May 27, 2024 • Reading time: 12 Min
Increasing environmental awareness among consumers means that environmental and social aspects are becoming ever more important in purchasing decisions. Sustainability has developed into a convincing sales argument. Companies emphasize their social commitment or advertise products as particularly environmentally friendly. Greenwashing is a term that is becoming increasingly important in the business world and is often used in connection with environmental compatibility. Companies like to present themselves as sustainable and environmentally conscious, but how can you tell the difference between real sustainability and fake sustainability? According to a study by TerraChoice, 95% of environmental product claims use misleading or inaccurate information. Greenpeace's 2023 report also shows that 63% of products advertised as 'green' do not actually meet sustainability standards. In our blog post, we explore the question of what greenwashing means, how companies can recognize it and what measures they should take. All you need to know about recognizing greenwashing in companies, you can find in our article.
Greenwashing describes the practice of companies creating the impression of being environmentally friendly without actually taking substantial measures to protect the environment. Targeted marketing and PR measures are intended to convey the image of a sustainable company. However, it is often difficult to distinguish between genuine environmental commitment and greenwashing. To combat this misleading practice, the EU has introduced an anti-greenwashing directive that obliges companies to make their environmental claims clear and verifiable. In future, sustainability labels may only be used if they originate from recognised certification systems.
Companies use greenwashing for various reasons: They want to improve their image and reputation, gain consumer trust or gain a competitive advantage. Sometimes greenwashing is also used to circumvent regulatory requirements or to positively influence investors and stakeholders. In addition to greenwashing, there is also the phenomenon of bluewashing, in which companies seek to cover up ethical and moral weaknesses through environmental and social responsibility marketing.
Consumers can look for evidence of greenwashing by critically analysing advertising materials, checking environmental and sustainability reports, conducting independent research and comparing the company with industry standards. Transparency and openness on the part of the company as well as consideration of industry trends and innovations are further factors that can help to distinguish genuine sustainability practices from sham sustainability.
Companies should take various measures to avoid greenwashing. These include authentic and transparent sustainability communication, regular reporting on environmental targets, responsible sourcing and production, rigorous verification of environmental claims and independent certification. Consistent statements, stakeholder engagement, innovation, education and awareness, setting long-term goals and responsible sourcing practices are key to avoiding greenwashing and gaining trust.
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Green is a color that is often used in the context of environmental issues. The term "greenwashing" therefore describes the phenomenon in which companies use targeted marketing and various PR measures to give the impression of acting in an environmentally friendly manner without actually being particularly committed to the environment. In a figurative sense, greenwashing refers to the concealment of a lack of commitment to ecology and sustainability.
Behind this strategy lies a clever marketing approach designed to present companies to the public as environmentally friendly and sustainable. The term critical is used to describe this PR method. Disinformation is deliberately spread to create the impression that the company is taking responsibility for nature and the environment. Marginal aspects that are actually environmentally friendly are often emphasized, while practices that are harmful to the environment are concealed.
However, it is not always immediately clear whether this is authentic environmental commitment, fake sustainability or greenwashing. It is not always easy to distinguish between greenwashing and genuine environmental commitment. Increases in efficiency are fundamentally positive. However, it is questionable if they are used specifically to circumvent stricter regulations or to increase sales. In order to create more transparency, environmental claims in advertising are to be regulated by law throughout the EU in future.
Examples of greenwashing can now be found in almost all sectors, be it the energy industry, fashion companies or the food sector. Even banks and the tourism industry are now trying to find sustainable investment opportunities and offers. It is particularly noticeable that companies with environmentally harmful core businesses are often increasingly trying to present themselves or their services as "green". The distinction between authentic green marketing and greenwashing is often blurred. It has to be decided on a case-by-case basis whether it is a case of sham sustainability or not.
The term first became known in the 1970s, but has only gained popularity in the last few years. It arose from the increasing environmental awareness of consumers, who are attaching more and more importance to environmental aspects. With the increasing scarcity of resources and more regular environmental disasters, not only has awareness of environmental issues increased, but also the desire to protect them better. As a result, the demand for environmentally friendly products continues to rise and is becoming increasingly important to the population. Over the years, the market share of green food, ecologically responsible products and fairly produced clothing has risen sharply. Profit-oriented companies have taken advantage of this trend and made it their goal to adapt their products to the new needs of consumers: environmentally friendly, recyclable and plastic-free. Under these conditions, not only have environmentally friendly products been developed, but the phenomenon of greenwashing is also on the rise.
Greenwashing provides consumers with misleading information, giving the impression that they are buying "fair" or "green" products. There is a high risk of being misled, especially when doing a quick weekly grocery shop. Even with the best of intentions to do something good for fellow human beings and the environment, it is challenging to expose eco-fraud.
The EU Commission has therefore initiated the introduction of a Europe-wide law against sustainability fraud. The anti-greenwashing directive, "Directive on empowering consumers for the green transition"(to the directive), which was adopted on February 28, 2024 and came into force on March 26, 2024, obliges companies to make their environmental and sustainability claims clear and verifiable. EU member states must implement the directive by the end of March 2026. The directive will then apply from the end of September 2026. In future, sustainability labels may only be used if they originate from recognized certification systems. Companies must prove that their products meet these standards before they are allowed to use the corresponding labels. If they fail to do so, they may face sanctions.
These regulations aim to protect consumers from misleading marketing and create more transparency in advertising. For companies, this means a stronger commitment to honesty and transparency in their communication and practices. In the long term, these measures should lead to companies acting more sustainably and promoting authentic environmental efforts.
There are also initiatives at a global level to combat sham sustainability. The International Organization for Standardization(ISO) is continuously developing standards that hold companies accountable, including ISO 14001 for environmental management systems. In addition, organizations such as the Global Reporting Initiative(GRI) are working to promote standardized sustainability reports to encourage companies worldwide to be more transparent and accountable.
These developments and future regulations will change the business landscape by setting higher standards for environmental sustainability and better protecting consumers from misleading environmental claims.
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At a time when climate change and its effects are becoming ever more present, people's awareness of the environment and their desire for a more sustainable lifestyle continues to grow. This development is leading to an increasing demand for fairly produced goods, renewable energies and environmentally friendly manufacturing processes as well as green technologies. Companies recognize an opportunity to advertise these aspects in a targeted manner, even if this is sometimes done with misleading information.
The practice of green marketing, where companies deliberately present an environmentally friendly image without taking appropriate measures, is widespread and indispensable in today's business world. But why do companies resort to this questionable tactic? Here are some reasons that explain why companies are greenwashing more and more:
1. image cultivation and reputation
One of the main reasons why companies resort to eco-fraud is to improve their image and reputation. In a society that is becoming increasingly environmentally conscious, companies want to present a positive image as environmentally friendly and sustainable. This is the only way they can gain the trust of consumers in the long term and stand out from the competition. Even if a company's environmental initiatives are minimal or non-existent, presenting a green image can help to create a positive public image.
2.competitive advantage
Companies can use greenwashing as a strategy to secure a competitive advantage. In sectors where environmental friendliness is considered a unique selling point, claiming to be more sustainable than the competition can help to gain market share and attract customers.
3.marketing and sales targets
Sustainability fraud can also be used to promote the marketing and sale of products or services. By labeling their products or services as environmentally friendly, companies can create a positive perception among consumers and influence purchasing behavior. This can lead to higher sales and profits.
4.circumventing regulatory requirements
In some cases, companies engage in greenwashing to evade regulatory requirements. By creating the impression of being environmentally friendly, they try to circumvent stricter environmental regulations or appease public opinion without actually taking substantial measures to protect the environment.
5. influence investors and stakeholders:
It is possible for companies to engage in greenwashing to influence investors and other stakeholders. By presenting themselves as environmentally friendly, they can arouse the interest of investors who are particularly interested in sustainable aspects and at the same time strengthen the confidence of shareholders and other interest groups.
Companies tend to use eco-fraud to improve their image and strengthen their reputation. They strive for a competitive advantage by positioning themselves as more environmentally friendly than their competitors. It also often serves as a marketing and sales objective by creating a positive perception among consumers. Some companies also use this tactic to circumvent regulatory requirements. Greenwashing can be used to influence investors and stakeholders and to arouse their interest in sustainable aspects.
Companies use "bluewashing" as a strategy to improve their image. This involves concealing ethical and moral missteps and weaknesses as best they can by promoting their environmental and socially responsible initiatives as a distraction. This includes aspects such as environmental policy and sustainability measures, good working conditions, compliance with ethical principles, moral principles and social commitment. Other forms of bluewashing include the promotion of charitable activities, the use of diversity and inclusion claims to distract from unethical actions, and the exploitation of the term "corporate social responsibility" to hide a company's lack of commitment to its stakeholders.
These topics are increasingly taking center stage and are highlighted as an integral part of the company. The aim is to give consumers the impression that the company or brand is particularly sustainable, socially committed and environmentally conscious. However, this is often just a marketing strategy with empty promises that companies use to make themselves stand out and deliberately deceive consumers.
In contrast to bluewashing, the term greenwashing is much more common and better known. Greenwashing refers to a marketing practice in which products or services are falsely presented as environmentally friendly when in fact they are not. This tactic aims to exploit consumer interest in environmentally friendly and sustainable products for their own purposes. Fake sustainability is often used to give consumers the impression that a product is less harmful to the environment than it really is or that it is even an environmentally friendly alternative.
Bluewashing can also be seen as an umbrella term for greenwashing. This is not only about environmental and sustainability issues, but also about concealing aspects of a company's social commitment. In particular, attention is drawn to supposedly positive efforts in order to divert attention from any ethical deficits. Clear and transparent communication and independent controls are necessary to prevent companies from using bluewashing and greenwashing strategies.
There are many different types of greenwashing that companies can use to polish their image and present themselves positively in the area of environmental sustainability. Some companies use purely PR measures without making concrete improvements to their production methods or supply chain. Others use misleading labels such as "sustainable" or "green" for their products without actually meeting the standards. This often gives consumers and stakeholders a false impression of a company's actual sustainability efforts. Sustainability fraud can therefore undermine a company's credibility and jeopardize customer trust. It is therefore important to recognize and critically question the various forms of greenwashing in order to distinguish authentic sustainability practices from marketing strategies.
It is possible for companies to run deceptive advertising campaigns suggesting that their products or services are more environmentally friendly than is actually the case. This can be done by using green colors, images of nature or environmental slogans without taking appropriate environmental measures. Misleading terms and phrases such as "environmentally friendly", "regional" or "natural" are often used. Terms such as these are not legally protected and are therefore, in the worst case, just empty words used as a marketing tool. The terms "organic" and "eco", on the other hand, are legally protected and may only be used for products that are actually organically grown. In contrast, terms such as "natural cosmetics" or "organic cosmetics" are not legally protected, which is often used for cosmetic products in particular. It therefore makes sense for consumers to look out for organic labels.
Companies often heavily advertise their so-called lighthouse products or services, which are supposed to be particularly sustainable. Despite this, the main business of these companies can still be harmful to the environment and have little impact on sustainability. Fashion companies in the fast fashion sector in particular advertise individual collections or garments made from recycled fibers or organic cotton. However, this does not change the fundamental problem of the business model, which continues to rely on frequent collection changes. Furthermore, the use of certified organic cotton says nothing about the working conditions during harvesting or the general production of the raw material.
Companies may selectively report on their environmental initiatives and emphasize only positive aspects, while neglecting or obscuring important environmental issues or negative impacts of their business. This can lead to an incomplete or misleading picture of a company's actual environmental impact. It is therefore crucial that companies not only emphasize the positive aspects of their environmental measures, but also provide transparent information about potential negative impacts. Comprehensive and honest reporting enables stakeholders to make informed decisions and properly assess a company's commitment to environmental protection.
A common example is the use of environmentally friendly packaging. Companies often use ecological packaging to give the impression that their products are sustainable. However, this often overlooks the fact that packaging is only a small part of a product's overall environmental problem. Important environmental aspects are often ignored. In terms of apparent sustainability, packaging reveals a lot about a company's credibility: it provides information about a company's actual activities. Recycled paper, recyclable cardboard and little or no use of plastic are clear signs of companies that are highly unlikely to be greenwashing.
Some companies rely on superficial actions such as sponsoring environmental events or participating in environmental campaigns. This gives the impression that they are actively committed to environmental protection. However, the reality often remains hidden, because behind this façade little or nothing is done to actually improve their own environmental footprint. It is important that companies not only rely on outward appearances, but also take concrete measures to effectively reduce their environmental impact.
Some companies may use unverified environmental labels to give the impression of environmentally friendly products. Labels affixed to products are intended to make it clear whether they meet sustainable standards. However, it can be problematic if companies use their own labels without legal regulation. "Green" or "climate-neutral" labels should be viewed with caution by consumers, as completely climate-neutral production is often unrealistic and can include offsetting without actually reducing emissions.
A questionable strategy in the area of greenwashing is the deliberate distraction from relevant environmental problems. Companies deliberately use less significant environmental initiatives or emphasize positive aspects of their business to distract from practices that are actually harmful to the environment. This tactic of distraction draws attention away from pressing environmental issues, obscuring the real impact the company has on the environment. It is important to see through such superficialities and instead advocate for transparent and sustainable practices in order to achieve real environmental improvements in the long term.
The various forms of greenwashing illustrate the different possibilities that companies can use. The challenge for consumers here is to recognize which product is the result of a truly sustainable process and which is merely greenwashing. Eco-fraud has a huge impact on customers' purchasing decisions and has a negative impact, especially for organizations that are truly sustainable. Customers who have fallen victim to deception also lose trust in honest companies. Bogus sustainability serves as a tool to maximize profits and influences the perception of the company in question.
To detect sustainability fraud at a company, there are various signs and methods that consumers, investors and other stakeholders can use to check the credibility of environmental claims and sustainability practices. Often, however, this can be difficult to detect. Nevertheless, there are some key indicators and methods to identify greenwashing at a company:
1. critical analysis of advertising and marketing materials
To identify signs of fake sustainability, you should take a close look at various aspects such as advertising campaigns, product packaging and the company website. A common sign of greenwashing is the overuse of green symbols, nature imagery or eco-friendly slogans to give the impression of environmental commitment, but without concrete evidence or data on the company's actual environmental initiatives. It is therefore important to critically scrutinize and carefully check whether the published information and representations are actually in line with the company's real efforts.
2. review of environmental and sustainability reports
In order to completely rule out greenwashing, a company's environmental and sustainability reports should also be analyzed. This is the only way to ensure that all comprehensive information about the company's environmental goals, measures and results are included. A superficial or vague report could omit critical details and obscure the true extent of environmental sustainability efforts. Therefore, it is worth reading the reports thoroughly to get a comprehensive picture of how the company is fulfilling its environmental responsibilities and whether it is acting in a truly transparent and responsible manner.
3. independent research and review
It is also worth carrying out comprehensive research on the company. The sources from which information is obtained should be trustworthy and credible. Careful analysis of the company's past is important to determine whether it has ever caused negative environmental impacts or been involved in controversial environmental practices. Only through a thorough investigation can potential risks and opportunities for investors, customers and other stakeholders be uncovered. A company's transparency and accountability are key factors for trust and the long-term environmental sustainability of its business practices.
4. comparison with industry standards and certifications
To comprehensively assess a company's environmental and sustainability practices, a comparison of industry standards and certifications is relevant. Such a comparison can provide information on whether the company is actually making serious efforts to comply with environmental and social standards. Comparisons with established standards such as ISO 14001 for environmental management or the B-Corp certification are useful here.
ISO 14001 is an internationally recognized standard that helps companies to identify, monitor and reduce environmental impacts. By implementing ISO 14001, companies can improve their environmental performance and commit to pursuing sustainable practices. ISO 14001 certification signals that the company takes its environmental responsibility seriously and is taking concrete measures to improve its environmental performance. B-Corp certification, on the other hand, focuses not only on environmental aspects, but also on social and societal concerns. Companies that meet the strict criteria for B Corp certification have proven that they not only operate profitably, but also have a positive impact on the environment and society. B Corp certification is therefore a clear indication that a company lives up to its claim of environmental sustainability and is committed to a holistic approach to value creation.
5. transparency and openness of the company
Companies must communicate their environmental practices and performance transparently and openly. Reputable companies are characterized by their willingness to provide comprehensive insights into their environmental strategies, goals and results. An open attitude towards constructive criticism and feedback is another characteristic of responsible corporate governance. Only through transparency and openness can companies gain the trust of stakeholders and build long-term partnerships. It is important that companies act proactively and continuously improve their environmental practices in order to make a positive contribution to society and the environment. In this way, they can not only strengthen their own reputation, but also actively contribute to a more sustainable world.
6. consideration of industry trends and innovations
Companies should keep an eye on current industry trends and innovations in the field of environmental protection and sustainability. This is the only way to ensure that they keep up with the latest developments and do not run the risk of falling behind the competition. Companies that strive to be true leaders in environmental sustainability are often characterized by their leadership in innovative environmental solutions. It is essential that companies continually evaluate how they can evolve their processes and products to meet sustainability and environmental requirements. By responding to current trends and innovations, companies have the opportunity to position themselves as pioneers in the industry and make a positive contribution to the environment.
7. consistency and credibility of the company's statements
It is also important to pay attention to a company's consistent and credible communication on environmental issues. A company that makes exaggerated statements and fails to deliver on its promises risks being accused of greenwashing. It is therefore essential that companies back up their sustainability promises with concrete actions and transparent reporting in order to gain the trust of consumers and stakeholders and ensure long-term credibility.
In the area of environmental awareness and resource conservation, it is crucial for companies to protect themselves from greenwashing. To prevent this negative image, companies should take the following measures:
Authenticity and transparency in sustainability communication
It is crucial that companies are authentic in communicating their sustainability efforts. By disclosing relevant information and data, they create transparency and enable their stakeholders to verify the statements and messages. Authenticity is the key to building trust and avoiding eco-fraud.
Sustainability reporting
Regular and comprehensive reporting on environmental performance and targets can help to demonstrate credibility and avoid greenwashing. A clear presentation of progress and results in the area of environmental sustainability is crucial.
Responsible procurement and production
Another important step in avoiding green marketing is the introduction of responsible sourcing and production practices. Companies should ensure that their supply chains are sustainable and do not have a negative impact on the environment and society. This requires careful monitoring and control of the entire value chain.
Strict review of environmental claims
To prevent greenwashing, companies should rigorously review their environmental claims and ensure that they are based on sound data and facts. It is important not only to emphasize positive aspects, but also to openly address potential challenges and impacts. An honest self-assessment is crucial for credible sustainability communication.
Implementation of independent certifications
To strengthen stakeholder confidence, companies can consider independent certifications. These external assessments confirm a company's sustainability efforts and provide an objective review of performance. By implementing independent certifications, companies demonstrate their commitment to transparency and credibility in sustainability communication.
Commitment to long-term goals
Companies should set long-term sustainability goals and actively pursue them. Specific measures and investments in environmentally friendly technologies can avoid greenwashing and create long-term added value.
Through these measures, companies can ensure that their efforts in the area of environmental sustainability are authentic and make a real contribution to environmental protection. This not only builds stakeholder trust, but also supports the long-term move towards a more sustainable economy. By consistently implementing these green marketing avoidance measures, companies can build long-term trust and act as credible sustainability players.
Companies use greenwashing to give themselves an environmentally friendly image without having any real environmental impact. Two common methods are the use of misleading environmental labels and the staging of fake sustainability in advertising and marketing campaigns. Here we take a look at some examples of companies that have been guilty of this questionable practice:
Volkswagen - Dieselgate
In 2015, the Dieselgate scandal rocked the automotive industry. Volkswagen was found to have installed software in its diesel vehicles that simulated lower pollutant levels during emissions tests than in real driving conditions. This manipulation affected around 11 million vehicles worldwide. The consequences were drastic: Volkswagen had to pay billions in fines, there were recalls and sales collapsed. The scandal led to a considerable loss of trust among consumers and caused lasting damage to the company's reputation. Volkswagen responded by focusing more on the development of electric vehicles and announcing a comprehensive restructuring towards sustainable mobility.
H&M - fast fashion and fake sustainability
H&M is another example of greenwashing. The company regularly promotes sustainable collections, such as the "Conscious Collection", which is said to be made from recycled materials. However, critics argue that these initiatives only account for a small fraction of total production and that H&M's basic business model, which is based on quick collection changes and cheap mass production, can hardly be described as sustainable. Despite this criticism, H&M has taken steps to become more transparent by publishing information about suppliers and sustainability efforts on its website.
Nestlé - Environmental and social issues
Nestlé, one of the world's largest food companies, has often presented itself as environmentally friendly and socially responsible. At the same time, however, the company has been repeatedly criticized for unethical business practices. Allegations include the overuse of water sources in water-scarce regions, environmental pollution from plastic packaging and human rights violations such as child labor in cocoa production. Despite these problems, Nestlé has tried to improve its sustainability goals in recent years, for example by committing to reducing plastic waste and introducing projects to support sustainable agriculture.
BP - The green image and the reality
BP has tried to position itself as a pioneer for sustainable energy through its extensive advertising campaigns. Despite these efforts, BP remains responsible for one of the biggest environmental disasters in history: the 2010 Gulf of Mexico oil spill, which caused enormous environmental damage and cost BP billions in fines and compensation. Following the disaster, BP invested heavily in renewable energy and adapted its business strategy to play a leading role in sustainable energy. Nevertheless, consumer confidence remains severely affected by past events.
These examples show that sustainability fraud continues to be a problematic reality. It is critical that consumers and stakeholders look critically behind the scenes and hold companies accountable to effect real environmental change. Only through transparency and honest efforts can companies truly help protect our planet.
Patagonia - Authentic sustainability
Patagonia is an excellent example of a company that has successfully distanced itself from greenwashing. The company is known for its sustainable practices, such as using recycled materials, promoting fair working conditions and supporting environmental initiatives. Patagonia has committed to donating 1% of its sales to environmental protection and is transparent about its supply chains and production processes. The consistent implementation of these principles has earned Patagonia a strong and credible reputation in the area of environmental sustainability.
IKEA - Sustainability in practice
IKEA has also taken extensive measures to become more sustainable. The company has set itself the goal of becoming fully circular by 2030 by using recyclable materials and renewable energy. IKEA has introduced initiatives such as the buy-back program for old furniture to extend the life cycle of its products and reduce waste. In addition, the company is continuously working to increase transparency in its supply chains and improve working conditions at its suppliers. These serious efforts have helped IKEA to be perceived as a credible player in the field of environmental sustainability.
These examples show that there are both problematic and positive approaches to dealing with environmental promises. It is crucial that consumers and stakeholders look critically behind the scenes and hold companies accountable to effect real environmental change. Only through transparency and honest efforts can companies truly contribute to protecting our planet.
To avoid sustainability fraud and promote authentic environmental protection, we have put together a 10-step action plan for companies:
2. use of independent certifications:
3. prepare comprehensive sustainability reports:
4. holistic approach:
5. consistent and credible statements:
6. involve stakeholders:
7. innovation and continuous improvement:
8. education and awareness:
9. set long-term goals:
10. responsible procurement:
By implementing these measures, companies can not only avoid greenwashing, but also make a real contribution to environmental protection and gain the trust of their customers and stakeholders. Authentic efforts promote a positive brand perception and contribute to the long-term success of the company.
In today's world, where the protection of our environment and ecological sustainability are crucial, it is of great importance to actively combat greenwashing in order to promote real progress in these areas. Companies that take authentic environmental protection measures gain the trust of consumers. They also make an important contribution to environmental protection. By acting in an honest way, companies help to raise awareness of environmental protection and have a positive impact on the environment. Fake sustainability is not only misleading for consumers, but it also undermines the efforts and endeavors of genuine environmentalists and advocates. It is therefore the responsibility of companies to distance themselves from deceptive marketing strategies and instead disclose what concrete measures they are taking to protect our environment. Transparency and honesty are essential to ensure credible and sustainable corporate governance. Only if companies are actively committed to environmental protection and communicate this transparently can we create a greener future together. It is therefore essential that companies live up to their responsibilities and commit to sustainable practices in order to bring about positive change in society and for our environment.
