10 Ways Companies Can Get in Trouble with Greenwashing
Greenwashing is the practice of making exaggerated or misleading claims about a product or service's environmental benefits, with the intention of deceiving consumers. Many companies have been caught in the act, leading to negative publicity and damage to their reputation. Here are ten ways companies can get in trouble with greenwashing, with real-life examples of each.
- Making vague or undefined claims: Companies can get in trouble by using terms like "eco-friendly" or "sustainable" without clearly defining what they mean. The Federal Trade Commission (FTC) has strict guidelines for green marketing claims, and vague statements can be considered deceptive. In 2013, Lululemon faced backlash for claiming its yoga pants were made with "seaweed fiber," which was actually just a small percentage of the material.
- Focusing on one small aspect of sustainability: Companies can also get in trouble by making claims about one small aspect of sustainability, while ignoring larger issues. In 2011, Fiji Water was criticized for promoting its carbon-negative status, while ignoring the environmental impact of shipping bottled water from the South Pacific to the US.
- Overstating or exaggerating environmental benefits: Companies can't make claims that are not supported by evidence. In 2009, Frito-Lay was sued for claiming its chips were biodegradable, when they were not.
- Failing to back up claims with evidence: Companies must have scientific evidence to support their green claims. In 2010, the FTC fined Kmart for making false claims about the environmental benefits of its American Fare line of paper products.
- Claiming a product is "certified" without disclosing the details: Companies can get in trouble by claiming a product is "certified" without disclosing who did the certification or what the certification process entailed. In 2014, Walmart was criticized for promoting its Great Value brand of organic eggs, which were certified by an organization that Walmart had created.
- Using false or misleading imagery: Companies can't use images or symbols that suggest environmental benefits that don't exist. In 2008, the FTC warned six companies about using a fake environmental certification seal that suggested their products had third-party endorsements they did not have.
- Using unverifiable claims: Companies can't make claims that can't be verified. In 2015, Volkswagen faced a scandal when it was discovered the company had used software to cheat on emissions tests in its diesel cars.
- Ignoring larger sustainability issues: Companies can't make sustainability claims while ignoring larger issues related to their business practices. In 2018, Tesla faced criticism for promoting its green energy mission, while also facing allegations of poor worker conditions.
- Using deceptive packaging: Companies can't use packaging that suggests environmental benefits that don't exist. In 2019, Nestle faced criticism for packaging its Poland Spring water in bottles that looked like they were made from recycled plastic, when in fact they were not.
- Using irrelevant or outdated claims: Companies can't use claims that are no longer relevant or that have been disproven. In 2020, The North Face faced criticism for claiming its clothing was "100% recycled" when in fact only a small percentage of the material was recycled.
Greenwashing can lead to serious consequences, including loss of consumer trust, legal action, and damage to a company's reputation. Companies must be transparent and honest in their environmental claims to avoid getting in trouble with greenwashing.
Over 90 public companies and 70 non-profit organizations use Socialsuite for tracking and reporting on their impact. With the help of our ESG software and expert team, businesses can easily get started on impact reporting, disclose faster, and save money compared to traditional methods. Whether you're new to impact reporting or looking to enhance your current practices, Socialsuite offers the tools and expertise needed to achieve your sustainability goals. Contact us to learn more about our solutions.