Greenwashing: What it is and what you can do

Jackie Lam
August 2, 2017
16 min read
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A hypothetical (but likely) scenario: You’re perusing the aisles at your favorite natural foods store. After poking around in the cleaning goods section, you pick up a bottle of multi-purpose cleaner from the shelf.

Words such as “all-natural” and “earth-friendly” pop out from the packaging. But, upon closer inspection, you find that this supposed eco-friendly product contains ingredients that are comparable — if not worse — to its chemical-riddled counterparts. 

And if you dig a little deeper, the cleaner in your hand may be manufactured by an offshoot of a major conglomerate steeped in production processes that deplete our ozone layer.

You feel duped, and rightly so

This practice by manufacturers to intentionally mislead consumers into thinking they’re buying an eco-friendly product is called “greenwashing.” It’s when a company makes vague or outright false claims about being a green product, only to mask the fact the item touted as being environmentally conscious isn’t eco-friendly at all. 

Businesses are well aware people want to spend on items that are in step with their values. In fact, according to a recent survey,1 a vast majority — 89 percent, to be exact — of consumers in the U.S. are willing to buy at least one kind of product that has a positive effect on the planet. 

And that may be partly why greenwashing has become so widespread. Since the term was coined back in the mid-’80s, back when Chevron commissioned a costly marketing campaign boasting its commitment to the environment.2 And in recent years greenwashing techniques have grown so clever and sophisticated it’s getting harder to detect. 

What to look out for

To help you spot a bogus product, you can go by the “seven sins” of greenwashing:

  • Vague claims. Just like how words such as “nice” lack any substance, blanket or fluffy statements such as “green” or “all-natural” is a telling sign that a product is greenwashed. For instance, “all-natural” beef may still mean the cows were still injected with growth hormones and raised on a factory farm.
  • No supporting evidence. A company may advertise on its label or market that it is green. But if you go to their website, there’s no information readily available to back this up. On top of that, there’s no exact numbers, business plan, or target dates on what the company’s goals are.
  • Hidden trade-offs. While a product may be advertised as eco-friendly simply because the packaging may be recycled, the other steps that are involved in its creation, such as in its manufacturing, labor practices, or other materials or ingredients used, may be doing more harm than good for the planet. 
  • It claims to be CFC-free. While being free of the ozone-depleting chlorofluorocarbons (CFC) is definitely a good thing, it turns out the U.S. government banned their use back in 1995,3 which means all products are legally mandated to be CFC-free. Not very impressive or unique.  
  • Slapping on false labels. A product may have some made-up certification or have received a fake award. These awards may not even exist, or worse, the company made have knowingly paid for a duplicitous certification or accolade.
  • Lesser of the two evils. While a manufacturer may boast that it is more environmentally friendly than competing products in the same group of products, the category of products as a whole may be harmful to the Earth. Case in point: American Spirit Natural cigarettes boosted the company’s sales by 86 percent from 2009 to 2014.4 A product being “natural” does not dismiss the fact that cigarette butts are the top item collected during coastal cleanups.5
  • Outright lying. A company may falsely claim to be, say, “Energy STAR” certified when they in fact aren’t. As a company could be slapped with a hefty fine, this is not as common as the other tactics of greenwashing. 

What you can do

  • Do your own research. It’s easy to be deceived based on clever marketing tactics and catchy taglines. If a company is indeed committed to sustainability, then it will be transparent in its business practices, goals, and missions. To be an eco-warrior, you’ll need to do your due diligence in digging around for additional information. Sites such as the Environmental Working Group (EWG) include well-researched, unbiased consumer guides to help you navigate through the treacherous muck.
  • Spread the word. If you learn about a company that is steeped in greenwashing practices, tell your friends. Post on social media, and bring it up for discussion at a community meetup. On the flip side, be a consumer advocate for companies and products that are genuinely committed to being green.
  • Continue to support true green businesses. From the shoes you put on your feet to the food you put in your stomach, support businesses that make products that are genuinely doing their lion’s share of helping the planet. 

Your money can make an impact beyond what you buy at the store. Our portfolios are comprised of companies that are committed to protecting the environment and boast a culture of transparency in their business practices and goals.

Dutch tech company Koninklijke Philips N.V., which is part of Swell’s Green Tech portfolio, plans to be carbon neutral by 2020. And Ecolab Inc, which is part of the Clean Water portfolio, improves water conservation, and recycles and reuses across several different industries. These are just a fraction of the companies that make up Swell Investing’s portfolios. Greenwashing is everywhere and will continue to be so. By being vigilant, you’ll be well armed to spot these false claims and be an eco-conscious consumer.

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