eco / environment / green

Sustainability, ESG and the push to go ‘green’ have become buzzwords that dominate discussions in Malta’s business landscape. While some companies find it difficult to meet the ever-evolving regulations, others fall short of fully committing to the urgent mission to safeguard our planet from the escalating climate crisis.

Such a mentality might lead to corporate greenwashing and while brushing it under the rug might be a temporary fix to avoid being fully committed to the cause, losing the trust of clients and other potential customers will be permanent.

Put simply greenwashing is when a company or organisation presents itself as being environmentally friendly or sustainable, through certain practices, without making the efforts to reduce the actual environmental impact. However, this can take various forms:

1. Green crowding

    This occurs when companies blend in or align themselves with larger groups or coalitions focused on environmental issues, thereby obscuring their individual responsibility and reducing accountability for their own sustainability practices. This confuses consumers and makes it more difficult to distinguish between genuine efforts and empty promises.

    An example of this is when fashion brands like H&M and Zara release collections labelled and marketed as eco-friendly, but still engage in unsustainable business models focused on mass production and rapid consumption.

    2. Green hushing

    Like the name suggests, green hushing is the practice of companies underreporting their sustainability performance, aiming to reduce the chances of being criticised or scrutinised by the public, and investors.

    For instance, Coca Cola has been working on water conservation and waste management initiatives, yet it has avoided prominent advertising because of the environmental impact it has had over the years. A big company like Coca Cola might hesitate to market its ‘efforts’ over fears of being called out if they don’t meet the goals.

    3. Green shifting

    Green shifting is a relatively new term but happens when companies shift blame and ask consumers to be more sustainable and reduce their own carbon footprint, without actually making the effort to take action at corporate level.

    This was seen by Shell, a multinational petroleum company, that asked what consumers would individually do to reduce their footprint in 2020.

    4. Green labelling

    This term is used when companies strategically mislead and mislabel individuals into thinking that the product is environmentally friendly, when in reality it is not.

    An infamous case of green labelling was Volkswagen’s ‘clean diesel’ campaign which marketed vehicles as being environmentally friendly and low-emission through the use of the Turbocharged Direct Injection (TDI) label.

    However, the company installed a software that manipulated emissions tests to meet regulatory requirements and as a result emitted  far more pollutants than claimed.

    5. Green rinsing

    Interestingly, through green rinsing, companies make highly strategic changes to their ESG goals and policies. While this might not sound malicious, such changes often occur ahead of the deadline for the goals that should be achieved.

    PepsiCo, ahead of reaching the target date, adjusted its recycling targets by pushing forward the deadline.

    How will it impact your customers?

    Being misleading will eventually erode the trust that customers have placed in a brand. This will not only damage the brand’s reputation but also negatively impact sales.

    Creating confusion can make it more difficult for consumers to distinguish between companies that are genuinely committed to sustainability and those that are merely claiming to be.

    The act of greenwashing is also unfair to other brands that are genuinely working towards greater sustainability. When combined with confusion, this can harm legitimate brands, as consumers may become more sceptical of all green marketing claims, even those that are authentic.

    Furthermore, customers who are aware of certain forms of greenwashing and are particularly loyal to a specific brand may opt for the less environmentally friendly option, which ultimately reduces the incentive for making sustainable choices.

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