What is Greenwashing and how does it work


In the business world, green credentials are the key for companies to be competitive, something that has pushed businesses to be more environmentally friendly. However, going green requires a considerable amount of resources, time, and risk. In this post we tell you what Greenwashing is and how it works.Don’t miss it!

Index of contents

  • What is Greenwashing?
  • How does Greenwashing work?
  • How to avoid Greenwashing?

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Many companies take into account the critical issues involved with sustainability and green (for example, how they can make greener products without sacrificing quality). With this, the top business positions face two things:

  • How to be greener with your resources?
  • How to comply with the eco-label without using Greenwashing?

Index of contents

What is GreenWashing?

Greenwashing is a company’s attempt to make its products look green when in fact they are not. Unfortunately, this practice is prevalent in many industries, from textiles and cleaning products to beauty and food products.

The examples of greenwashing include companies trying to take advantage of certain buzzwords in ads and on product labels as ‘sustainable’, ‘green’ and ‘natural’. This practice is detrimental to the company if consumers know how to dig a little deeper and discover the truth, which does not happen as often as we might think. The only way to discern the reality behind the claims is to educate yourself on how Greenwashing is used.

How Greenwashing Works

While the Volkswagen case is extreme, it is part of a growing trend for companies to claim more about their environmental efforts. This can take a form of advertising irrelevant features or information, leading consumers to think that they are helping the environment. many companies are guilty of the diffuse form of eco-washing reports. What’s the score? Stakeholders remain poorly informed about the social and environmental performance of their companies.

However, green initiatives benefit businesses, few things can sink a business as quickly as bogus green initiatives. Bad practices such as Greenwashing also affect businesses, which must take into account several risks: today, many NGOs are looking very carefully at what companies are doing and consumers are much more active and aware of the practices of the company with respect to the environment.

For this reason, people who are running a business must realize that an environmental stance is very difficult to fake (especially when your company belongs to an environmentally sensitive industry), and that only genuinely green credentials are effective when building a profitable and lasting corporate image.

How to avoid Greenwashing?

Several companies have successfully altered their unsustainable practices or followed a successful green agenda from the start, such as the Patagonia brand, whose longstanding commitment to the environment dates back to its roots.

In this case, one of the best-known initiatives of this brand was the Green Marketing campaign “buy less”, which actively advised people not to buy what they do not need. The company had already launched the common yarns initiative earlier this year, seeking to embrace the concept of ‘Reduce, Repair, Reuse, Recycle, Reimagine’, encouraging a partnership between Patagonia and its customers to buy and wear more sustainable clothing.

Although Patagonia appears to want to achieve two conflicting goals, to have a profitable company and to expose materialism and consumerism, the company’s success challenges traditional business models. The ‘ profitable asset ‘ idea , which is built into its core business model, has driven its value proposition.

Here we recommend several steps to follow published by Forbes magazine:

# 1 Define the meaning of sustainability for your company. This first step is crucial to developing a realistic and relatable sustainability strategy. Identify how sustainability fits into your company’s supply chain and how it relates to how value is created. For example, for a food company like Mondelez, sustainable food sourcing makes sense: not only does it “green” its products, it also ensures future access to resources that are critical to the company’s manufacturing process and survival. general.

# 2 Ensures the commitment of the entire company. Real change can only go from the inside out. The board of directors and the CEO are essential to provide leadership that helps all stakeholders participate.

# 3 Set goals and monitor results. You need to accept some tradeoffs between financial and sustainability results. Therefore, it is vitally important to ensure that the strategy objectives define the best metrics to measure results. Once the goals are clear, closely monitor your sustainability efforts. Metrics must be clear and report comprehensively and transparently at all times.

# 4 Align your corporate governance structure. The interests of owners and managers must be aligned with good corporate governance structures and compensation policies.

# 5 Dialogue with customers and stakeholders. Two-way communication is key. Ikea is a positive example of this, having established a social and environmental coordination group that engages with forestry organizations, transportation and distribution companies, as well as its own suppliers to find ways to minimize the impact of their operations. Furthermore, since Ikea enjoys enormous economies of scale and market power, the company is in a position to influence the behavior of all its various supplier groups.

# 6 Collaborate with NGOs. It’s always good to work with interest-based partnerships that can benefit both parties.

Going green can be a source of competitive advantage for companies and is a long-term strategy worth pursuing.

However, when pursuing a green agenda, business leaders must first be realistic and make commitments. Businesses that try to cut corners through Greenwashing will see their profits shrink.

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