Corporate Greenwashing discovered in new survey

More than 4 in 10 businesses have seen evidence of greenwashing by companies operating in Ireland, and a further 2 in 10 are uncertain in their ability to discern authentic green initiatives from mere greenwashing practices, according to a new survey released by the Compliance Institute.

Corporate Greenwashing

The nationwide survey of 166 organisations, comprised chiefly of compliance leaders in large financial organisations around the country, sought to gain an insight into awareness of greenwashing practices in the corporate sector and the inherent risks and challenges it poses to progress on tackling some of our most pressing environmental issues.

Speaking of the findings, Michael Kavanagh, CEO of the Compliance Institute,

“Our survey attests to a high level of greenwashing activity of varying degrees witnessed in the Irish marketplace, with 43% of respondents saying they have seen evidence of the practice by firms operating in Ireland – a strong observation gave that a further 23% weren’t clear on the difference between genuine green practices and greenwashing. Just 34% of those surveyed were confident that they hadn’t seen this in practice.”

Greenwashing can be summarised as the attempt by companies to present their products and activities as environmentally friendly, when in fact there is no real quantifiable basis for this claim.

Mr Kavanagh commented,

“Unfortunately, we are seeing that, in companies of all sizes, many ‘green’ references are simply marketing aids rather than measurable, environmental initiatives. In many cases, this is not an attempt by the company to mislead but rather an inaccurate understanding of what standards must be met to authentically describe something as a green practice.

Almost one-quarter of respondents weren’t certain that they understood what greenwashing actually means in practice, which I think might be indicative of a wider issue in the general public – lots of people simply don’t understand this new term and what it might mean for them either in a business capacity or as a consumer when purchasing goods and services. Greater education on this relatively new phenomenon is probably needed.

Clearer, more streamlined definitions would be helpful along with the introduction of enforceable standards so that organisations that truly are green are easily recognised. There are of course cases, however, where the motivations could well be more deceptive.”

Mr Kavanagh warned,

“Greenwashing is harmful on a variety of levels – it misleads the consumer, the investor and other stakeholders, and it also overshadows the genuine efforts made by other organisations who may not receive the same level of acknowledgement for their efforts in implementing sustainability initiatives.

Of course, not all organisations will be able to reach the same level of “green” – but we need to be able to identify those that are making a real effort within their own organisational constraints and those that are not. To aid this, clearer, more streamlined definitions would be helpful along with the introduction of enforceable standards so that organisations that truly are green are easily recognised.”

The compliance Institute have pointed to two key elements of the “greenwashing challenge” that need to be addressed.

Mr Kavanagh explained,

“Firstly, we must ask why the practice exists within an organisation? Is it because of a genuine lack of understanding, or is it more ominous in that it’s a deliberate attempt to mislead people? Some businesses might believe that having a relatively good CSR strategy amounts to being able to class themselves as a green organisation. But unless this strategy is specifically focused on climate change measures and being eco-friendly, then their assumption is incorrect.”

Mr Kavanagh concluded,

“If nothing else, organisations need to realise that the reputational damage that could be caused by being found to be greenwashing goes way beyond any financial penalty that could be imposed.

Ultimately, “greenwashing” is the virtue signalling of the corporate world and it hurts us, all as the practice inevitably leads to a less green economy. If the practice continues and indeed if it is allowed to become more prevalent, then it will lead to widespread mistrust on the part of the consumer – meaning that they won’t believe even the most genuine efforts made by authentically green organisations.”