What does greenwashing mean?
More and more companies are communicating their commitment to the environment and stating that they produce sustainable products or act sustainably. This is often not due to a sudden change in corporate values, but to the demand for green products.
89% of Germans would like companies to operate in a more sustainable and environmentally friendly way. Almost 90 percent of consumers explicitly want to buy sustainably produced products and would even pay more for them. Companies are aware of this and are adapting their communication and marketing accordingly. And this is where the problem lies: these products or supply chains are often anything but sustainable and pure marketing strategies. Studies show that 53.3 percent of environmental claims in the EU are vague, misleading or unfounded. Moreover, 40 percent of the claims are not substantiated.
Greenwashing: Definition
The Duden dictionary describes greenwashing as the "attempt (by companies, institutions) to presentthemselves as particularly environmentally conscious and environmentally friendlyby donating money to ecological projects, PR measures or similar". Greenwashing therefore refers to a practice in which companies use misleading marketing strategies or PR measures to present themselves as more environmentally friendly than they actually are. The aim of companies is to exploit consumers' environmental awareness and improve their corporate image.
If you translate greenwashing into German, this quickly becomes clear: "washing oneself green" has little to do with honest, intrinsically motivated action.
The seven sins of greenwashing
- Hidden compromises
Advertising with environmentally friendly product features in order to omit the less ethically correct aspects. - Lack of proof
The use of statements such as "ecological" without being able to verify or prove the statements. - Sin of vagueness
Vague, ill-defined or ambiguous statements that have no substance when examined closely. - Sin of irrelevance
Products are advertised with claims that have no added value for testing the sustainability of the product. - Lesser evil
Statements that are true but distract from the greater harm caused by the product.
Example: Coca-Cola emphasizes that its plastic bottles are recyclable, but at the same time is one of the world's biggest contributors to plastic pollution - Sin of lying
False statements that mislead consumers. - False label
Statements that give the impression of having been thoroughly checked by external bodies.
Examples of greenwashing
From packaging to advertising - examples of greenwashing can be found in many industries.
- A concrete example of greenwashing is the oil company Shell, which received the negative award from the German Environmental Aid for the "most audacious environmental lie" in 2022. Shell Germany had advertised aCO2 compensation of 1.1 cents per liter at its filling stations. According to Environmental Action Germany, the company gave the impression that motorists "can use their vehicle without a guilty conscience and without damaging the climate", even though every journey still emitsCO2. Shell justifies theCO2 compensation by purchasing emission certificates for reforestation projects in the global South. However, the effectiveness of these projects is questionable, asCO2 emissions remain in the atmosphere longer than the trees can bind the carbon.
- Another example is Coca-Cola, which advertises with recyclable plastic bottles, but at the same time is one of the biggest plastic polluters in the world.
- According to Deutsche Umwelthilfe, McDonalds is also guilty of greenwashing: with its nationwide "I am beautiful" advertising campaign, the company is promoting disposable packaging as "beautiful". Yet the advertised recycled content of the paper cups is just 40 percent. According to Deutsche Umwelthilfe, McDonalds is thus creating a positive image and acceptance of disposable packaging - instead of relying on reusable products for on-site consumption.
Misleadingdue to unclear environmental labels
A major problem and another cause of greenwashing are the many different labels, the so-called green claims. Throughout Germany, there are a large number of quality labels that are only of little or limited trustworthiness.
Companies often use vague, unverifiable or misleading claims to advertise their products as "environmentally friendly" or "climate neutral". In most cases, the green promises are not backed up by concrete measures or significant environmental benefits. It is not clear to consumers which labels are really trustworthy. For example, only eight percent know that "climate neutral" does not mean the same thing as "no greenhouse gas emissions".
Green Claims Directive: Greenwashing Directive
To counteract this consumer deception, the European Union has adopted the Green Claims Directive has been launched. The new directive has the specific aim of preventing greenwashing and creating uniform standards for the use of environmental claims. It also aims to promote transparency, including through the following measures:
- Vague environmental promises such as "environmentally friendly" are prohibited without proof.
- Climate-neutral advertising is only permitted if it is supported by verifiable measures.
- Voluntary sustainability seals are prohibited without external verification.
- A reference to the limited function is required when using third-party accessories.
Legal consequences and business risks of greenwashing
With the introduction of this Greenwashing Directive, companies that are accused of misleading will face legal consequences. These include fines, exclusion from public contracts and subsidies or confiscation of revenues from transactions with non-compliant environmental claims. In addition, greenwashing entails considerable risks such as
- Loss of reputation,
- Declining consumer confidence
- and potential penalties, which can jeopardize a company's credibility and financial well-being.
Read our blog article to find out how to communicate your commitment without greenwashing and avoid business risks.