What is 'Greenwashing'?: Craig Needles Podcast

“As a consumer, you try to do the right thing, and then you find out later that you’ve kind of been tricked.” 

In an interview with the Craig Needles podcast, Wren Montgomery, associate professor of sustainability at the Ivey Business School, discusses why greenwashing is frustrating for both consumers and companies trying to do the right thing.

Wren and Craig spoke after the launch of Greenwashing 3.0: Why addressing greenwashing remains as important as ever, a report from the Ivey Business School’s Centre for Building Sustainable Value and the University of Michigan’s Erb Institute.

What is Greenwashing?

Wren explained to listeners that greenwashing is “communication that misleads people into adopting overly positive beliefs about an organization’s environmental performance, practices, or products” (Lyon, Montgomery). She notes that rather than “walking the talk” like consumers hope to see, companies who greenwash are “doing more talking than walking.”

A classic example of greenwashing is fossil fuel giant BP renaming themselves ‘Beyond Petroleum’ (formerly British Petroleum) and coming out with green advertising while keeping their renewable energy portfolio incredibly small.

Wren notes that “sometimes we even find companies spending more on the advertising campaign to tell us how green they are than they actually spend on their ‘green’ products or projects.”

What problems does greenwashing cause, other than the obvious negative environmental effects?

Greenwashing causes frustration and trouble for two main groups, says Wren:

1.     Caring consumers

Consumers who want to “put their money where their values are” are left frustrated and confused by greenwashing. Montgomery notes that many companies will add images of trees, bees, and other symbols on their tags to signal a ‘green’ product. But when consumers look closer at the tag or box, “sometimes there’s no way to find more information, and no way of knowing what they actually do.”

2.     Genuine brands

Positioning herself in the shoes of a genuinely sustainable companies, Wren explains that “if I’m a company that’s spending a lot of money on trying to do the right thing, and I change my operations, and I have a competitor that’s just saying they’re [changing their operations] but hasn’t actually put any time, effort, and resources into it, then that’s a huge impact.”

Large companies with impressive marketing budgets also divert attention away from those making genuine progress – just check out this advertisement from Apple. Wren notes that Apple is doing good things with its carbon-neutral Apple Watch, which it highlights in this video. Still, it’s avoiding discussing the rest of its product line, exemplifying ‘inconsistent organizational practice,’ one of the most common forms of greenwashing, as noted in the report.

Wren hopes to work with genuine companies to push for more legislation so that “the companies that are actually doing the hard work can benefit from that.”

What’s the state of greenwashing legislation?

Craig and Wren also discussed what the legal landscape looks like for greenwashing. According to Montgomery, “In many places we have laws coming down the pipeline that are going to tighten up what is possible.” “In Canada, we’re seeing more and more activist groups bringing companies up before the Competition Bureau.” Companies that have faced the Bureau include Keurig and the Royal Bank of Canada. Keurig was fined for stating that their K-Cup pods were recyclable in Canada when this was only the case in British Columbia and Quebec.

As companies adapt to increasing legislation, which is coming especially quickly in Europe, Wren believes we’ll see finance and operations departments far more involved in deciding what claims marketing departments are putting out. “For a long time, the marketing department was left on its own to do this,” but “companies that are dividing the sustainability function across aspects of the organization are going to be in trouble,” says Wren. Now, companies will need to ensure they can back claims up.

Listen to the podcast to hear more about the emergence of ‘greenhushing’ and ‘futurewashing’ in response to increased scrutiny and legislation.