It is a well-known fact that the increasing production demands and current business practices are negatively impacting the environment. Consumer demand is unlimited while natural resources, such as fossil fuels, are not. This has led companies to turn to corporate environmentalism. They want to appease strong consumer reactions against unethical environmental practices. This makes green marketing a must.
Businesses have turned to digital marketing due to the rise in popularity of social media. While the benefits have been substantial, there have also been consequences. Opportunistic sales people can take advantage of and profit from the consumers’ inability to confirm the claims many brands make.
We should all double-check claims made by “eco-friendly” or “environmentally responsible” products and services. It is unfortunate that businesses spend time and money intentionally misleading consumers. Misleading environmental claims exacerbate the situation.
The importance of marketing in increasing profits and remaining competitive cannot be overstated. However, when companies deceive consumers in order to meet those goals, action must be taken. These misleading actions divert attention from genuine environmental efforts, such as the transition to sustainable packaging.
In This Article:
Greenwashing - What You Need To Know
Greenwashing - Meaning
Greenwashing occurs when a business spends more time and money marketing itself as environmentally friendly rather than minimising its environmental impact. Business ethics goes out the door when companies decide to take part in greenwashing. It is a deceptive advertising ploy designed to mislead consumers, especially those who prefer to buy goods and services from environmentally conscious companies.
Greenwashing - Examples
Some greenwashing is unintentional due to the lack of knowledge of the law. In most cases, however, companies know exactly what they are doing and choose to do harm anyway. Here are examples of how you, as a consumer, can identify greenwashing practices:
Recyclable & Recycled Materials
For decades, the brightest minds have been trying to solve the world’s waste problem. Only a few of these attempts have been successful. To help mitigate the effects, various manufacturers have developed recyclable packaging options. Multinational corporations such as McDonald’s have been chastised and sued for false claims. They alleged that their paper straws are fully recyclable when it has been proven that they are not.
The use of recycled materials is also heavily exploited by environmental marketing claims. Companies invest heavily on marketing the materials they use as “recycled” to try and be green. Most of the time, there is no reliable third-party certification to prove it.
'Green' Words & Omitted Information
The terms “eco friendly,” “green,” or “good for the planet” are often used in food labels to boost marketing numbers. This is to entice environmentally conscious buyers to purchase their product. It might sound authentic, but these declarations are rarely backed by scientific data.
Another problem is the omission of important information in marketing campaigns. Fast fashion brands are a prime example of this. They tend to heavily market a specific fashion line as environmentally responsible in order to engage consumers. What they don’t say are the effects of the rest of their brand’s products. There may not be any environmental benefits at all.
Carbon Footprint Offsetting
The number one contributor to climate change is greenhouse gas emissions by MNCs. To balance their own emissions, a corporation can try to remove the same amount. It is called carbon offsetting. Environmentalists contend that this is simply putting off the issue of lowering pollution.
Greenwashing occurs when a business spends more time and money marketing itself as environmentally friendly rather than minimising its environmental impact.
Greenwashing in Australia
The modern-day consumer is more conscious of the products and services they patronise. Reliable information is necessary to confirm whether it is sustainable or not. Environmental or “green” claims must be scientifically solid and thoroughly substantiated. Whether you make environmental claims or not, consumers have a right to believe them. It’s not just good business; it’s the law.
The Australian Consumer Law applies to all forms of marketing, including claims on packaging, labelling, advertising, and promotion across all mediums. Greenwashing falls under the jurisdiction of the ACL and Australian Competition & Consumer Commission (ACCC).
The following are the specific provisions in the ACL about environmental marketing claims:
Misleading and Deceptive Conduct
Businesses have an obligation not to engage in any conduct that is likely to mislead or deceive consumers. The conduct only needs to be likely to mislead or deceive. It does not matter if it actually misled anyone or whether the business intended to mislead – if the conduct was likely to mislead or deceive, the ACL is contravened.
Businesses have to take into consideration the class of people likely to be affected as well as the nature of the product they are trying to promote. Silence can be misleading if there is an obligation to say something in all of the relevant circumstances or if a reasonable expectation is created that matters will be disclosed if they exist.
False or Misleading Representations
False and misleading representations are more serious than general ones. There are 2 specific forms of prohibited misrepresentations by the ACL relevant to environmental claims. The ACL prohibits businesses from falsely representing goods as being of a specific standard, quality, value, grade, composition, style, or model, or as having a specific history or previous use.
Simply put, goods must conform to any description provided in advertising or labelling. This is especially true for claims about recycled and recyclable content or the environmental impact of product components like refrigerants.
The ACL also states that a company must not represent its goods or services to have sponsorship, approval, performance characteristics, accessories, uses, or benefits that they do not.
Consequences for Greenwashing
Consumers or other businesses who believe they have been misled by a company and have suffered losses as a result can sue the company for greenwashing. The ACCC, the state and territory consumer protection agency, and any other individual or group can take legal action against businesses for any contraventions of the ACL.
Some of the remedies given to the wronged party are as follows:
- Criminal or civil pecuniary penalties to the greater of $10 million, 3 times the value of the benefit received. Where the benefit cannot be calculated, 10% of annual turnover in the preceding 12 months for corporations.
Criminal or civil pecuniary penalties of up to $500,000 for individuals.
- Infringement notice penalties of up to $133,200 for publicly listed companies, $13,320 for corporations, and up to $2,664 for individuals.
- Disqualification orders
- Injunctions to prevent ongoing conduct
- Corrective advertising orders
How can businesses avoid greenwashing?
The ACL provides a checklist of reminders for marketers to confirm greenwashing claims are not present:
Joining the Australian Packaging Covenant Organisation is another way for businesses to ensure that they are not engaging in greenwashing. APCO’s vision is for the country to have a circular economy for packaging.
Businesses can take advantage of programmes and resources such as the ARL and PREP to help them build a sustainable packaging ecosystem.
The Australian Recycling Label (ARL) is an on-pack label that assists Australian and New Zealand consumers in recycling their packaging correctly. They make simple information available to consumers so that the packaging can be properly disposed of.
The Packaging Recyclability Evaluation Portal (PREP) is an online tool that assists packaging manufacturers in Australia and New Zealand in determining how their products will perform in resource recovery systems. Shape, size, weight, inks, adhesives, and materials are all taken into account to determine how collection services can handle them as well as their performance in Materials Recovery Facilities.
These organisations will assist in reining in businesses and ensuring transparency and accountability throughout the supply chain.
Greenwashing vs. Green Marketing
Green marketing allows companies to showcase their sustainable practices to global consumers. By definition, the difference between greenwashing and green marketing is minimal. The problem is the extent to which companies take advantage to benefit themselves.
It entails the promotion of green products and other renewable materials. Businesses can show off their corporate social responsibility plans through green marketing. It is a good way to show their commitment to lessening their environmental impact. The main difference between the two is that green marketing is backed by actual proof of the benefits.
Criteria for Green Marketing
The following are the criteria for what constitutes green marketing around the world:
Pollution from factories throughout the world is rapidly harming the environment. Businesses must decrease water, land, and air pollution to be truly green. This can be achieved by using recycled materials, planting trees, and waste management.
Adhering to a Legal Framework
Without provisions or regulations, businesses will just do what they think is right. A framework that follows a reward and punishment scheme should be established.
Committing to Sustainable Marketing and Development
Green marketing is a costly process. True commitment and the want for sustainable development is needed to truly succeed. Everyone in the firm should understand the company’s environmental goals and objectives.
Technologies have made it possible to meet customer demand while reducing the environmental effects. Although initially costly, firms should consider investing in these technologies. It will expedite some processes and increase consumer satisfaction.
Frequently Asked Questions
Why does corporate greenwashing cause harm?
Greenwashing hurts businesses in a variety of ways. It essentially encourages people to purchase non-sustainable goods and services. Instead of investing in genuine environmental causes, these companies fund harmful schemes.
These misleading claims imply a more eco-friendly world yet they harm the environment. False promises about a product’s environmental benefits contribute to global warming.