What Is Greenwashing and Why Does It Matter?

Eco-friendly business practices and sustainability have quickly become the business norm across sectors over the last few years. Reductions in the emissions and pollution companies generate will be a critical component in addressing climate change.

The Environmental, Social, and Corporate Governance (ESG) guidelines has introduced a set of standards for a company's behaviour. This includes their impact on the environment across all aspects of the business.

While many businesses are promoting their efforts to combat climate change, not all claims are legitimate. This article will explore the phenomenon of ‘greenwashing’, why it matters and how to avoid it.

What is greenwashing

Greenwashing is a catch-all term that began as a way to refer to misrepresentations, deceptions and even lies that companies make about their eco-friendly or sustainability efforts. This might include the justification for their behaviour, labelling products or services as green without that reflecting genuine sustainable offers or making misleading claims, for example about recycled materials or CO2 emissions.

Greenwashing today typically refers to efforts by high profile businesses to create a favourable image of themselves as green, using advertising and marketing. However, while the company may use imagery or slogans that suggest a commitment to combatting climate change, or investing in renewable energy, in reality they have not meaningfully adapted their business operations or policies.

By dressing up their business in the language of environmental consciousness, it creates a false impression that can be convincing for many casual observers.

Why does greenwashing matter?

Greenwashing presents several problems. Firstly, it is unethical. When companies are exposed for greenwashing – and there have been many high profile examples – it undermines public confidence in business leaders and even trust in that sector.

The second issue is that greenwashing presents a serious problem for both consumers and businesses that want to make sustainable choices. Having to research companies’ genuine ‘green’ credentials is time consuming and can be difficult when companies are not clear about the tangible eco-friendly commitments they have made.

Many consumer surveys find that people are willing to spend more on sustainable products. Equally, most businesses are themselves reliant on other suppliers to operate. Therefore, a business that is looking to reduce its carbon footprint may want to ensure that the companies that it buys from are also committed to the same environmental goals. However, greenwashing can obscure whether a business has made a genuine commitment to becoming more sustainable.

What are the signs of greenwashing?

Once you are aware of greenwashing it does become easier to spot. The hallmarks are the use of buzzwords – sustainable, eco-friendly, green etc. – but without any tangible commitment. A company that is genuinely committed to reducing its environmental impact will have made a plan about how to do so. They will likely share their green or sustainable goals publicly, so they can be held to account by their customers.

To use energy tariffs as an example, many energy suppliers now offer a ‘green’ tariff. However, some energy providers publish their commitment to investment in renewable energy sources, like wind and solar. Others, while claiming to offer green tariffs, are not open about the fuel mix they offer to customers or even attempt to conceal continued reliance on fossil fuel energy sources.

How can you avoid greenwashing companies?

As a conscientious consumer, there are several ways to avoid greenwashing companies and brands. Firstly – be sceptical about marketing and branding. If something sounds vague, or a little too good to be true – it probably is. Many businesses spend a lot of money on communications and advertising materials that are designed to present even very polluting companies in a very positive light, using images of trees, wildlife and other ways to convey an image of clean and serene products or services.

Look for companies that are transparent and open about what they do, and provide facts and figures. Don’t assume that a general claim, such as “we are committed to green energy” actually commits that company or organisation to something. Look for statements that include a target or aspiration that is measurable and could be verified.

Third-party certification or endorsements are also a good way to check the veracity of green claims.

Making the Switch to a Renewable Energy Tariff

If your business is looking to switch to a new Energy supplier, Neom Utilities can help. We can help you identify an energy provider with genuine green energy credentials and explain the different tariffs and which will be most suitable for your company’s energy needs.

Most energy sources associated with a renewable energy tariff will include solar, wind, geothermal, and hydro-energy.

At Neom Utilities, we work with a panel of trusted energy suppliers offering renewable energy options. You can find out more with our green energy tariffs guide.