How Greenwashing Misleads Consumers

“This product is green.” “Net Zero.” “Sustainable”. “Earth friendly.” “Carbon neutral.” “Eco friendly.” “Natural.” “Recycled plastic” and more.

These are the phrases that are increasingly being emblazoned in the tags that come with nearly all products, especially those manufactured by big brands. Almost every shopper these days comes across them regularly. Companies advertise their products with such phrases to give the impression that they're helping the environment. But research has found that most of such labels aren’t true, wholly or partially, and are designed to deceive would-be customers into buying their products. This practice that hoodwinks customers is called “greenwashing.” And it has been a hugely successful strategy.

Greenwashing is a claim that is either incomplete or unverifiable or both. As the concerns about climate change have grown, so has the number of climate and environment-conscious customers. And greenwashing has emerged as a way for companies to make their products appealing to these customers. It’s hard to see through misleading claims, even for a fully aware customer. While these labels might be true in some cases, sometimes they are deliberately not telling the full story to try to trick customers into believing that, by buying the product at hand, they are making a great choice.  

'Sustainable' fabric

When people are fooled into buying a product this way, they might think they are doing their bit by contributing positively to the climate, when, in reality, they're not. Here are a few examples of such malpractice: A fashion brand promoting clothes that are made of a 'sustainable' fabric, though the rest of their clothing line is detrimental to the environment. Ingredients in a product being described as 'natural' or 'organic', when only a portion of the ingredients can be described that way. 

That said, sometimes these are not outright lies. Companies might be sincere in their efforts to help the environment but fail to see the big picture that incorporates all sides of the matter. In this case, they are not to blame. It can be really hard for a normal person to discern greenwashing, as there's no simple way to identify it without doing some research on the company as well as the products it sells.

Greenwashing not only fools the customers; sometimes, when caught lying, companies also have to pay a huge price for their deceitful behaviour. In 2015, the US Environmental Protection Agency (EPA) took action against Volkswagen, a German-based automobile company, for cheating on emission tests. It installed software in its diesel-powered cars that altered the performance to reduce the emission levels. While the company was marketing its cars as low-emission and eco-friendly, they were emitting up to 40 times higher toxic pollutants than allowed by that country’s standards. The ensuing scandal proved to be the most expensive, with over USD 30 billion in fines and damages, the largest in the history of the automotive industry. 

Governments in many countries are also beginning to step in to protect consumers. From airlines to food companies, many corporate brands are facing legal and regulatory challenges for misleading the public with lofty climate claims. France, starting in January 2023, made it mandatory for companies that promote “carbon neutral” to provide verifiable information to back it up. Norway’s consumer protection agency, for its part, has warned the fast fashion giant H&M that the tool it was using to claim its products as sustainable is not enough and asked it to stop doing so. 

Similarly, a British government agency recently opened investigations into three fashion brands to put them under its crosshairs over their green claims. It also looked into the climate claims of several fast-fashion brands and concluded that it’s misleading to stamp a green leaf on a product and call it “recycled,” unless specified how much of its content is recycled. In Denmark, a national court warned the country’s biggest pork producer that it’s misleading to label its pork “climate-controlled.” A Dutch court banned an airline from using the slogan “fly responsibly” in its advertisements. The U.S. Securities and Exchange Commission has started scrutinising investment funds that make lofty claims. The commission has made it mandatory to fully and fairly disclose what they are selling, and act consistently with those disclosures. 

Significant progress 

Likewise, in 2022, a prominent US bank was made to pay $4 million to settle charges that it misled investors about investments marketed as environmental, social and governance funds. What’s more, the European Union (EU) is reported to have made significant progress in combating greenwashing through regulatory measures, particularly with the adoption of the Empowering Consumers Directive, which includes greenwashing behaviours in the list of misleading practices outlined in the Unfair Commercial Practices Directive, among other provisions. 

The best way to address the problem of misleading claims is to prevent them from happening in the first place. Tackling greenwashing requires companies to disclose full and accurate information so that they can unequivocally explain what they mean when they label their products “environmental and climate friendly.” This practice benefits both customers and companies. How? The customer can make a well-informed choice, while the latter can save themselves from being caught, which only fuels distrust in them. These labels, when woven into a product, sound great, but where is the transparency? What are the actual commitments, certifications, measurements and evidence backing them up? Customers have every right to ask these questions. 

(Basyal is a journalist at the Rising Nepal.)