WHAT EVERY BUSINESS NEEDS TO KNOW ABOUT GREENWASHING

A COMPREHENSIVE GUIDE FOR SOURCING PROFESSIONALS AND INNOVATION MANAGERS

Per a 2020 report by First Insight, 73% of the Gen Z consumers they surveyed reported that they’d pay more for sustainable products. With trends like this only increasing, many businesses are trying to achieve sustainability goals themselves or are evaluating potential partners and suppliers through a sustainable lens.

But not all “green” companies are actually green, and not all sustainability claims are legitimate. In other words, greenwashing is on the rise.

In this guide, we’ll explore what greenwashing is, how to spot it when you’re looking at suppliers or partners, and how to avoid working with companies that greenwash in their marketing efforts.

That way, when you are evaluating suppliers or packaging materials, you can have confidence knowing that your claims and those of your supplier are certified and true. Let’s dive in.

WHAT IS GREENWASHING?

“Greenwashing” is when a company makes environmental claims that are untrue or misleading for sales, marketing and PR purposes. For example, companies may describe their products as “organic” or “green” without having any certifications to back up these claims.

EXAMPLES OF GREENWASHING

Most often, greenwashing occurs in the form of word choice. In order to appeal to eco-conscious consumers and perform well in web searches, companies that greenwash will use phrases that imply sustainability even though their products aren’t sustainable – or aren’t to the degree that they assert.

Words to Watch Out for

Here are some phrases to be wary of that can indicate when a company is greenwashing:

“All natural.”
“Chemical-free.”
“Clean.”
“Earth-friendly.”
“Eco-friendly.”
“Free of… [insert substance].”
“Natural products.”
“Non-toxic.”

These words sound good at first, but you’ll discover that many companies who describe their products or solutions using these terms don’t have proof to verify what they state.

What’s more, some of the terms—especially “all natural” and “clean”—are vague enough to seem authentic without actually meaning anything concrete. There are no certifications or criteria that show that a product is “all natural” or “clean.”

For more advice on spotting potential greenwashing—as well as news about companies accused of it—check out the U.S. Federal Trade Commission (FTC) Green Guides.

RECENT GREENWASHING TRENDS IN PRODUCT MARKETING

Besides including word choices like the ones listed in the previous section, we’ve seen other trends in the past few years that are worth paying attention to. Some include:

Personal Care Organizations Claiming Their Products Are “Vegan” or “100% Organic” When They’re Not

In 2019, the FTC filed a complaint against an American retailer which advertised their beauty and bath products as being “100% organic” and “certified organic” even though their products were not certified as organic by the U.S. Department of Agriculture (USDA). Unfortunately, this is not the only company doing this nowadays.

Retailers Including Misleading Sustainable Buzzwords Like “Organic” and “Clean” in Their Names

Companies that greenwash don’t just use misleading phrases when describing their products on their packaging. They also use these words in their brand names themselves.

Companies Not Providing Sufficient or Easily-Accessible Information to Back Their Green Claims

Every year, the European Commission conducts a “sweep” where they screen websites to uncover potential breaches. In 2021, they focused on greenwashing for the first time, and their results were startling. Almost half (42%) of the 344 websites screened that claimed to be sustainable could be classified as greenwashing.

In more than 50% of the screened websites, the company didn’t offer enough information to validate their green claims. Also, 59% of the websites didn’t provide information that was easy to access.

NEGATIVE EFFECTS OF GREENWASHING ON YOUR COMPANY: WHY YOU SHOULD CARE ABOUT IT

What happens if your organization inadvertently commits greenwashing or partners with a company that claims to be sustainable, only to learn it isn’t?

Research shows that it can hurt your brand reputation – and, in turn, hurt your bottom line.

For example, according to a 2019 study entitled “Different Shades of Greenwashing: Consumers’ Reactions to Environmental Lies, Half-Lies, and Organizations Taking Credit for Following Legal Obligations” by Menno D. T. de Jong, Gabriel Huluba, and Ardion D. Beldad, telling lies and telling half-lies about green claims—and then getting caught—negatively affects a company’s corporate reputation.

Moreover, per the 2020 Edelman Trust Barometer Special Report, brand trust ranked as the #2 reason why a consumer would decide to buy from a brand—just behind price and affordability. Also, 70% of respondents reported that trusting a brand is more important today than in the past.

So, imagine what happens when you lose trust with your consumers in an environment like today, where brand trust is more important than ever. You don’t just lose trust—you lose business.

HOW TO AVOID GREENWASHING WHEN EXAMINING SUSTAINABLE MATERIALS AND SUPPLIERS

As we’ve shown, greenwashing is running rampant across the world. But how do you spot organizations that greenwash so you can consider if it makes sense to do business with them?

Follow these tips to evaluate future suppliers and partners, identify ones that are truly sustainable, and protect your brand reputation.

Be Suspicious of Any Company With Vague Green Claims

Remember those phrases we mentioned before that companies use to fool consumers and companies alike? If a company describes their products as, say, “all-natural,” “eco-friendly,” or “chemical-free” without listing or offering any information to substantiate these claims, be on your guard.

Look for Specific Certifications From Creditable, Third-Party Organizations

A good rule of thumb is to look for companies that not only provide specific claims about their products, but also corroborate their claims with tests and certifications from reputable, third-party organizations.

Here are some examples of key green certifications to look for per product type.

Food & Beverage Certifications

Certified Animal Welfare Approved by AGW
Certified Humane: Humane Farm Animal Care
Certified Vegan: Vegan Action/Vegan Awareness Foundation
Demeter Biodynamic Certification
Organic: USDA
PETA-Approved Vegan
Rainforest Alliance Certification

Health & Beauty Certifications

Certified Vegan: Vegan Action/Vegan Awareness Foundation
COSMetic Organic and Natural Standard: COSMOS
Eco-Efficiency: BASF
Natural Detergents: Ecocert Natural Cleaning Products Standard
Organic: USDA
PETA-Approved Vegan

Packaging Certifications

Absence of Lead and Phthalates: Consumer Products Safety Improvement Act (CPSIA) Compliance
Biodegradability: ASTM D6868 and OECD-301B
Chain-of-Custody Certification: FSC
Compostable: ATSM D6868-11
Degree of Disintegration of Packaging Materials: ISO 2020:2015
Ecotoxicity: OECD Guide 208

Nina Goodrich, the executive director of GreenBlue and the Sustainable Packaging Coalition (SPC), offers some additional advice about packaging-specific certifications that demonstrate sustainability.

“It really does come down to knowing where the fiber for your [paper] packaging comes from. Credible certification bodies such as the Forest Stewardship Council (FSC), Sustainable Forestry Initiative (SFI), and the Programme for the Endorsement for Forest Certification are excellent. These organizations have standards that certify Forest Management and Chain of Custody so a company evaluating suppliers can be confident the fiber for their packaging was sourced responsibly.”

— Nina Goodrich, Executive Director of GreenBlue and the Sustainalbe Packaging Coalition (SPC)

“The challenge, however, is that only 10% of the world’s forests are certified,” she continued. “So if certified fiber is unavailable, it’s important to ask suppliers the right questions. The American Forest Foundation (AFF) has a standard for small landowners in the United States called the American Tree Farm System. And, recently, GreenBlue developed a tool in partnership with AFF called Forests in Focus that takes a landscape-based approach to assess risk and provide information for responsible sourcing.”

Goodrich suggests requesting certifications from to BPI and CMA for compostable packaging. “BPI (Biodegradable Products Institute) is a North American certifier of compostable packaging using third-party standards and testing to determine compostability of products,” she says. “CMA (Compost Manufacturing Alliance) provides field disintegration testing and certification of compostable products that meet conditions at composting facilities.”

Finally, if evaluating plastic-certified recycled content, she advises that you look for the launch of the SCP’s Recycled Material Standard in November. This certification is a chain of custody certification designed to cover both mechanically recycled plastic and chemically recycled plastic.

3) Ask for Material/Product Data Sheets

Valentina Milanova, the founder and CEO of Daye, a female health and research development company in the UK, suggests that you go one step further than asking for proof of sustainability claims by requesting product data sheets. This is a best practice she and her team at Daye have followed to find suppliers to work with that share their same commitment to sustainability.

“We ask that [potential suppliers] provide relevant documentation for us to inspect. We also ask for any extensive validation. We never just hop in and start working with an organization. We’re constantly researching materials for our tampon applicators – with a focus on water-soluble, biodegradable materials – because we want to minimize period waste, which is quite a significant issue.”

— Valentina Milanova, Founder and CEO, Daye

4) If Sourcing Overseas, Connect With Relevant Environmental NGOS (ENGOs)

Goodrich advises that you get in touch with applicable ENGOs if you’re doing business with a supplier overseas, especially those that are involved in sustainable measures of the particular product or service you’re evaluating. Since there are so many standards—some of which are specific to the country in which the product is designed or produced—touching base with ENGOs can help you understand local regulations and certifications. They may also be able to refer you to vetted companies.

OTHER WAYS TO PURSUE SUSTAINABILITY

Avoiding greenwashing and choosing to work with organizations that can validate their sustainable claims aren’t the only ways to make your company greener. Gain more market share and appeal to the consumers of today and tomorrow by following some of the suggestions listed on our blog below.

siteadmin_IBT