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Thibaud Petit

Feb. 22, 2023

Greenwashing

Misleading Practices

Greenwashing and abuse of "carbon neutrality" now punishable by law

 

 

 

In recent years, some companies have redoubled their ingenuity to green all their activities in order to make the most of the opportunities of the ecological transition. Until further analysis shows that this is not the case. This practice is more commonly known as greenwashing. Although the concept is now widespread and takes many forms, it remains largely unknown. This is why we have decided to dedicate an article to it. What is greenwashing? What do you risk legally? What forms does it take? How can you avoid falling into the  ‘greenwashing trap’? We will explain it all to you.

 

What is greenwashing?

 

The accelerating shift towards more sustainable consumption patterns creates new opportunities. However, some companies do not hesitate to ride the green wave by making their products or services appear "greener" than they really are. This marketing technique is called greenwashing. As highlighted by ClientEarth, greenwashing consists of a company using advertising and public messages to appear climate- and environment-friendlier than it actually is. This includes for example using a variety of practices to distract consumers from the fact that its business model and activities are actually very damaging to the environment.

 

Greenwashing and abuse of the "carbon neutrality" label punished by law

 

To curb greenwashing, many European countries have decided to tighten their legislation. From now on, if a company's sustainability claims cannot be verified or prove to be misleading, the company is guilty of greenwashing. In Belgium, the misuse of the labels "carbon neutrality", "zero carbon", "climate neutral ", "fully offset" is considered an unfair commercial practice and prohibited. In accordance with the Belgian Code of Economic Law, companies that use this practice are liable to a fine of up to 80,000 euros and up to 100,000 euros in France in accordance with the decree supplementing the Climate and Resilience Act of 22 August 2021. A fine that can amount to millions of euros for television advertising campaigns. 


According to the Belgian SPF Economy, a campaign of checks carried out in 2020 in Europe and focused on greenwashing revealed that 344 websites made dubious environmental claims.  Brands like H&M, Ikea or even flight companies like Air France offering to its customers "reforestation" or "sustainable fuel" options in order to offset its CO2 emissions experienced suchgreenwashingscandals. The SPF Economy provides you with a list of practical elements to help you identify greenwashing. If you, as a Belgian consumer, notice a dubious environmental claim, you can report it to the contact point of the Economic Inspection.

 

 

Six shades of green by Planet Tracker

 

Since the emergence of greenwashing around the 1980s in the US, many ramifications have developed. These ramifications are detailed in a study by Planet Tracker, a think tank created in 2018 and registered in the United Kingdom. As a company, you must be aware of these practices to avoid unpleasant surprises. Let's analyse these notions together in the light of concrete examples.

 

 

Greencrowding

 

Greencrowding refers to the tendency for a company to join a group knowing that the implementation of policies or initiatives will take time.  In other words, belonging to a group reinforces the company's inaction. After all, why should one do something at all when the mass is not moving? Concretely, these are companies that adhere to programmes or initiatives (e.g. zero waste, zero plastic) without necessarily respecting them. The study cites the Alliance to End Plastic Waste (AEPW) as an example. Interestingly, the Alliance includes some of the world's industrial heavyweights, such as oil giants ExxonMobil, Shell, plastic packaging companies such as Sealed Air or well-known brands such as PepsiCo. According to a euronews’ article, the case of AEPW illustrates the concept of greencrowding perfectly by the fact that it includes eight of the major producers of single-use plastic waste.

 

Greenlighting 

 

Greenlighting is a practice where a company "over-communicates" the minimal environmental features of its operations or products in order to divert consumer attention from its environmentally damaging activities. Some also call it the diversionary technique.This technique is already well established in the automotive industry, where some dealerships such as Toyota do not hesitate to praise their electric vehicles even though the green option represents only a tiny part of their total production. According to the same article of euronews, Toyota's share of electric vehicles was only 0.2% of total sales in 2021.

 

Greenshifting 

 

For a company, greenshifting means suggesting that the consumer is at fault and putting the blame on them. The example most often cited in the press is Shell’s communication on Twitter stating that fossil fuel extraction goes further because of high consumer demand. In November 2020, the Anglo-Dutch company published a survey on Twitter. This publication aimed at challenging internet users by asking them what they were ready to do "to help reduce their CO2 emissions". The survey caused a stir on the web. Indeed, Shell’s communication had been seen as a provocation and a desire on the part of Shell to make consumers bear responsibility for global warming.

 

Greenlabelling

 

Greenlabelling is a practice where a company defines its product or service as sustainable, until closer examination reveals that it is not. It is probably the best known form of greenwashing. Without citing the practice as such, some bodies such as the UK's Advertising Standards Authority (ASA) are going further to curb the spiral of misleading claims. From now on, companies will no longer be able to use slogans such as " 100% eco-friendly", "zero emissions", "contributing to a more sustainable future" unless they can prove their veracity with scientific data or tangible evidence. 

 

One example of greenlabelling is KLM and its CO2ZERO carbon offset programme (like the Air France Case). For the airline, this programme was supposed to finance reforestation projects and the purchase of biofuel. An advertisement campaign strongly denounced by Fossielvrij NL, supported by ClientEarth and Reclame NL. In an article of the BCC, the groups point out the misleading nature of the advertisement telling customers that they can fly without emitting carbon and that the CO2ZERO project does practically nothing to limit the damage to the environment. A conclusion also shared in a report by the Dutch Advertising Regulator (RCC).

 

Greenrinsing 

 

Greenrinsing refers to a practice where a company regularly changes its ESG targets before having met them. Greenrinsing occurs mainly in companies that set ambitious reduction targets, but revise them downwards at the last moment because they cannot be met in time. Planet Tracker cites Coca-Cola and PepsiCo as examples of companies that have changed their recycling targets twice and three times respectively in the last five years. These examples could multiply in the future with major companies (Nestlé, PepsiCo, Coca-Cola, Mars Inc., L'Oréal, SC Johnson) aiming to drastically reduce their plastic quantities by 2025. According to the Ellen MacArthur Foundation, this ambition is highly compromised in view of the trajectory taken by the participating brands.

 

Greenhushing

 

The last notion is technical, but it reveals how sophisticated greenwashing has become. According to Planet Tracker,greenhushing refers to the practice of corporate management not reporting or hiding their environmental actions in order to escape investor scrutiny. 

 

L'Officiel Belgium, a magazine renowned for its expertise in fashion, lifestyle and luxury, defines greenhushing as a tendency for brands to conceal their ecological efforts. The latter justify this excess of modesty by underlining the fact that " they are not yet 100% sustainable and their desire to do even better in order to be totally consistent in their processes". According to an article of the Belgian TV public company RTBF, greenhushing mainly affects small companies freshly arrived on the market and do not dare to communicate on their eco-responsible approach. This may sound counter-intuitive: why would an excess of modesty be detrimental to a third party? 

 

But for the authors of Planet Tracker, this counterproductive silence is more insidious than it seems. They argue that management teams may be trying to achieve an increase in green value without subjecting themselves to investor scrutiny.How? By suggesting that the company's sustainability performance is stronger than its official statements suggest.  Investors may consequently succumb to greenhushing and undervalue the sustainability of the company. The authors go further by highlighting that managers may use greenhushing as a defence mechanism to avoid validating their ESG objectives and avoid active and intensive engagement on sustainability issues.

 

How to avoid greenwashing?

 

Despite the latest greenwashing sophistication, there is no need to be paranoid. To avoid unpleasant surprises, we advise you to keep up to date with new regulations. In parallel, each of your communication campaigns on sustainable development must be prepared very carefully. To do so, you can rely on the six principles of the Global Guidance on Environmental Claims 2022 developed by the World Federation of Advertisers (WFA) in line with the Paris Agreement and the European Green Deal. This guide has been transposed to the Belgian level within the CommToZero platform, an alliance of all marcom sectors in Belgium. 

 

More generally, communication and transparency of your actions, both positive and negative, are essential. However, your communication must find a balance between neither saying too much (greenlighting) nor too little (greenhushing). The journey towards decarbonisation is a marathon alike : the idea is not to be at the head of the peloton. It’s rather about focusing on small, impactful actions while emphasising in your communication campaigns your desire to improve. Let yourself be inspired from our clients' experiences. 

 

At Tapio, the promotion of transparency is an essential component of your support. However, the carbon footprint adventure goes through several stages. The first step is to understand your impact. By understanding your impact, you will be able to set reduction targets to inspire change within your sector. Want to know more? Feel free to estimate your impact or ask for a quote based on your profile and expectations!

 

 

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