Knowledge nugget of the day: Greenwashing

Key Takeaways:

1. Greenwashing refers to the growing tendency of companies, organisations, or even countries to make dubious or unverifiable claims about their activities, products, or services being environment-friendly or climate-friendly. Due to heightened sensitivity to climate change, there is rising pressure on corporations and governments to carry out their activities in a way that causes the least damage to the environment.

2. Greenwashing presents a false picture of the progress being made on the climate change front, thereby pushing the world towards disaster, while at the same time rewarding entities for irresponsible behaviour.

3. The 2015 Volkswagen scandal, in which the German car company was found to have been cheating in emissions testing of its supposedly green diesel vehicles, is one of the headline-grabbing examples of greenwashing. Several other big corporations, including Shell, BP, and Coca Cola have faced accusations of greenwashing.

4. Countries too, are sometimes accused of greenwashing, for example, when they exaggerate their forests’ potential to absorb carbon dioxide and the impact of a new regulation on carbon emissions. Carbon trading mechanisms, an otherwise legitimate exercise, often come under scrutiny because the processes followed in the generation of credits for trade might not be scientifically robust.

5. The processes and products that can potentially cut emissions are so many that it is practically impossible to monitor and verify all. There is a lack of regulation and standardisation in most of these spaces. The processes, methodologies, and institutions to measure, report, create standards, verify claims and grant certifications are still being set up.

Extinction Rebellion (XR) greenwash march in Glasgow. (Wikimedia Commons/Stay Grounded)

Guidelines on preventing greenwashing

* Use of misleading words, symbols, or imagery, emphasizing positive environmental attributes while downplaying or concealing negative aspects would constitute greenwashing.

* If a company, for example, makes the statement that its growth is based on “sustainable principles”, it would not be treated as a misleading environmental claim for the purposes of these guidelines. However, if the company claims that all its products are manufactured sustainably, then it will be examined for greenwashing.

* The Generic terms like “clean”, “green”, “eco-friendly”, “good for the planet”, “cruelty-free”,  “carbon neutral”, “natural”, “organic”, “sustainable”, or similar other descriptions for a product would be allowed only if the company is able to substantiate these with evidence. The company will also have to use “adequate and accurate” qualifiers and disclosures while advertising such descriptions.

* When more technical terms such as “environment impact assessment”, “greenhouse gas emissions”, or “ecological footprint”, are used to advertise a product or service, the companies would be mandated to explain their meaning and implications in a “consumer-friendly” language.

* The guidelines will apply to all environmental claims made by manufacturers, service providers, or traders whose goods, products, or services are the subject of an advertisement, or to an advertising agency or endorser whose service is availed for the advertisement of such goods, products, or services.

Types of Greenwashing

📍Greenhushing: When a company or firms underreport or withhold information about their sustainability goals and progress.

📍Green-crowding: It involves hiding in a group or crowd to avoid their unsustainable practices to be spotted.

📍Greenshifting: It is an act of the company to shift the responsibility of adopting sustainable measures on consumers or individuals rather than having to take meaningful action at the corporate or brand level.

📍Greenlighting: It occurs when a company spotlights a specific sustainability initiative undertaken by it to distract attention away from damaging activities.

📍Greenlabelling: It is a marketing tactic adopted by companies to label their products something green or sustainable, but closer examination reveals this to be misleading.

BEYOND THE NUGGET: Carbon Credit 

1. The trade-in carbon credits come under the scanner in any discussion on greenwashing. Carbon trade is a legitimate exercise. The carbon markets were set up under the Kyoto Protocol which had prescribed emission reduction targets for a group of developed countries.

2. For example, an industrial unit that outperforms the emission standards stands to gain credits. Another unit that is struggling to attain the prescribed standards can buy these credits and show compliance with these standards. The unit that did better on the standards earns money by selling credits, while the buying unit is able to fulfill its operating obligations.

3. One tradable carbon credit is equal to one tonne of carbon dioxide or the equivalent amount of a different greenhouse gas reduced, sequestered, or avoided. Once a credit is used to reduce, sequester, or avoid emissions, it becomes an offset and can no longer be tradable.

(Source: Greenwashing guidelines, Red flags over ‘greenwashing’, Carbon markets)

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