Beware of products using ‘greenwashing’ tactics

“Greenwashing” – we’ve all heard the term, but what does it really mean when a business or organisation is accused of the practice of greenwashing? This is generally accepted to be a deceptive marketing tactic in which the perception that a company is environmentally friendly is promoted. This can include misleading or unverifiable claims about the environmental benefits of a service, product, technology or company policy.

Greenwashing – what exactly does it entail?

Basically, greenwashing is creating a false impression about a company’s environmentally friendly credentials. An example of greenwashing is when a company launches a big marketing campaign outlining how their product is saving the environment, when in fact it is wrapped in plastic and uses a lot of energy to manufacture.

Greenwashing seems to be everywhere. Products of all sorts are being advertised as “organic”, “natural” and “environmentally friendly”, to name but a few terms. However, many manufacturers out there are intentionally misleading consumers into thinking they are buying green products when, in fact, they are just being fooled by marketing spin. Existing research proves that greenwashing is very effective in helping companies achieve higher profits for products, even when their claims are untrue.

“Many companies face intense competition which forces them to continuously differentiate themselves and their products from industry rivals,” says Dr Jako Volschenk, senior lecturer in Strategy and Sustainability at the University of Stellenbosch Business School (USB). “Green credentials have become a source of differentiation for such companies,” he adds.

Study shows consumers penalise greenwashed products

Unfortunately, many such claims are false, ambiguous or deceptive; promoting products by intentionally and inaccurately overstating their green properties. “A recent research study we conducted, indicates good news for companies that tell the truth clearly, while it sends a warning to those who bend the truth,” says Dr Volschenk.  He added that their study conducted amongst 481 consumers across diverse demographic and region profiles showed three interesting trends. 

“When uninformed consumers are asked to make a selection between conventional products and green-branded products, they are often prepared to pay more for green-branded products, regardless of whether the claim is true or not. As soon as consumers are informed to spot greenwashing, genuinely green products hold a premium position,” he explains. 

Research has also shown that, once consumers can spot greenwashing, they seem to penalise greenwashed products – and their willingness to pay drops even below that of the conventional product. “The greenwashing penalty is not a statement of doubt in the quality of a product, but rather an expression of distrust in the brand, driving consumers to instead opt for a product that makes no claim, rather than one that makes fake claims,” says Dr Volschenk.

How to prove true green status

According to Dr Volschenk, green companies should firstly commit to the education of consumers about the potential risk of misleading or false information. Once consumers can identify greenwashing tactics, truly green companies must then, secondly, offer true and transparent information about their own products.

“One way of providing trustworthy information to consumers is to show certification by a reputable environmental standards agency. For example, the fishing industry makes use of the Marine Stewardship Council (MSC) label to acknowledge companies who limit the environmental impact of their activities,” says Dr Volschenk. 

Thirdly, companies should ensure that their reputation is spotless in other aspects too. There is little value in claiming a product has a lower environmental impact when it is hazardous in other respects. “Organic cigarettes may tick the green box, but its health impact would be open to attack if it tried to gain any market advantage from its organic status,” he says.

Dr Volschenk explained that there are very few products without some environmental impact. “If your product has a negative impact of any sort, it may be wise not to ask consumers to pay a premium for your product. It would be wiser to simply position your product ahead of the rest, by demonstrating that you are making an effort to limit some negative aspects – and by being transparent about your impact on the environment,” he says.


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