What is greenwashing?

What is Greenwashing?

It is a marketing strategy for products that claim to be sustainable.

It refers to unsupported environmental messages that are issued to the consumer. The type of communication favors the image of the company with reference to its sustainability practices

This may involve the use of vague and general claims such as “ecological”, “sustainable” or “green” when marketing your product to consumers.

In the food industry, the term “organic” has been used in a similar way, often without providing the consumer with a clear definition of what it really means. These types of claims can give the misleading impression that a product has little or no negative impact on the environment.

Companies that develop messages with this type of content are designed to create a green brand image rather than represent a meaningful commitment to environmental causes.

Environmental groups have argued that these claims are designed to create an eco-friendly image of the brand rather than representing a significant commitment to environmental causes.

How common is it?

Based in a study developed by the International Consumer Protection Enforcement Network 4/10 displayed vague environmental claims as well as hiding or omitting certain information in their advertisements. An EU Comission corroborate that 42% of the reviewed cases lacked of evidence of their “green” asseveration and that they qualify as false or deceptive.

Buying Behaviour

The sustainable products are an important factor for the consumers. 66% of consumers are willing to pay more for sustainable goods, Nielsen report reveals. Sustainability sentiment is particularly consistent across income levels, and the clients would pay more if doing so ensures they remain loyal to their values. “Brands that establish a reputation for social responsibility and environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty” says Farraj. In the top of the list of the factors that influence purchases is the Brand trust with 62%. “Brands that ignore sustainability increase reputational and business risk. This may give competitors of all sizes the opportunity to build trust with the predominantly young, socially- conscious consumer looking for products that align with their values.” says Carol Gstalder, senior vice president, Reputation & Public Relations Solutions, Nielsen.

Is greenwashing illegal?

Yes, it can be. Based on the Unfair Commercial Practices Directive, and the Misleading and Comparative Advertising Directive protect traders against misleading advertising and its consequences.

In Spain, the regulations on unfair competition and within the catalog of specific behaviors that are considered as unfair are the “misleading acts and omissions”, which constitute misleading commercial practices, and are regulated in articles 5 and 7 LCD respectively.

Misleading commercial practices that entice a consumer to buy a product based on false information are prohibited, and are a prosecutable offence. Food labels, marketing, advertising and claims on a website are all caught by the prohibition on misleading commercial practices.

 

Next Steps

The European Commission has proposed to update the EU consumer rules, aiming to obligate producers to provide information on products’ sustainability and ban ‘greenwashing’ practices. The Commission also proposed the addition of new practices to the existing list of prohibited, unfair commercial practices, referred to as the ‘black list’. The proposed new practices include, among others:

  • Making generic, vague environmental claims where the excellent environmental performance of the product or trader cannot be demonstrated. Examples of such generic environmental claims are ‘environmentally friendly’, ‘eco’ or ‘green’, which wrongly suggest or create the impression of excellent environmental performance;
  • Making an environmental claim about the entire product, when it really concerns only a certain aspect of the product;
  • Displaying a voluntary sustainability label that was not based on a third-party verification scheme or established by public authorities.

Based on the Eurobarometer studies, 9 out of 10 consumers said that protecting the environment was important to them when choosing products. Clearly sustainability is a worldwide concern that continues to gain momentum, but Food and beverage companies should be aware of the increased focus on “green” claims in terms of regulations and have more care about displaying unsubstantiated claims. Traders should especially be prepared for the higher-level penalties in the EU Directive from May 2022. As consumers we should also be aware of the products legitimacy and be more careful of those who claim to be “green”, “eco-friendly”, “energy efficient”, “carbon neutral” or “climate neutral”.

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