Think about the last time you purchased a “green product”.
Was it a hybrid car, a jacket from Patagonia, a pair of Tom’s shoes?
You probably chose the item in part because you care about the environment, and wanted to pick a product that aligned with those values. But this introduces a complex question—since advertisers and companies know that “greenness” is a selling point, how can we, as consumers, understand which purchases are actually environmentally sound?
First, let’s examine the incentive for companies to present as green. More than half of consumers will pay more for products designed with recyclability in mind. Over seventy percent of consumers said they’re currently buying more environmentally friendly products than they were five years ago. And a third of consumers say they actively choose to buy only environmentally friendly products.
Green consumerism can also manifest itself in unexpected ways. Because being environmentally conscious is often seen as a positive social signal, consumers will actually pay premiums for products which “demonstrate” one’s environmentalism to others. A famous study examined this effect in the electric vehicle market, concluding that, after controlling for other factors, consumers will pay between $420 and $4000 more for hybrids that have a recognizable shape (and therefore are identifiable).
Environmental, Social, and Governance (ESG) requirements also speak towards a need for more environmentally conscious consumption. Essentially, these requirements dictate that certain companies, investment corporations, or foundations must invest or support those doing some form of good for the world. For example, a company finding a way to sustainably grow food might be considered “viable” for ESG investing. As you can see below, there has been accelerating growth in this field:
Because there’s both consumer demand for green products, and mandated investment in green companies, it’s easy to see why so many companies are positioning themselves as green.
Relatedly, there’s been a huge influx of articles describing companies that are “going green”. For instance, this recent post discusses seventeen companies like McDonald’s, Dell, and Tesla that are purportedly becoming more environmentally friendly.
But how often is this just a farce? Let’s look to Tesla as an example. The company’s website proudly proclaims that Tesla vehicles have saved a remarkable amount of carbon dioxide:
But, mathematically, the company’s recent purchase of Bitcoin actually more than nullified any positive effect their cars have had! That’s because Bitcoin is extremely energy intensive to mine. However, many probably haven’t realized this—I certainly hadn’t, until I was told about it by a friend. And therein lies the problem: the image companies present is often vastly different than what’s going on behind the scenes.
This effect is known as “greenwashing”—the deliberate use of PR, branding, and marketing to portray a company as environmentally friendly when, in reality, that might be far from the case.
Unfortunately, the trend is as old as environmentalism itself. In this well-known commercial from 1997, Chevron positions itself as ecologically conscious, even going so far as to build watering holes for desert animals! Or consider BP’s logo changes:
The new logo resembles a flower, or a sun, and is deliberately made to create an association between “greenness” and…a petroleum company responsible for one of the worst man-made disasters in history. Furthering the contradiction, BP is also responsible for 1.5% of global carbon emissions since 1988.
The incentive for brands to present as green, coupled with the power of branding, has led to a huge increase in greenwashing over the past decade. This is far from mere deceptive advertising. Unfortunately, greenwashing has several distinct and highly pernicious effects. Let’s delve into several of the issues.
First, it’s inherently deceptive. Few people take issue with ads from companies that are being honest. But, when a BP presents itself as green, it’s effectively lying. Imagine a car company saying that a car gets 50 miles to the gallon, when it really only gets 25. Environmentally, this is what companies practicing greenwashing are doing.
Relatedly, these practices may often be illegal. In 2011, for instance, the California Attorney General brought a lawsuit against three companies marketing their plastic bottles as 100% biodegradable—which they proved not to be. In similar case, Kauai Coffee was the subject of a class action lawsuit for claiming that their coffee pods were compostable. But the most well-known example of illegal greenwashing might be the VW emissions scandal. In this instance, the automaker used rigged devices to get around tightening emissions standards. Famously, the scandal lasted for over 40 years.
Greenwashing is also problematic in the obvious sense that it gives companies an alternative to making actual progress. When a company can achieve the brand benefits of greenness without any of the potential “costs” (for instance, implementing anti-pollution technologies), they may choose to do so. This issue is exemplified by the fact that companies often have an aversion towards long-term thinking. For instance, companies like Exxon could actually benefit from substantially increasing investment in clean energy, so as not to fall behind long-term. But when greenwashing provides an easy way to fall into short-termism, many companies will take the bait.
Greenwashing is also harmful in that it leaves us unable to understand how problematic certain issues are. Several studies claim that, if anything, we are underestimating many environmental issues, like climate change. But it’s hard to know what’s true when we are actively lied to. Considering that we now see over 5,000 commercials every day, it’s likely that we are subject to some form of greenwashing daily.
Finally, greenwashing robs us of our ability to be informed consumers. Many of us—as discussed earlier—actively want to support companies which are environmentally friendly. Alternatively, we may want to buy products that are environmentally friendly not because we care about the company behind them, but because we want to minimize our environmental impact.
It might seem impossible to avoid being conned or deceived. After all, consumers don’t always have the time, resources, or energy to parse what’s real and what’s misinformation. Fortunately though, there are ways to determine how green companies really are.
Research is often the best way to determine which companies are truly green. Of course, it’s probably not feasible to conduct extensive research for every purchase. But for sizable purchases, or purchases for which you’re likely to do research anyway—appliances, vehicles, shoes—it’s useful to poke around. By simply searching a company’s name and “environmental issues,” or “environmental lawsuits,” it’s possible to uncover quite a bit you might not know about. Since I’m using a Macintosh laptop, I tried this with “Apple” and easily found some interesting results examining Apple’s true impact. One particularly intriguing point of note is the fact that Apple deliberately designs its products to be difficult to repair or upgrade—resulting in a lot of waste. While many people “know” this to be true, it took a bit of research for me to recognize it as an environmental negative.
If the above sounds difficult or time-consuming, don’t worry! There are websites which provide useful rating systems that indicate how green companies really are. For instance, Green Seal provides services where you can research green local businesses. CSR Hub is another example of such a service that includes a searchable database of company rankings. Of course, it’s also worth investigating whatever organization is providing a ratings service—it’s possible that they have ulterior motives too! Whenever possible, try and find ratings companies which are non-profits.
Similarly, you can see whether companies have earned any environmental awards or accolades. Some accolades, like LEED certification, are held in quite high regard and serve as a good referendum on sustainability. The U.S. Government and Department of Energy also have several awards which acknowledge “energy, water, waste and fleet management, as well as achievements in projects representing exemplary sustainability practices.” Generally, when the award-giver is reputable or impartial, sustainability awards can be quite meaningful.
Another useful strategy is to dig into companies’ corporate structures. Even if one brand seems green, it’s possible that it’s really just part of a far less commendable organization. Consider this well-known image:
Clearly, given the complexity of corporate structures, brands may not always be what they seem. However, simply googling “who owns” a certain company will usually come up with the true ownership structure quite effectively.
Finally, there are exciting apps and services which help consumers make greener decisions. These apps are often called “ethical consumption” apps, and can be found by googling that term. For instance, Giki is an ethical consumption app which allows you to scan grocery store items in order to see how “green” they really are. ShopEthical! is another great example.
If all of this feels a bit overwhelming, don’t worry. There’s certainly no requirement to conduct extensive research on every purchase. But, particularly for major purchases, why not poke around? And, once you see how easy it is to determine whether a product is truly environmentally friendly—or if you’re being greenwashed—this might become a habit.
Given that corporations are extremely environmentally impactful—for good or bad—the importance of fighting greenwashing and consuming consciously cannot be overstated. Try taking a small step this week to engage more with this aspect of environmentalism!
Of course, this is just one of many ways to help the environment. Another is through using Temboo, the only no-code platform for environmental engagement, to learn more about your local environment. Feel free to reach out; we’d love to chat!