The Crackdown on Greenwashing is Heating Up

In 1986, environmentalist Jay Westerveld coined the term “greenwashing” when he slammed the hotel industry for exaggerating their reuse towels policies as part of their broader ‘green’ focus. Thirty-five years later, we are still battling the urge to greenwash. Fortunately, with the adoption of blockchain and AI technology solutions to monitor sustainability, we are beginning to see evidence-based green corporate policies.

Spreading misleading messages about a company’s environmental activities, aka greenwashing, is no longer a trend but a threat to a brand’s reputation. Throwing environment jargon into a caldron of marketing spin will raise eyebrows and not in a positive way.

Web 3.0, including blockchain technology and artificial technology, are being used to sift through the communication and decipher between credible environmental activities rather than the companies that are all talk and no action with the eco-friendly initiatives.

The Task Force for Climate-Related Financial Disclosures (TCFD) recently created an AI tool named ClimateBert, that deconstructs corporate marketing material and reports to assess real-time activities. After one study of over 800 companies. It found that companies are talking a good talk but doing very little.

The TCFD is pushing for greater transparency when it comes to green initiatives proposed by companies. It recommends companies “disclose how the organisation identifies, assesses and manages climate-related risks” and also “disclose the metrics and targets used to assess and manage climate-related risks”.

In January this year, the European Commission and national consumer authorities carried out a sweep of websites to identify possible breaches of EU consumer law in relation to greenwashing and found that 42% of claims were exaggerated, false or deceptive. It is now looking more likely that businesses will be required to substantiate claims they make about the environmental footprint of their products/services.

Why do Companies Greenwash?

Simply put, it is easier to promote an eco-friendly initiative than actually carry out the hard work, skills and cost of being truly eco-friendly. There are two reasons why companies have been greenwashing their way into media headlines.

Number one is that going green is the biggest trend sweeping the planet. The global market for sustainability is projected to reach over $48 billion by 2027. Ever-increasing concerns amongst the Gen Z population paired with the surge in awareness about Climate change makes going green a clever brand awareness strategy for companies.

Not only are we dealing with more conscious consumers, but we are also dealing with informed decision-makers. The desire by individuals and investors to be associated with environmentally conscious businesses has led to a growth in creative marketing campaigns associated with ESG activities, climate change solutions and ‘green’ projects that will reflect well on the brand image.

Second is the lack of operational capacity to adopt truly green policies. Nobody says that being environmentally friendly is easy. For some companies, it nearly seems impossible and very few companies can employ the skills, materials and management required to be an all-encompassing eco-friendly business. Greenwashing becomes the ultimate temptation. This is why more and more companies adopt a carbon credit policy where they can show that they are giving back where they fall down.

Blockchain Busting Greenwashing

Blockchain technology is playing a vital role in tracking companies who are going green, and projects like Regen Network are incentivising companies to become carbon friendly. Another example is Artistic Fabric Mills that is adding traceability technology to its processes by registering a digital twin of its yarn fabric on a secure public blockchain via Aware. This way, all aspects of the supply chain can be tracked, and companies can engage in meaningful CSR initiatives.

Al Gore recently described Greenwashing as a rising threat in the fight against climate change. However, the fact that companies are actively thinking about climate-related initiatives and incorporating environmental values into their business activities should be seen as a positive force for good. The hope is that companies engaged in Greenwashing will adopt new technology to move towards an honest, greener future.

Lisa Gibbons, Contributor

A self-starter, blockchain advocate with a love for creative writing. Lisa began writing about post-colonial identities in 2012 and has kept up her love for the written word. She is a digital marketer by day, crypto trader by night and loves helping to help drive innovation in green blockchain projects. She enjoys writing poetry, foraging for wild foods and scrolling through NFT’s in her spare time.

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Prepared by Suzanna Hayek