per year -- a trend triggering a tidal wave of new green labels. At a global level, the percentage of consumers turning to eco-friendly products grew by 10 percentage points from 2011 to 2014. Within corporations, the number of enterprises establishing environmentally responsible policies speaks to increasing awareness as well.

A report on "greenwashing," written by Claudia Lucía Alejos and published by the "La Caixa" Chair of Corporate Social Responsibility and Corporate Governance, concludes that this surge of interest also has brought with it questionable behaviors, such as companies portraying themselves or their products as eco-friendly when in fact they are not. The title of the study comes from a play on "whitewashing" in the symbolic color of the environmental movement.

Companies may greenwash their offerings because of growing pressure from society, interest groups and myriad environmental regulations. If governments and other regulatory bodies fail to revise their incentives, the risk of being misled by false claims will continue to run high.

The Possible Faces of Deception
Advertising, labeling and public relations are the three most common conduits for companies to let people know what they are doing for the environment and to try to gain a competitive edge while influencing consumers' shopping decisions.

In fact, advertising is where one of the most common forms of greenwashing appears: selective misinformation. This practice highlights "green" features of a product while hiding other aspects that may be negative. Consumers may thus be misled, using a product they think helps protect the environment while unaware of the damaging aspects of it.

As for labeling, surging demand for "green" certifications has saturated the market with hundreds of labels that end up confusing consumers and making them wary. Underhanded practices include the use of images and colors related to nature, labels and symbols that look official yet are not, and self-declaratory labels made up by the company.

In public relations, greenwashing can turn up in a variety of ways:

  • Business lobbies. Special-interest lobbies may seem to embrace environmental messages while simultaneously joining lobbies that block ecological initiatives.
  • Deep greenwashing. Attempts may be made to manipulate public opinion so as to change social value -- e.g., spreading the message that technology alone is enough to curb global warming.
  • Front groups. Groups of scientists or citizens who are apparently independent may actually be financed in return for their endorsements.
  • Occasional side projects for good. A company may work with NGOs and/or universities on occasional projects for good while the rest of its activities continue to disregard the environment.
Rules to Prevent Greenwashing
The European Commission has issued directives to limit "unfair commercial practices" as well as "misleading and comparative advertising" in order to curb such practices as the overstatement of environmental achievements or failure to comply with codes of conduct.

In the realm of labeling, the European Commission has created the European Eco-label (aka, the Flower) to serve as a reliable symbol of environmental care. Displaying the Flower requires products to pass rigorous compliance tests with independent verifications. Meanwhile, there is no specific regulation governing other labels that may be misleading.

Within Spain, there is 1988's general law on advertising, 2009's law on unfair commercial practices, and a code on environmental statements in commercial communications -- although the code is self-regulatory and not legally binding.

The regulations do not reach all areas, however. Many kinds of conduct fall in the field of ethics or reach beyond the law, with companies asked to voluntarily assume responsibility for their claims.

How to Boost Sustainability

Alejos' report proposes regulating all advertising with environmental content and encourages a model of advertising oversight similar to Norway's.

Environmental communications and advertising should be sincere, humble and moderate, according to the report. And it may be useful to highlight ecological side benefits -- such as health benefits and cost savings -- that come along with greener living.

On labels, the use of a green symbol should always include an explanation of how the product contributes to protecting the environment and what exactly a certification refers to. Third-party certifications should be used, rather than self-declaratory ones. If an agreement with environmental associations is noted, the size of the contribution should be made known.

In addition, those with authority over certifications should not only grant labels for compliance but also impose fines when they are not observed. There should also be warnings attached to the products that are most harmful for the environment.

Companies and their executives should commit to environmental causes. Corporate policies to this end should be specific, sincere and viable. They should also be subject to external audits to avoid disconnect between what a company says and what it does.

Arguments to Avoid Deceit
Acting with the environment in mind should generate short- and long-term benefits by cutting costs, increasing market share, boosting competitiveness and/or improving ties with interest groups and the company's public image.

And what happens if a company is guilty of greenwashing? In this case, keep in mind that people tend to forgive those who take responsibility for their actions so long as they also implement measures to correct their behavior and repair the damage caused.
This article is based on:  Greenwashing: ser verde o parecerlo
Publisher:  IESE
Year:  2013
Language:  Spanish
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