What is Greenwashing? A Guide to Understanding It and Not Getting Duped

What is “Greenwashing”?

When it comes to a simple, no-B.S. greenwashing definition, we like the UN’s one best. They describe greenwashing as:

“misleading the public to believe that a company or entity is doing more to protect the environment than it is”.

In other words, it’s an issue of false or misleading advertising in which companies make their products seem more sustainable than they are.

Why Does It Happen?

The practice of greenwashing usually comes down to 2 main issues:

1. Companies want to capitalize on the growing popularity of sustainability as a selling point. Market research has shown that consumers are not only willing to pay more for something if they think it’s sustainable, but that brands that focus on this are growing faster than the ones that don’t. That’s led to many fantastic innovations that benefit our planet but unfortunately, it also gives companies an incentive to put on a green face for the sake of hitting sales targets.‍
2. Labels like “sustainable”, “natural”, and “eco-friendly” aren’t legally protected which means that companies can use them with relatively little accountability. As we’ll get to later on in this article though, some of that is changing and many organizations are pushing to give consumers more clarity regarding claims like these.

What Does Greenwashing Look Like?

Common greenwashing examples include:

• Claiming to have certain goals regarding emissions or plastic use without any actual plan in place or tracking system.
• Being purposefully vague about the making or materials of a product, especially in terms of sourcing and factory conditions. True sustainability requires clarity and traceability.
• Using labels like “green” or “planet-friendly” which don’t have clear definitions and thus can be misleading, and then not being forthright about why these labels apply.
• Advertising one eco-friendly element to the point that it overshadows other harmful practices involved. For example, a chocolate bar that highlights its compostable packaging but also uses ill-sourced palm oil.
• Another version of this is when big brands known for damaging practices highlight the sustainability of a product as if it isn’t still made under the same conditions that they got their bad reputations from in the first place. A t-shirt made from recycled cotton isn’t better than one that isn’t if they’re both still made in the same sweat factory.
• Claiming an item is “free” of something that would never have been used in it in the first place.

The History of Greenwashing and More on Why Companies Do It

The term “greenwashing” originates in a 1986 term paper from then-student, Jay Westerveld discussing how a Fiji resort he’d visited had asked guests to reuse their towels to “help the environment” when in fact it was a cost-saving measure from a company showing little care otherwise. That’s by no means when greenwashing first began, however.

Companies have been trying to cover up their true environmental impact since at least the 1960s. As long as power and oil companies have faced critique, so they’ve attempted to brush past it with large displays of greenwashing. We’ve mentioned that sales are a big incentive for companies to employ greenwashing practices and while sometimes that’s about making something more sustainable so that you buy it, it’s also about finessing reputations so that you don’t stop.

Big companies like Shell and BP have faced huge backlash in recent years for environmentally hazardous practices. Their P.R. approach? It’s largely about redirecting the public’s attention to new “green” measures they’re taking. Greenwashing isn’t just used as a sales pitch but as a distraction. That’s why it’s so dangerous for both the planet and us.

How Does It Affect Us?

At its most basic level, greenwashing means that we are often sold products or services under false pretenses. But what’s the effect of this on us as consumers? Let’s take a closer look:

• Your money goes toward practices you’d otherwise prefer not to support. Though systems are slow to change, we can all make a difference by being more mindful of how we spend our dollars. Greenwashing, however, undermines that power.‍
• Greenwashing takes away from the businesses that are trying to make a real difference. There are far too many products and companies where, if consumers had known the truth, they would have been able to take their money and use it to support true eco-businesses instead. ‍
• Consumers are left more confused than ever. Each time another big brand is exposed for greenwashing, it leaves all of us feeling dejected about the pursuit of shopping more sustainably. That kind of disappointment might not seem like a big deal, but it can lead to consumer fatigue and make people feel like it’s not even worth trying anymore. But we can’t let that happen. We can’t let greenwashing take away from how important and impactful it is to support businesses that are trying to make a difference in the world. We just need to get smarter about how we look at things and make sure greenwashers are held accountable.

How Does It Affect the Environment?

Many assume that corporate greenwashing is a passive evil when in fact, it’s having a direct, impact on the environment and the initiatives trying to protect it:

• It places yet another obstacle in front of those trying to address climate change. Misinformation and greenwashed advertising not only mislead consumers to support things they probably wouldn’t otherwise, but they also make it harder for credible initiatives to stand out.‍
• It distracts attention from major ecological issues. We’ve seen enough examples of greenwashing over the last few decades to know that big corporations will often use the practice to cover up their environmental mistakes. This in turn lessens public sensitivity to things like oil spills and allows the businesses behind them to evade accountability more easily.‍
• Greenwashing provides a false sense of security. This is perhaps one of the scariest impacts of greenwashing in that it can give us the impression that more is being done for the environment than actually is. This brings down people’s sense of urgency around the climate crisis and ultimately means less is done to fix the problem.‍
• False solutions for environmental issues are promoted, while the real ones suffer.  To truly take care of our planet, we have to get real about what actually works and unfortunately, greenwashing makes that harder to see than ever. 

5 Industries That Are the Biggest Culprits of Greenwashing?

Greenwashing can happen in any industry, but here are 5 of the biggest culprits and some easy ways to spot them:

1. Fast Fashion

We’ve seen enough fast fashion brands embroiled in greenwashing scandals to know one thing for sure: sustainability and fast fashion rarely go together. Brands may highlight the use of things like recycled fabrics and eco-friendly dyes, but most still use extremely unsustainable sourcing and manufacturing practices.

We’ve also seen plenty of greenwashing examples where brands have over-inflated their sustainability claims. Words like “conscious”, “sustainable”, and “planet-friendly” appear frequently on labels without any true meaning or accountability behind them. 

What to look out for: Brands with terrible eco-histories suddenly dropping a “green” clothing line. Look into how much traceability they’re offering with the new garments and see if, beyond a few fabric tweaks, anything significant has changed. Also look to see if the brand is using a third party to verify any of their environmental claims, and the reliability of that certification system.

2. Finance and Investment

What does greenwashing mean in sustainable investing? Banks and other financial institutions are some of the most dangerous greenwashers because of how much economic power they hold.

A handful of these institutions control some of the largest shares of wealth in the world and so, when they make big claims about supporting things like zero-emission targets and more green investment opportunities, we want to believe them. The problem is that it’s mostly been little more than empty promises and worse off, has distracted the public from the increasing investment that fossil fuel industries have seen from these very same financial institutions.

What to look out for: Look at a financial institution’s full portfolio and see if you can find online what percentage they give to oil and gas companies. That will show the full scope of their impact, beyond the flashy “green investment” magazine spreads.

3. Food and Drink Companies

Corporate greenwashing is never more prevalent than when we look at big food and drink companies. As major brands have received backlash over things like their use of plastic bottles and their part in global pollution crises, instead of actually fixing things, they’ve often washed over it with a green-hued advertising campaign.

One drinks company created a “strawless lid” that they claimed would cut down on plastic use, only for it to come out that the new lid used more plastic than the previous iterations (with the straw included). That’s an almost textbook example of greenwashing.

What to look out for: Stats and accountability. If a drinks company says they’re cutting back on carbon emissions, check how specific the language is.

4. Furniture and Home Goods

While furniture and home goods companies will often claim to use sustainably sourced wood and other materials, the regulatory bodies they’re linked to, like the Forest Stewardship Council, have been exposed for greenwashing. Illegal logging and destructive timber practices have managed to fly under the radar for exactly this reason.

What to look out for: Third-party regulations and the reputations they hold. Green certifications can be great, but only if they come from trusted sources.

5. Cars

The increase in climate awareness campaigns in recent years has rightfully pushed big car companies to create more low-emission, environmentally friendly options. What’s scary is how it’s been to evade and falsify emission test results with one of the most popular car brands eventually being caught cheating the tests with faulty equipment.

What to look out for: Check to see what the car company is using to verify their carbon emissions tests and if anyone else has been able to check this information.

The Federal Trade Commission’s Part Against Greenwashing

It’s pretty depressing to read just how much corporate greed is ruining the landscape of sustainability but for every corporate greenwashing machine, there’s an organization or person trying to fight the problem. One of those is the FTC. They’ve made a concerted effort to combat greenwashing with their green guides. First released in 1992, these guides were most recently updated in 2012 and are for both marketers and consumers alike.

They outline general principles regarding environmental marketing, how they’re likely to be interpreted by consumers, and how marketers can better qualify these claims so that consumers aren’t deceived. Their most recent initiative has been about energy labels on home appliances. The FTC extended a call for public input that only closed in April 2024 on how best to tackle the issue so that consumers know exactly how much energy their appliances are likely to use.

How To Avoid Supporting Greenwashing

The simplest way to avoid greenwashing is to do your research, whenever possible. Look up a business before buying from it and check if any news stories abound about recent environmental issues, etc. An informed consumer is corporate greenwashing’s worst nightmare. It’s much harder to fall for splashy greenwashed advertising campaigns when you know the true story behind a brand.

Go easy on yourself though. Millions of dollars are being funneled into greenwashing products so don’t beat yourself up if you miss a step. The fact that you’re here, reading this article, already shows you’re paying attention.

A Simple Guide to Not Buying into Greenwashing

Here are some of greenwashing’s biggest red flags:

• Vague language or claims. Using sustainability buzz terms without qualifying how they apply to a product usually means it’s more of a marketing move than it is an eco-friendly one.‍
• A flashy eco-campaign after a P.R. disaster. This is often a sure sign that a brand is trying to do a cover-up rather than being truly committed to environmentalism.‍
• Green or “nature-inspired” packaging with no substance. Seeing a lot of mountains and lakes on the packaging but it’s all plastic? That’s greenwashing at its finest.‍
• A lack of transparency. This is probably the biggest factor when it comes to spotting greenwashing in action. Brands that set big eco goals but don’t share their plan for reaching them, or how they’ll be tracked, are disappointingly common. 

Don’t Let It Get You Down

While it’s important to approach the world of sustainable products with some healthy skepticism, it’s worth noting that greenwashing hasn’t taken over just yet. There are plenty of brands pushing for greater transparency and making sure that “eco-friendly” is more than a marketing buzzword. It’s unfortunate that consumers have to be so vigilant but it’s exciting to see how much more frequently greenwashing is being called out, and how much smarter we’re all being about spotting it.