Greenwashing, the propagation of misleading or unsupported environmental claims, has a profound effect on consumer behavior. It capitalizes on consumers’ desire to make eco-conscious choices by leading them to believe they are purchasing environmentally friendly products when, in reality, it often involves deception or half-truths aimed at reaping economic benefits.

The lack of clear international standards to define the true environmental impact of products and services further adds to the ambiguity surrounding greenwashing. This ambiguity allows companies to exploit terms like “carbon-neutral,” “climate-friendly,” “responsible,” and “green,” which can be interpreted in countless ways, leading to confusion and deception.

Moreover, claims such as “ecological,” “eco-friendly,” “environmentally friendly,” “emission-free,” “carbon-friendly,” and “carbon-neutral,” along with broader terms like “conscious” and “responsible,” are intentionally misleading.

In a study conducted by the Finnish Ministry of Economic Affairs and Employment (TEM) and the Finnish Environment Institute (SYKE) in the summer of 2022, it was discovered that approximately 56% of environmental claims in Finnish online advertisements were inappropriate and misleading.

While 44% of the ads were considered acceptable, insufficient resources hindered the verification of the environmental impacts presented in the advertisements (Heinonen & Nissinen 2022). Even one percent of clearly false claims is unacceptable, as it violates consumer protection laws and leads to unintended purchases.

Greenwashing have long-lasting effects

The consequences of greenwashing can be severe and far-reaching. History has shown that companies caught engaging in greenwashing practices often suffer significant financial losses.

Take the case of the German automotive giant, Volkswagen, whose value plummeted by nearly 60% within six months after its unethical greenwashing and emission cheating were exposed.

To this day, Volkswagen has been unable to regain its pre-scandal peak value, highlighting the long-lasting damage caused by greenwashing.

While some companies intentionally engage in greenwashing to gain a competitive edge or improve their brand image, others may unknowingly participate due to the complexity of terms and practices related to environmental responsibility and the circular economy.

In some cases, the company’s management may be unaware of the deceptive actions of their communication and marketing departments.

Greenwashing can also have unpredictable consequences that extend beyond the offending companies. By making baseless promises, these companies not only harm themselves but also hinder the recognition of genuinely ecological and sustainable products and services.

This double damage impedes progress, even if the companies’ primary intent was not to harm others.

Dangerous and unpredictable

A survey conducted by the Consumer’ Union of Finland in January 2022 revealed that a staggering 57% of Finns distrust companies’ environmental claims. Additionally, more than half of consumers find it challenging to assess the true sustainability of a product or service (CUF 2022).

Such misleading marketing practices erode trust in sustainable development principles and undermine the efforts of research and product development within this framework.

The erosion of trust caused by greenwashing is comparable to the impact of fake news on media credibility. It undermines people’s faith in sustainable development principles, making it difficult to achieve ambitious climate and circular economy goals (Ognyanova et al. 2020).

This loss of trust can necessitate the enforcement of stricter regulations and laws, which some may perceive as limitations on freedom of choice and market forces.

Greenwashing is a pervasive issue that deceives consumers, undermines genuine sustainability efforts, and poses a threat to climate and circular economy goals. Companies must prioritize transparency and accountability in their environmental claims to restore and maintain consumer trust.

Likewise, consumers need to be vigilant, seek clear information, and support products and services that genuinely contribute to a more sustainable future. By fostering an environment of trust and responsibility, we can collectively combat greenwashing and work towards a truly sustainable society.

References

Harris, M. D. 2015. When to Sell with Facts and Figures, and When to Appeal to Emotions. Harvard Business Review 26.1.2015. Harvard Business Publishing. Massachusetts.

Heinonen, T. & Nissinen, A. 2022. Ympäristöväittämät Suomen markkinoilla. Työ- ja elinkeinoministeriön julkaisuja 2022:48. Finnish Ministry of Economic Affairs and Employment. Helsinki.

Consumer’ Union of Finland. 2022. Aidosti vihreää vai viherpesua? Kyselytutkimus kuluttajien suhtautumisesta ja luottamuksesta ympäristöväitteisiin ja -merkkeihin. Helsinki.

Ognyanova, K., Lazed, D. Robertson, R. E. & Wilson, C. 2020. Misinformation in action: Fake news exposure is linked to lower trust in media, higher trust in government when your side is in power. Misinformation Review 2.6.2020. Harvard Kennedy School. Cambridge.