Greenwashing: Have Companies Been Profiting Off Your Ignorance?
Think of just a few of the most recognisable brands in the world, now imagine all the attention that they have. With so much attention, these companies are usually subjected to the public’s scrutiny, including mine. Rightfully so, governments around the world are starting to crack down on companies’ false commitments to the environment, also known as greenwashing.
In this blog, we consider the products you have been consuming and how there exists a battle for balance between government and corporations. We are exploring if some of the most well-known companies, internationally, have met the Government’s standards and what you should be aware of when purchasing a product from a company.
Government Intervention
In the UK the government has taken an approach to a sustainable and environmentally rooted economy. It aims to get private capital towards sustainable ones and to support green products and services. Making it so, financially, their economy is resilient to environmental risks.
This is the Green Finance Strategy (GFS) and requires companies to disclose their strategy, risk management and use of metrics relating to their sustainability and climate risks. The GFS represents the latest policy blueprint developed by the government. These disclosure thresholds (determining which companies must comply with reporting obligations) can be found in the Companies Act 2006.
Simply put, public policy can be viewed as soft law, where regulation policy acts as guidance. In contrast, an Act of parliament is hard law, where it is strict and holds more legal power. So for example, the government's public policy is a promise for change, in this case, the promise to ensure that the UK will achieve net-zero carbon emissions and a sustainable economy. An Act is where the law is enforced, where we promise the government to abide by the law. Hence, this is where a balance is struck, both the government and companies promise to be sustainable.
Public bodies such as the Competition and Markets Authority (CMA) have introduced climate-related disclosure requirements and have taken action against companies that have engaged in misleading practices, including greenwashing. Ensuring that environmental claims comply with the law. As a consumer yourself, being misled by false advertising could lead to legal consequences for the companies that are profiting off your ignorance. You shouldn’t have to pay a premium for falsely labelled green products.
Greenwashing
As a student or generally a consumer, you have many options to choose from. Some of you may even narrow down your choices based on the company's green and sustainable promise and usually, this is more expensive. What the Green Finance Strategy does is that it ensures that your investment into these products is truly green and sustainable, rather than just being marketed as such, this is what Greenwashing is. It is a false claim to trick consumers like yourself into believing that the products you buy are environmentally friendly when they are not.
Hence, the question becomes, are you a victim of greenwashing?
Were the Goods You Bought Green?
The CMA has the same question in mind, hence they started looking into the fashion industry, and the clothes you wear. So far as of last year suspects are ASOS, Boohoo, and Asda who all have green collections in the UK.
They are charging higher prices for these collections, using your money on themselves instead of our planet. In the Netherlands, the Authority for Consumers and Markets (ACM) looked into H&M and found that it advertised its products using the term "Conscious," without indicating the sustainability benefits of products labelled "Conscious”.
In America, Walmart (where some of you might have done your shopping) has been advertising and selling “bamboo” products when it was made of rayon. Converting bamboo to rayon “requires the use of toxic chemicals and results in hazardous pollutants,” mentioned in an article by the Federal Trade Commission.
“Converting bamboo to rayon requires the use of toxic chemicals and results in hazardous pollutants”
How about the sodas you consume?
In 2021 an environmental organisation (Earth Island), sued Coca-Cola for lying about being environmentally clean and sustainable, while in truth it remains the world’s biggest polluter of plastic.
Surely not your furniture too right?
Wrong, 2020 research by an NGO (Earthsight) discusses IKEA’s illegal timber problem and the flawed green label behind it. The report mentioned that IKEA’s wood supplier was guilty of greenwashing and illegally importing wood for Ukraine, additionally, the company uses 21 million metric cubic metres of wood, contributing to deforestation.
Issues with Clamping Down on Companies
As public bodies try to clamp down on greenwashing, it has become the focus of problems for companies. With so many people attacking sectors such as energy to buckle down and be green, it drives the focus away from companies to be more efficient and in turn, they spend more time meeting the requirements of the ACM or CMA. This takes time due to the prescriptive nature of what and how one should disclose their practices.
Overall, putting pressure on meeting these requirements causes many of these companies to be overwhelmed. Additionally, when companies are so caught up in trying not to get caught by these public bodies, they lose focus on actually being green and sustainable. Moreover, with further requirements, the market becomes more regulated making it more inefficient, costly, and perhaps unfair. However, you could also argue that companies ‘shoot themselves in the foot’ by even advertising these sustainable options, putting themselves in the spotlight for public bodies like the Advertising Standards Authority in the UK to investigate.
A Call to Action
While you probably have bought products from companies that have been greenwashing, there is nothing to feel bad about. You can start by doing your research, before putting your money into a company's green cause you should check if they have any greenwashing allegations or join an NGO such as Earthsight or Earth Island that has been cracking down on these companies.
Lastly, for any visual impairments listen to this blog here. Thank you.
Eliott Liau
Secretary General of ELSA Birmingham
2023/2024
