Despite the current economic crunch, green products and services remain popular among consumers. The profits of Panasonic’s sustainable products rose from 10% in 2013 to 22% in 2014. A June 2014 Nielsen study revealed that 55% of online consumers were willing to pay more for products and services produced by sustainable companies. The study added that 52% of online consumers made at least one purchase from a socially responsible company in the past six months.
The ongoing popularity of green products and services has inevitably led to greenwashing. In order to be more appealing and earn more, companies advertise their goods and services as “green” even if they really aren’t. Therefore, consumers must be aware of the various signs of greenwashing so that they can avoid being deceived and companies employing these practices may be discouraged from continuing to mislead their customers.
Below are some examples of greenwashing:
Totally Unsubstantiated Claims
A company may claim that its products and services are sustainable despite the absence of third-party certification. For instance, a manufacturer may put the label “90% post-consumer recycled content” on its tissue products without showing proof that supports the claim. There are several reputable third-party certifying bodies that can verify if a product is truly sustainable. If a consumer doesn’t see the logo of a certifying body on a product, then they should think twice before buying it.
The practice is prevalent even in popular brands, so brands that make the effort to have their claims validated by major certifying agencies such as Green Seal, EcoLogo or the Environmental Protection Agency’s (EPA) Design for the Environment (DfA) should be commended. When a company like Aveeno claims that the sole ingredient of its Soothing Bath Treatment is 100% pure colloidal oatmeal, a substance that effectively relieves skin irritations, consumers can have confidence in that claim because Aveeno’s Soothing Bath Treatment is a recipient of the Green Good Housekeeping Seal.
Some companies label their products and services as environmentally-friendly based on a small set of attributes, while disregarding other attributes that may have negative environmental or health impacts. For example, a cosmetics company may produce a shampoo that has been independently verified to have not utilized animal testing procedures. However, the company may choose to be silent on the fact that their product contains chemicals and synthetic fragrances that can cause hair loss and allergies.
Manufacturers market non-applicator tampons as sustainable alternatives to regular tampons—non-applicator tampons are said to eliminate one pound of waste per woman every year. What consumers may not know is that some non-applicator tampons are made of cotton treated with herbicides, insecticides, fertilizers, fungicides and other chemicals that cause cancer, birth defects and wildlife toxicity. While reducing one pound of waste per woman every year is good, chemical-free cotton would have made a more significant impact on non-applicator tampons’ eco-friendliness as a whole.
For instance, Bodywise (UK) Limited’s Natracare feminine hygiene products line is safe for both human health and the environment. Natracare tampons —both with and without applicators—are made of 100% organic cotton and are free of chlorine, rayon, plastics and dyes. They are also biodegradable and compostable. In addition, Natracare is the recipient of the following awards and certifications: Triodos Bank’s Women in Ethical Business Award (WEBA), The Ethical Company Organisation’s Ethical Award, Soil Association’s Organic Certification and the Vegetarian Society Approved trademark.
Smoke and Mirrors
There are companies that either adopt sustainable practices or exaggerate their sustainability in order to hide the fact that their businesses are unsustainable by nature. For example, organic cigarettes and Hybrid SUVs create the illusion of being “greener.” This doesn’t actually change the fact that they have negative impacts to human health and the environment.
The "smoke and mirrors" greenwashing technique is very prevalent in the hotel industry. In his article Consumers See through Hotels' Cynical Greenwashing Attempts (2015), Charlie Sorrel cautioned readers that a hotel is most likely guilty of greenwashing if its sustainable practices are tied to its financial interests. "If a notice on the bathroom wall exhorting guests to 'save the planet' is the only sign of an environmental policy, it's no surprise that we would assume the hotel is just trying to save on laundry bills," he wrote. Sorrel also advised to check if the hotel has consistent sustainability standards. He told readers: "Next time you obey the sign in your hotel bathroom telling you to hang up the towel instead of tossing it on the floor to be washed after a single use, take a look around you. Is the bathroom stacked with single-use plastic shampoo bottles, with no place to recycle them? Is there a bottled-water vending machine in the lobby instead of a water fountain? If so, the hotel might be guilty of greenwashing."
A product or service may be genuinely green. The problem, however, is that its greenness doesn't distinguish it in any meaningful way. Hence, the greenness of that particular product or service isn’t really helpful to consumers searching for
environmentally-friendly products and services.
Many household cleaning sprays claim to be CFC-free. But CFCs are banned by law. Thus, their greenness isn’t really significant―their manufacturers are merely following the law. Moreover, this greenwashing might even distract consumers from finding genuinely green alternatives.
Due to lax government oversight, some companies are able to attach legitimate sustainability certifications on poorly-tested products. This greenwashing method is extremely dangerous for two reasons. First, the success of poorly-tested products with sustainability certifications that appear to be legitimate can encourage unscrupulous manufacturers to continue unsustainable business operations. Second, the credibility of the third-party certifying body might be damaged as consumers might think that it is lenient in handing out certifications.
In 2012, Apple’s Retina MacBook Pro was verified Gold by the EPEAT (Electronic Product Environmental Assessment Tool) standard. Critics described it as “the least repairable [and] least recyclable computer.” Replacing the LCD means buying an expensive display assembly, as the display and the glass are fused together. It is likewise impossible to upgrade the laptop’s memory―the RAM is soldered to the logic board. Customers who wish to have their Retina MacBook Pro’s battery replaced will have to send their unit to Apple for a USD200 replacement because the battery is glued to the case. And while the Retina MacBook Pro’s design is made of “highly recyclable aluminum and glass,” the glass is glued to the aluminum, rendering recycling impossible. These specifications made the Retina MacBook Pro not only expensive to maintain, but unsustainable as well.
But by 2014, Apple started showing it was serious about improving the sustainability of its products. All Apple Retail Stores across the globe started accepting discarded Apple products from consumers for the purpose of recycling. In addition, Apple removed beryllium from the designs of the iPhone 6, iPhone 6 Plus and iPad Air 2. These steps helped restore Apple’s credibility as a sustainable company.
The 2015 Volkswagen Group Emissions Scandal: A Cautionary Tale
The 2015 Volkswagen emissions scandal is a good example of how greenwashing can significantly impact even one of the most stable, reputable companies. Volkswagen is one of the most popular and successful car manufacturers in the world, but because of greenwashing, Volkswagen, and the other automobile brands in the Group, will end up losing billions of dollars in lawsuits, compensation and recalls. Moreover, the scandal could taint its name for years to come.
In September 2015, the EPA discovered that 499,000 Volkswagen diesel cars sold in the US since 2008 had a “defeat device”, software that could detect when a diesel engine is being tested. A “defeat device” can change the diesel engine’s performance accordingly to improve results. Without this software, the affected Volkswagen cars can emit nitrogen oxides (NOx) at up to 40 times higher than the legal limit during normal operation.
Affected diesel models included:
In the same period, Volkswagen admitted to having rigged 11 million of its cars worldwide. In November 2015, the EPA said that it found the same “defeat device” on the following SUVs and luxury vehicles:
The 2015 Volkswagen emissions scandal has serious effects on both the environment and human health. According to a September 2015 Guardian analysis, Volkswagen’s defective vehicles could produce between 237,161 and 948,691 tons of NOx emissions yearly. This amount is roughly equivalent to the combined NOx emissions of all of the UK’s power stations, vehicles, industries and agricultural facilities. NOx emissions can stunt plant growth and render vegetation vulnerable to damage and disease. When NOx emissions react with sulfur dioxide, they form acid rain, which destroys cars, buildings and historical monuments.
NOx emissions can likewise react with other compounds, resulting in fumes that can trigger heart and lung ailments. When NOx emissions react with ammonia, moisture and other compounds they form nitric acid and small particles that penetrate deeply into the lungs. Nitric acid and related particles can cause lung tissue damage, worsen existing heart and lung conditions and even lead to death. According to 2015 health research in the UK, 9,500 premature deaths in London every year can be attributed to high levels of NOx emissions.
Why Did Volkswagen Do It?
Investigations revealed that Volkswagen resorted to greenwashing in order to raise its vehicle sales. Since 2013, Volkswagen had been struggling to stay afloat in the US market. The company’s US sales plunged from 438,133 in 2012 to 407,704 (-6.9%) and 366,970 (-10%) in 2013 and 2014, respectively. In September 2015, Volkswagen was able to sell only 40,110 vehicles, a 2% decrease from 40,913 vehicles in September 2014.
It also didn’t help that diesel vehicles are becoming increasingly unpopular among consumers. In fact, there are some towns and cities that go as far as imposing restrictions on diesel vehicles, if not banning them altogether. In Madrid vehicles are no longer allowed in the city center, those who don’t have a guaranteed parking space are fined at least $100 and drivers of large diesel cars have to pay a 20% parking surcharge.
Dropping vehicle sales and the growing unpopularity of diesel vehicles influenced Volkswagen’s choice. As early as 2007, Robert Bosch GmbH, the company that supplied “defeat devices” to Volkswagen, cautioned the car manufacturer that using “defeat devices” to manipulate car emissions was illegal. However, installing better emissions control technology on its diesel vehicles would have cost Volkswagen an additional USD300 per vehicle. Rather than choosing to make their car more expensive and risk selling even fewer cars, Volkswagen resorted to greenwashing.
Volkswagen lost billions of dollars as a result of the scandal. In October 28, 2015, the company declared a third quarter operating loss of about USD3.9 billion. This is nearly the same amount that it earned in the same period last year. In addition, Volkswagen had to spend USD7.4 billion to shoulder the costs of the scandal.
Aside from financial losses, Volkswagen also had to face lawsuits and loss of consumer confidence. On January 4, 2016, the US Department of Justice filed a civil lawsuit against the Volkswagen Group, including Audi and Porsche, for violating the Clean Air Act for every U.S. diesel vehicle sold since the 2009 model year. An October 2015 online survey by AutoPacific revealed that after the scandal only 1 out of 4 vehicle owners “have a positive opinion of Volkswagen.” About 29% of the survey’s respondents said that they “have a favorable opinion of the [Audi] brand,” a steep decline from 69% before the scandal took place. In addition, about 64% of the respondents said that they “do not trust Volkswagen” and that they believed that other manufacturers are also using defeat devices on their vehicles.
Volkswagen wanted to sell more diesel vehicles in a depressed market without having to invest in the sustainability of its vehicles. Hence, it resorted to greenwashing by installing defeat devices in its diesel cars. By doing so, Volkswagen was able to save USD300 on each of its diesel vehicles and it sold more cars because consumers thought that Volkswagen diesel vehicles were environmentally-friendly. However, the scandal cost Volkswagen more than it was able to save. It is difficult to precisely quantify this loss in terms of damage to consumer trust and brand value. But even in purely financial terms, Volkswagen stands to lose billions of dollars on lawsuits and consumer compensation alone.
All companies, both big and small, should learn from the 2015 Volkswagen emissions scandal. Unethical business practices such as greenwashing might help companies in the short term to have broader appeal and sell more products and services, but once they are discovered they are at significant risk of losing sales and the trust of their customers.
FirstCarbon Solutions (FCS) is a leading sustainability solutions provider to organizations and governments around the globe. FCS gives expert advice on sustainability solutions to improve ESG performance and your bottom line.
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