Greenwashing: How Brands Deceive Aussies with Ecological Claims

In today’s world, being able to prove your commitment to sustainability and environment-friendly practices can go a long way in attracting customers and enhancing trust in your brand.

Customers are increasingly expecting companies to be transparent in how they source their raw materials and energy, their sustainable development goals, as well as making efforts wherever possible to minimise greenhouse gas emissions, water consumption and other environmental impacts of production.

This makes it clear that brands have a great incentive when it comes to reducing their environmental footprint – doing so also creates marketing opportunities for businesses.

By investing in environmentally friendly processes, materials and projects, brands significantly increase the likelihood of enjoying a return on investment in terms of both revenue and increased customer loyalty.

Today, consumers are demanding their favourite brands to think and act more responsibly in regard to the environment and develop a stronger sense of corporate social responsibility.

This societal shift is necessitating corporations to change their practices, policies, and end products to better conform with values such as sustainability, renewable energy sources, and carbon-neutral product manufacturing.

Companies that don’t meet these demands stand a real risk of losing customers due to an overall lack of trust.

In recent years, greenwashing has emerged as a major issue for corporate social responsibility and sustainability initiatives. This is when a business erroneously presents itself as more environmentally-friendly than it really is.

Many companies have embraced the ‘green’ lifestyle to appear innovative and conscious of their environmental footprint – without actually investing in meaningful change. This false narrative can hurt the reputation of genuine businesses striving for positive environmental sustainability outcomes, undermining efforts to reduce environmental impact sincerely and ethically.

Ultimately, an animal against this type of deception can not only shame the offenders but also encourage legitimate sustainability principles that truly make a difference.

What is Greenwashing?

Greenwashing is the practice of companies manipulating public perception to make themselves appear more environmentally friendly than they actually are.

This deceptive behaviour often occurs when companies make exaggerated claims about the environmental benefits of their products or services, even though their production processes or business practices harm the environment.

Companies engaging in greenwashing tactics also use vague language to mislead consumers into believing that their products are greener than they actually are.

This tactic aims to appeal to consumers who want to purchase items with lower impacts on the planet, but it fails to provide any tangible information about the product’s environmental friendliness.

The EPA states that “It’s important for consumers to be careful in interpreting vague or generic claims on products such as “environmentally friendly,” “eco-safe,” or “green”. When these claims are found to be misleading or inaccurate, this is referred to as greenwashing.”

Greenwashing paints an inaccurate picture of how much harm a company’s products may cause, hiding important details that are necessary for making informed decisions as an environmental consumer.

It also has ripple effects on the environment because it produces a false sense of progress, deflecting attention away from real improvements that can be made. By doing this, greenwashing only serves to create an increasingly uncertain future for our planet.

Unfortunately, greenwashing can be difficult to detect if consumers do not conduct proper research as false claims of sustainability can have a powerful emotional appeal.

To prevent organisations from misleading customers, it is important for them to adopt rigorous eco-labelling standards and disclose transparent information about their practices and products.

Why Are These Brands Greenwashing?

In order to prevent major changes to their current operations and structures, companies of all sizes are willing to go the extra mile to put on a ‘greenwashing’ facade.

By framing marketing campaigns under positive environmental narratives, companies such as those in the fossil fuel industry manage to reframe their practices as sustainable without having to actually make any changes.

Other industries greenwash in order to present viable solutions that look good in comparison with other alternatives, such as charging for carbon offsets with aviation companies.

In all cases, greenwashing serves to evade deeper scrutiny and potential criticism by presenting products as eco-friendly when they have little tangible evidence of being so.

Major Brands That Have Been Guilty of Greenwashing

As greenwashing becomes mainstream in 2022, various entities enter the greenwashing landscape. From airlines to automotive companies, greenwashing is pervasive and efforts are being made by companies to appear environmentally friendly and sustainable.

Consumers are becoming more conscious of greenwashing trends and scrutinising green marketing messages for authenticity, which has forced greenwashing companies to invest further in research and technology that backs their green claims.

As we progress through 2022, various greenwashing companies will be featured prominently on top of sustainability rankings, as consumers look past eco-friendly packaging and endorsements when evaluating how green a company really is.

Here are some of the greenwashing examples from leading brands that have been caught out:

1. McDonalds

McDonalds is certainly on board with being more eco-friendly. But unfortunately, their switch from plastic to paper straws came with a few hiccups.

Paper straws were made thicker as customers complained they couldn’t finish their drinks, although this means that the new ones are much more difficult to recycle.

To make matters worse, Mcdonald’s initially suggested that these straws should just be thrown in the bin, something which would not be helping the Earth at all.

2. The Australian Superannuation Industry

According to not-for-profit Market Forces, Australia’s major super funds have been found to be engaging in greenwashing practices.

These funds present their investments as ‘sustainable’ or ‘socially responsible’ when, in fact, upon closer examination, a significant proportion of the investments were discovered to be geared towards furthering the expansion of the fossil fuel sector.

The analysis also revealed that there are no explicit criteria used to define what is considered a ‘green’ or ‘responsible’ investment within these so-called sustainable products – leaving investors misinformed and at risk of unsustainable investment exposure.

“Our analysis reveals these so-called ‘sustainable’ options aren’t living up to what they claim to be, but are merely exercises in greenwashing,” Market Force’s campaigner Brett Morgan said.

3. General Motors

General Motors’ “Gas-Friendly to Gas-Free” campaign was an ambitious effort to reposition the company as eco-friendly, but it has been overshadowed by its continued production of gas-guzzling vehicles.

This controversy arises from how much the company has focused on advertising green technologies while still heavily investing in cars that leave a negative environmental impact.

Chevrolet’s green initiatives have been widely disseminated across commercials, print ads and their website. These include increasing fuel efficiency, producing vehicles designed for E85 ethanol, and investing in electric hybrids, plug-in hybrids and fuel cell technology.

While this rebranding effort is laudable and should commend GM for its environmental strides, the reality is that much remains to be done when observing its current output.

4. ExxonMobil

ExxonMobil’s failure to align with the Paris Agreement temperature goals is a stark reminder that the company has yet to take meaningful action in order to reduce its overall GHG emissions.

The recently released Climate Action 100+ Net Zero Company Benchmark found that ExxonMobil not only lacks the ambition to reach net zero, but fails to set short, medium, and long-term GHG reduction targets which sufficiently cover all emissions or create a clear path forward.

This is not surprising considering ExxonMobil’s proposed 2025 targets have been widely seen as inadequate and do not account for its Scope 3 emissions, which are responsible for the bulk of its climate impacts.

5. Coca-Cola

Despite the many climate-conscious commitments Coca-Cola has made in recent years, such as committing to making 50 per cent of their packaging out of recycled materials by 2030, revelations from Break Free From Plastic’s 2022 annual audit confirm that the global drinks company is still far from meeting these goals.

Unfortunately, it has been revealed that Coca-Cola is the worst plastic polluter for the fifth year in a row. It’s an embarrassing fact considering their current sponsorship of COP27 in Egypt. Other corporations who have landed on Break Free From Plastic’s top five list include Mondelez International, Unilever, Nestle, and PepsiCo.

“Instead of allowing companies like Coke to greenwash their image, governments need to compel polluters to invest in reuse and alternative product delivery systems that avoid the problem in the first place,” global coordinator for Break Free From Plastic Von Hernandez said.

6. Toyota

Toyota has recently been held accountable for its decade-long failure to comply with the Clean Air Act’s emissions-reporting requirements. The US Department of Justice has stated that the company will be required to pay a penalty of $180 million for these violations.

During the 2005-2015 timeframe, Toyota delayed fulfilling mandatory filings regarding emissions defects and neglected to properly inform the EPA of progress made on emission-related recalls. These practices have not only increased toxic exhaust released into the atmosphere but also cost consumers more money while simultaneously increasing Toyota’s profit margin.

“Toyota’s conduct likely resulted in delayed or avoided recalls, with Toyota obtaining a significant economic benefit, pushing costs onto consumers, and lengthening the time that unrepaired vehicles with emission-related defects remained on the road,” the US Department of Justice said in a media statement.

What is Being Done About Greenwashing in Australia?

Global investigations have revealed as much as 40 per cent of environmental and sustainability claims made by businesses may be deceitful, highlighting the need for greater regulation and transparency in the industry.

The Australian Competition and Consumer Commission (ACCC) is cracking down on companies responsible for greenwashing and will be reviewing companies’ marketing claims and policing them.

If firms are found to be making false or misleading claims, they could face considerable penalties.

According to Commission Chair, Gina Cass-Gottlieb, more and more customers are basing purchasing decisions on sustainability credentials. Therefore it is imperative that these claims are truthful in order to preserve consumer trust and create a fair competitive market.

Furthermore, she noted that such fraudulent practices have the potential to disincentivise legitimate companies from making real sustainable changes or investments.

The ACCC’s recent decision to issue its first penalty for greenwashing by fining Tlou Energy $53,280 reflects their increasing focus on cracking down on the practice of greenwashing.

TLOU, which developed power projects in Africa, paid a total of four infringements in October last year for making alleged false or misleading sustainability-related statements to the ASX.

Whilst Tlou Energy was the first company to be penalised for greenwashing, the Australian Securities & Investments Commission (ASIC) has initiated investigations into other listed entities in relation to their green credentials.

ASIC deputy chair Sarah Court warned that this first round of fines showed that companies that promote their green credentials and sustainable operations must be able to support their statements.

“ASIC is currently investigating a number of listed entities, super funds and managed funds in relation to their green credentials claims,” she said.

Also read: What Will Be The Value Of Recycled Metals By 2025?