Can advertising be saved from greenwashing? Part 1

In a two-part article, we’re going to understand if advertising can be saved from “greenwashing”. The first part will explain what “greenwashing” is and how green claims work. The second part will then understand why “greenwashing” is a problem and – most importantly – if and how we can solve it.

In 2020, a study conducted by the European Commission revealed that over half of the green claims made by companies in the EU were “vague, misleading, or unfounded”, with 40% lacking any substantiation whatsoever. In response, the commission has introduced a series of directives, including the “Green Claims Directive” in early 2023, which compels companies to provide evidence to support any green claims or face “dissuasive” penalties. Regarded as the most comprehensive and ambitious directive of its kind to date, this regulatory measure is part of a global movement among governments to combat “greenwashing”, increasingly viewed as a key impediment to achieving a successful ecological transition. While some view the regulation positively, others argue that it may fall short of effectively addressing the persistence of greenwashing in the advertising industry.

What is greenwashing? 

The term “greenwashing” emerged in the mid-1980s alongside the rise of green claims made by companies seeking to address growing public concerns about the environment. It is believed that U.S. activist Jay Westerveld coined the term in a 1986 essay, wherein he criticised hotel chains for prioritising cost-cutting "save-the-towel" campaigns over meaningful efforts to reduce their environmental impact. During this early period, the focus of greenwashing criticism primarily centred around for-profit businesses that employed deceptive practices such as making false green claims, omitting environmental information, and utilising vague and ambiguous terms like “natural”, “local”, “durable”, “clean”, “green”, “better”, and “offset”.

During the late 2000s, as the volume of green claims continued to rise, and scrutiny from governments, media, and non-governmental organisations (NGOs) intensified, the criticism of greenwashing underwent a significant evolution, encompassing more subtle tactics. These include:

1. Executional greenwashing: This refers to the use of nature-inspired imagery to create an impression of environmental friendliness. For instance, an ad featuring a peaceful forest setting accompanied by the sounds of singing birds may give a false impression of eco-consciousness.

2. Greenwashing by assimilation: This type of greenwashing involves using terms that are misleadingly equated with environmental concerns. Companies may use terms like "digital," "electric," or "second-hand" to falsely suggest ecological benefits that may not necessarily be present.

3. Greenwashing by association: In this form of greenwashing, companies leverage their sponsorship of environment-focused events, projects, or programs or associate themselves with individuals or organisations perceived to have strong environmental credentials. These associations create the impression of eco-friendliness without necessarily reflecting substantive environmental action. 

The critique of greenwashing expanded beyond companies and their products to encompass a wide range of individuals and entities, including celebrities, politicians, administrations, governments, and even NGOs. This broadened scope prompted the development of a more inclusive definition of greenwashing, which can be understood as the disconnection between claims made about environmental practices and the actual reality of those practices.

Although greenwashing can stem from opportunistic motives, it can also be employed by companies that more genuinely believe in their environmental commitment, albeit excessively promoting their sustainability credentials. As businesses start to engage, there is a tendency to eagerly share positive news, sometimes leading them to prioritise talk over action.

However, most consumers face challenges in accurately assessing the disconnection between environmental claims and actual practices, largely due to limited access to information about the latter. Consequently, distinguishing genuine green claims from greenwashing becomes a complex task for most consumers. Their responses to such claims often rely on their preexisting beliefs and expectations concerning the environmental practices of companies.

How do green claims work?

At the corporate level, the fundamental objective of green claims is to bolster or preserve a company's reputation by strengthening the association between the company and positive environmental values in the minds of consumers. This phenomenon operates through two key mechanisms: 

1. Emphasizing environmentally responsible attributes creates the perception that the company offers greater benefits compared to its competitors. By promoting their commitment to sustainability, companies aim to position themselves as superior choices, appealing to consumers who prioritize environmental considerations in their decision-making.

2. Incorporating visual representations of nature evokes pleasant emotions akin to those experienced during actual contact with the natural world. This positive emotional response is then transferred to the company.

By leveraging these mechanisms, green claims are anticipated to have a positive influence on a company's reputation, product perception, recruitment endeavours, and, ultimately, financial gains.

The effectiveness of green claims remains nevertheless not so straightforward. Consumers' favourable evaluation of a company is contingent upon perceiving the company's environmental commitment as sincere and credible. Consequently, the effectiveness of green claims is heightened when the company's environmental dedication meets the following criteria:

1. Consistency and Longevity: Consumers are more likely to respond positively to green claims when a company's environmental commitment has been demonstrated consistently over a significant period.

2. Core Business Focus: A company's environmental commitment carries more weight when it is integral to the core operations of the business, rather than being seen as an ancillary activity or afterthought.

3. Independent Corroboration: Green claims gain credibility when they are supported by neutral, independent sources that can verify the company's environmental efforts.

4. Significant Investment: Consumers are more inclined to trust green claims when a company allocates a substantial amount of financial resources to its environmental initiatives, especially when compared to how much the company spends to advertise the initiatives.

5. Factual and Precise Formulation: Green claims that are communicated in a clear, specific, and factual manner resonate more effectively with consumers compared to vague and general statements.

6. Advertising Platforms: Green claims are better received when they are promoted through media channels that consumers perceive as less harmful to the environment, such as direct mail, catalogues, brochures, and in-store posters, rather than platforms associated with greater environmental impact, such as newspapers, magazines, mobile phones, outdoor posters, radio, television, cinema, and the Internet.

Moreover, the responses of consumers to green claims are also shaped by their individual characteristics. Consumers' objective knowledge about environmental issues can play a crucial role in enabling them to identify instances of greenwashing. Similarly, a general tendency among consumers to be sceptical of advertising undermines the effectiveness of green claims. Meanwhile, no consensus emerges regarding the influence of consumers’ environmental concerns: While some studies suggest that environmentally concerned consumers are inherently vigilant about environmental attributes, and so may not necessarily exhibit a more favourable response to green claims, others find that they would be more receptive to green claims. 

Lastly, research indicates that time plays a crucial role in understanding the effectiveness of green claims. In earlier periods, when only a limited number of companies emphasised their commitment to the environment, green claims served as a notable and positive signal. However, as the landscape has evolved and an increasing number of companies now assert their interest in environmental responsibility, the impact of such claims has diminished. Consequently, green claims have experienced a significant loss of credibility and are met with growing scepticism.