Defining the shades of green
Greenwashing is a term used to describe when companies make false or misleading claims about their environmental practices in order to appear more environmentally friendly and sustainable than they really are. This is done in order to appeal to consumers who are becoming increasingly environmentally conscious and to attract employees with strong sustainability credentials.
Greenwashing can also be used to attract a valuation premium and lower the cost of capital.
Greenwashing can take different forms, such as:
"greencrowding" where companies hide in a group to avoid discovery
"greenlighting" where a company emphasizes a small aspect of their business that is environmentally friendly while obscuring the fact that the majority of the company's operations are not.
"greenshifting" where companies imply that the consumer is at fault and shift the blame on to them,
"greenlabelling" where marketers call something green or sustainable but a closer examination reveals that their words are misleading.
"greenrinsing" refers to when a company regularly changes its ESG targets before they are achieved.
"greenhushing" where companies underreport their sustainability progress for fear of scruitiny.
“Greenwashing needs to stop as it hampers investment strategies that support the transition to a green economy and can result in the misallocation of capital. Misleading statements can also perpetuate poor environmental practices” (IMF's Global Financial Stability Report, 2021).
Greenwashing is never ok. But the fear of greenwashing can be equally dangerous too. Greenhushing, keeping quiet about authentic sustainability progress due to the fear of greenwashing, slows the sustainability movement and stops people switching to products and services that are better for our world.
Get in touch to hear how to empower your marketing, sustainability and legal teams with the capability and conviction to tell your sustainability stories, without fear of greenwashing or any of the unappealing shades of green.
