Part 3 – GREENWASHING

Authors: Tihon Cvijić and Danko Kalkan

THE CONCEPT AND DEFINITION OF GREENWASHING

Within green marketing, there is a form of distorted and false green advertising that Jay Westerveld called “greenwashing” in 1986 [1]. Namely, he noticed that a hotel in the Fiji Islands advises guests to use their towels several times, in order to protect the environment of that island from pollution through unnecessary towel washing [2]. However, that same hotel participated in the pollution of the environment of that island with its business. Jay Westerveld describes this marketing ploy through one new term – greenwashing. This term consists of two English words, green or washing, and washing (referring to washing towels) and refers to the process by which dirty (bad) environmental practice (hotels for example) “washes” to be clean, green . After Westerveld, many other authors began to explore this subfield of green marketing by enriching it with new definitions. For example, France Bowen and J. Alberto Aragon-Correa define greenwashing as the selective disclosure of positive information without the full disclosure of all negative information in order to create a single positive image of the corporation [3]. They also recognized the key elements of greenwashing, which can be summarized as follows: greenwashing is a thoughtful decision to disclose positive information that is initiated by the company and that is beneficial to the company but harmful to society [4]. A slightly sharper definition of greenwashing is given by the NGO Greenpeace, which defines greenwashing as “an act of deception of consumers about the company’s environmental practices or the environmental benefits of a product or service.” In this definition, we recognize the element of fraud, which is undoubtedly one of the most important elements of false green advertising. Another definition is given by Delmas and Burbano from the famous UCLA: greenwashing exists when a company has poor environmental performance, but maintains positive communication about that performance [5].

TYPES OF GREENWASHING

Over time, companies have perfected this type of green marketing and thus diversified their advertisements in order to avoid easy detection of this manipulation by consumers, but also by state supervisory bodies. The marketing agency Terrachoice recognized seven different marketing tricks by which companies try to deceive consumers and made a classification that they call “the sins of greenwashing”:

1. The sin of concealing properties: a claim that suggests that one product is “green” based on some insignificant product characteristics, while on the other hand other, much more significant and inferior characteristics of the product or service are concealed.
2. The sin of emphasizing the unimportant: a claim that is true but irrelevant to the consumer.
3. Sin of claims without evidence: statements about the impact of products on the environment that are not supported by easily verifiable information or through verified independent certificates.
4. The sin of uncertainty: claims about the properties of a product that are undefined and too extensive so that their meaning will be misinterpreted by the customer.
5. The sin of choosing the lesser of two evils: a product quality claim may be true in the product category, but overall it distracts consumers from the product’s overall risks to human health or the environment.
6. The sin of displaying false labels: a claim about a product or service, which gives the impression through descriptions or images that an independent third party has confirmed the properties that stand out, when in fact there is no such independent confirmation at all. In other words: fake label.
7. The sin of lying: incorrect environmental claims.

Drivers of Greenwashing

As we wrote earlier, greenwashing is the conscious highlighting of positive information despite poor environmental performance. However, behind the decision to use greenwashing there are much deeper causes that are found in the institutions, in the very structure of the companies as well as in the individual and psychological factors. Delmas and Burbano explored the deeper reasons leading to greenwashing and identified three types of causes: institutional, organizational, and individual-psychological.
Institutional causes relate to legislation, which is often weak due to poor knowledge and recognition of this problem by the legislator. Also, even when this regulation exists, it is rarely applied, so the cases of penalizing companies are less than actual violations. On the other hand, disclosure of information on environmental practices is not mandatory, which further increases the chances of manipulation. Weaknesses in legislation have several important consequences. Namely, not punishing greenwashing suits companies that deal with this practice: they will not give up this practice because there is no fear of being caught and punished. As companies continue to resort to greenwashing, the market for green products is gradually losing importance due to the declining confidence of consumers, who feel cheated.
The organizational cause is related to the structure of the company itself, to its internal communication and reward systems, as well as to the ethical climate that prevails in the company. The structure of a company refers to the production of goods or services: companies that offer goods have to resort to fake green marketing more than those that offer services because consumers often ask for products to be “eco-friendly”, while this requirement is less important when it comes to services . Another organizational factor is communication between the company’s senior sectors – Delmas and Burbano found that once poor communication between the public relations sector and the manufacturing sector results in sending manipulative environmental messages. In these cases, the public relations sector presents the company’s environmental practices in a positive light, however, due to poor communication, the production sector is not aware of the need to make production sustainable, which results in false advertising. Third, the reward system encourages managers to engage in greenwashing. Managers get bonuses if they increase the company’s profit, however in order to achieve higher sales and thus profit, they try to enter the green products market through false advertising. Fourth, the ethical climate that exists in the company can be the cause of greenwashing. In companies where the climate is selfish, employees behave in an unethical way, and since greenwashing is inherently unethical behavior, there is a high possibility that a particular company will use greenwashing.

Individual or psychological causes relate to the behavior of company directors and managers. They often make decisions without having complete information and therefore make a mistake without conscious intention. For example, a director who wants the company’s production to become sustainable may make promises that he may not fulfill because he does not have the right information about the time and cost of sustainable production. Another individual driver is the decision between short-term and long-term benefits: directors often opt for false advertising as an option that gives immediate results, instead of dealing with the company’s sustainable development programs that will give results in the long run.

THE INFLUENCE OF GREEN ADVERTISING ON GREENWASHING RECOGNITION

Having seen how greenwashing originated, what are its variants and what are its drivers, we now turn to the question of how advertisements affect the recognition of hidden greenwashing. Schmuk, Matthes and Naderer [6] conducted research on the impact of advertising on the recognition of greenwashing within different types of consumers. At the beginning of the experiment, they made several assumptions that were subject to confirmation or rejection.

The first assumption was about the difference between vague and false claims – this group of authors found it harder to recognize greenwashing when an advertisement contained vague claims than when the claims were false. Another assumption is that consumers who have knowledge on the environmental topics are more likely to recognize greenwashing compared to consumers who are only concerned about the state of the environment. The third assumption is that it is harder to recognize greenwashing if the advertisement, in addition to the verbal part, also contains a visual part with a picture of nature.

The experiment largely confirmed the above assumptions: respondents find it easier to detect greenwashing when the claims are false, because they are obvious, while in case they are unclear, consumers have difficulty recognizing them. Also, as expected, it has been confirmed that consumers who have knowledge of the environment are better at discovering greenwashing because they pay more attention to detail in advertising. However, the greatest discovery of this research, due to its comprehensiveness, is the confirmation of the third assumption. Namely, whether the advertisement contains false or vague claims, if it contains a picture of nature, the ability of consumers to recognize greenwashing is drastically reduced. Also, both consumers who have knowledge of the environment and those who are only concerned are not able to detect greenwashing if the advertisement contains an image of nature. The explanation for these results lies in the very way the human brain functions. The verbal part of the advertisement awakens rationality in a person, who observes the advertisement in a rational way and logically reveals greenwashing. On the other hand, the visual part of the advertisement arouses emotionality, which is stronger than rationality and does not allow the consumer to rationally analyze the advertisement. Visual advertising, i.e. the image of nature, creates a virtual reality in which the consumer experiences a state of enjoyment of nature. Thus, the image of nature creates a strong emotional reaction and puts rationality in the background, not allowing the consumer to discover false green advertising.

CONCLUSION

In this series of articles, we have presented the development from societal and green marketing to the emergence of greenwashing. We then showed the types of greenwashing, its drivers and the role of advertising in greenwashing. However, we believe it is important to point out the opportunities available to us to reduce this bad practice. Delmas and Burbano [7] in their paper on the drivers of greenwashing offer several solutions in order to reduce greenwashing.

The first solution is the transparency of the company, i.e. mandatory and voluntary disclosure of information on environmental performance, thus the possibility of consumer fraud would be drastically reduced. Raising consumer knowledge is one way to combat greenwashung, as they will be more careful when buying green products. As a third solution, they cite improved legislation and stricter penalties for companies that abuse green marketing. They also point out that it is important to change the ethical climate in companies through ethical courses for employees. Finally, they believe that firms must centralize decision-making and communication to avoid greenwashing due to weak communication.

References:

^[1] Desirée Schmuck, Jörg Matthes & Brigitte Naderer (2018) Misleading Consumers with Green Advertising? An Affect–Reason–Involvement Account of Greenwashing Effects in Environmental Advertising, Journal of Advertising, 47:2, 127-145, DOI: 10.1080/00913367.2018.1452652

^[2] Delmas, Magali A. and Cuerel Burbano, Vanessa, The Drivers of Greenwashing (November 30, 2011). California Management Review, Available at SSRN: https://ssrn.com/abstract=1966721

^[3] Watson, Bruce,  „The  troubling  evolution  of  corporate  greenwashing“. The Guardian, August 20, 2016. https://www.theguardian.com/sustainable-business/2016/aug/20/greenwashing-environmentalism-lies-companies (pristupljeno 16.11.2020.)

^[4] ibid.

^[5] Bowen, Frances & Aragon-Correa, J.. (2014). Greenwashing in Corporate Environmentalism Research and Practice: The Importance of What We Say and Do. Organization & Environment. 27. 107-112. 10.1177/1086026614537078.

^[6] ibid.

^[7] Delmas, Magali A. and Cuerel Burbano, Vanessa, The Drivers of Greenwashing (November 30, 2011). California Management Review, Available at SSRN: https://ssrn.com/abstract=1966721