What is greenwashing?

Greenwashing is used to describe the practice of companies launching adverts, campaigns, products etc. under the pretence that they are environmentally beneficial, often in contradiction to their environmental and sustainability record in general. Emma Kerrison explains more.

Why do companies greenwash?

Companies apply greenwashing techniques to the promotion of their products in order to appeal to the environmentally-conscious consumer.  Claims that align a product or campaign can gain market share and a competitive advantage over their rivals.

An awareness of greenwashing has increased in recent years. This is due to the rising demand for environmentally sustainable products and much-needed transparency that goes hand in hand with ethical consumption. However, as public consciousness of environmental issues rises so does the temptation to greenwash. As companies rush to exploit this new consumer base, keeping an eye out for greenwashing is more important than ever.

There is also an increasing pressure, from the public and government, for large companies and corporations to reduce their impact on the environment, especially with regard to their contribution to greenhouse gas emissions.

Three Greenwashing Examples: BP, Shell and Ryanair

logo: bp oil company greenwashing

BP

In December 2019, environmental legal charity ‘Client Earth’ launched a complaint against BP over claims of greenwashing. BP is accused of misleading consumers, giving them a false impression of their environmental record, with a recent BP advertising campaign adopted an environmental focus and promoted its proposed low-carbon energy initiatives.

In its ‘Keep Advancing’ and ‘Possibilities Everywhere’ campaigns, BP acknowledges the need to drastically reduce greenhouse gas emissions.

However the energy sector is one of the largest contributors to global greenhouse gas emissions, there are calls for the sector to de-carbonise and thereby reduce its impact on the warming climate. There is a considerable challenge to be faced in switching our energy supply from one that is fossil fuel based to one that is significantly less carbon-intense. BP claim to be leading the way.

Client Earth lawyers contest the claims made in BP’s advertising campaign regarding their commitment to low-carbon and renewable energy. Whilst BP advertise a keen focus on investing in environment-friendly energy, the fact remains that 96% of their annual capital expenditure is spent on non-renewable oil and gas. Going by their own figures, BP is investing $500 million a year in low-carbon initiatives, less than 4% of overall investment.

Client Earth Lawyer Sophie Marjanaca argues that,

“due to BP’s considerable on-going investment in non-renewable energy, advertising a focus on renewable energy investments gives a false impression to the consumer. This is a clear case of greenwashing; BP present themselves as prioritising renewable energy, despite the vast majority of investment going towards non-renewables.”

logo: shell company logo

Shell

Similarly to BP, in April 2019 Shell announced a $300 million investment in ‘natural ecosystems’ as part of a strategy to take action against climate change.

Some funds now go towards projects that protect trees and others invest in carbon credits. Activities such as these are known as climate change mitigation strategies. In essence, they help to reduce the adverse effects of climate change by reducing the amount of carbon dioxide in the atmosphere.

 As with BP, by continuing the extraction of fossil fuels from the ground (and the subsequent burning of those fuels), Shell contradict the very mitigation efforts they promote.

Whilst assisting in the reduction of greenhouse gas emissions that already exist within our atmosphere may have some positive effect, the IPCC asserts that “natural climate solutions do not compensate for the continued release of greenhouse gases”.

Despite committing themselves to oil and gas, Shell continue to promote themselves as an energy provider that is uses “100% renewable electricity as standard”. This claim is questionable as in 2018 Shell invested $25bn in non-renewable oil and gas energy sources.

According to the Natural Resources Defence Council’s (NRDC) definition, renewable energy is, that which “comes from natural sources or processes that are constantly replenished”. However, Shell’s claim of a 100% renewable source only stands in virtue of purchasing green offsetting certificates, not through buying directly from renewable energy sources. Energy companies can remain investing in non-renewable sources and merely buy enough green certificates to match this investment.

Investing in “natural climate solutions” and purchasing green certificates promote the idea of Shell as an environmentally responsible company. However, Shell significantly lacks direct investment in renewable energy while the green initiatives it does engage with have no significant impact. Given that the majority of investment is still being pumped into the fossil fuel industry, it can be argued that this is an act of greenwashing.

image: ryanair greenwashing

Ryanair

In February 2020, a Ryanair advert was banned by a UK watchdog over claims of greenwashing. The advert, released in September 2019, claims that the budget airline is most carbon efficient in Europe, asserting that they have “the lowest carbon emissions of any major airline”.

It is well-known that flying is an incredibly carbon-intensive activity. Therefore, airlines will be determined to promote their environment-friendly endeavours. However, Ryanair’s claim that it produces the lowest carbon emissions amongst all major airlines in Europe is questionable. According to the Advertising Standards Authority, claims made in the advert are misleading and could not be legitimately backed-up.

Reportedly, data from as far back as 2011 was cited in support of the airline’s claims. This holds little comparative value in 2019. Moreover, some well-known airlines did not appear in Ryanair’s comparison.. In general, Ryanair’s basis for their ‘lowest emissions’ claim lacks detailed analysis of how they came to this conclusion, with important information missing from reports.

Greenwashing, in this instance, is a company's self-presentation as the most carbon-efficient in its field without substantial evidence, whilst it continues to endorse un-environmentally sustainable practices.

An airline may create a competitive advantage by presenting itself as the least environmentally damaging in its field, enabling them to exploit an environmentally conscious consumer base under false pretences.

Where did the term 'greenwashing' come from?

The term ‘greenwashing’ was coined by Jay Westerveld, an American environmentalist and researcher, in 1986. The word was initially used to describe the adoption of a reusable towel service at a beach resort in Samoa that was sold as a way to help the environment. Meanwhile, the resort was expanding further and further into the local area.

How to tell if a company is greenwashing?

With a rise in environmental-consciousness comes a rise in greenwashing. If you are concerned a company’s environmental initiative might not be all it seems, there are a few important questions to ask.

What proportion of a company’s product is sustainable?

As with energy companies like BP, it is important to consider how much of what they are producing is sustainable. If it is a minimal proportion, whilst the rest of their product creates a negative environmental impact, it is possible that the sustainable aspect they are advertising is a form of greenwashing.

How do they define sustainable?

It is also important to consider what a company considers to be sustainable or environmentally friendly, as it may differ from your own view. Take the example of Shell. They consider their energy to be 100% renewable as they invest in  green offsetting certificates, despite continuing investment in unsustainable gas and oil. Whereas, for you and me, a sustainable energy source is one that directly invests in renewable energy sources.  

How do they compare to companies in the same field?

As it is clear from Ryanair, comparative claims are an important way to examine a company’s environmental impact. Whereas Ryanair misled consumers by making false comparisons, we can compare products we consume to others and opt for companies that show themselves to be making significant strides in sustainability.

Are there any hidden trade-offs?

This is essential when considering the energy and travel sectors. When a company has a significant monetary stake in unsustainable practices, like the extraction and burning of fossil fuels, environment-friendly initiatives conflict their primary interest. In these cases, sustainable advertisement and campaigns are often a case of greenwashing to entice conscious consumers whilst they continue to exploit the environment.

Being aware of greenwashing practices is the first step to undermining its effectiveness. As consumers, we must hold companies to account through questioning sustainability initiatives and demanding transparency.

We can use the resources at our disposal – environmental charities, consumer watchdogs, advertising standards bodies – to expose and challenge false claims. Importantly, our most powerful tool is where we spend your money.

Through reducing our spending with companies that indulge in greenwashing and investing our money where genuine efforts are being made to reduce environmental damage, the effects of greenwashing are diminished.

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