{"id":13724,"date":"2025-11-17T17:25:56","date_gmt":"2025-11-17T15:25:56","guid":{"rendered":"https:\/\/www.getsmarter.com\/blog\/?p=13724"},"modified":"2025-12-03T18:39:22","modified_gmt":"2025-12-03T16:39:22","slug":"what-is-greenwashing-how-does-it-impact-csr","status":"publish","type":"post","link":"https:\/\/www.getsmarter.com\/blog\/what-is-greenwashing-how-does-it-impact-csr\/","title":{"rendered":"Greenwashing: How to spot and stop false sustainability claims at your organisation"},"content":{"rendered":"\n

Shoppers are putting their money where their values are, creating a powerful economic incentive for businesses to prioritise environmental, social, and governance (ESG) goals.<\/p>\n\n\n\n

64% of consumers believe that companies have a responsibility to solve climate and environmental issues.1<\/sup> These commitments align with broader international efforts, such as the United Nations\u2019 Sustainable Development Goals (SDGs), which call for urgent action to create a more sustainable world.<\/p>\n\n\n

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Casting a company in a green light can be profitable: Products making ESG-related claims averaged 28% cumulative growth over a five-year period, compared to 20% for products without such claims, according to a 2023 McKinsey study.2<\/sup><\/p>\n\n\n\n

But what happens when sustainability claims are just for show?<\/p>\n\n\n\n

Companies that try to reap the benefits of seeming sustainable without making actual change are greenwashing<\/strong>, or misleading consumers about environmental practices to benefit their public image.<\/p>\n\n\n\n

When companies exploit consumers\u2019 desire to make environmentally responsible choices, they challenge trust and undermine genuine sustainability efforts.<\/p>\n\n\n\n

What is greenwashing?<\/h2>\n\n\n\n

Greenwashing, also known as green marketing or green sheen, is the act of communicating misleading or false claims to make a company appear more sustainable than they are in practice.3<\/sup> <\/p>\n\n\n\n

For example, a company might tout that their clothing is \u201csustainably produced and shipped,\u201d but still use synthetic fibers and non-recyclable packaging, among other unsustainable choices. In this case, there is a gap between symbolic gestures, like green logos or eco-labels, and substantive, day-to-day actions.<\/p>\n\n\n\n

Companies achieve this misrepresentation through methods such as press releases about green projects or sustainability task forces, rebranding products or services, and advertising materials.<\/p>\n\n\n\n

Dr. Victoria Hurth, fellow at the University of Cambridge Institute for Sustainability Leadership<\/a>, says greenwashing can be deliberate or come from a place of ignorance. \u201cIn either case the idea of being \u2018green\u2019 is washed out of its meaning for those receiving the message,\u201d Hurth explained.<\/p>\n\n\n\n

Examples of greenwashing<\/h3>\n\n\n\n

Volkswagen\u2019s \u201cClean Diesel\u201d engine<\/strong><\/p>\n\n\n\n

One greenwashing example is the Volkswagen \u201cClean Diesel\u201d engine scandal. VW heavily marketed new low-emissions diesel technology as more environmentally friendly than other gasoline cars.<\/p>\n\n\n\n

In reality, Volkswagen was fitting their vehicles with a \u201cdefeat device\u201d that reduced emissions during emissions tests. On the road, their engines emitted nitrogen oxide pollutants up to 50 times the legal limit in the United States.4<\/sup> <\/p>\n\n\n\n

This led to a host of regulatory fines and several false advertising lawsuits being filed against VW, which cost the company $35 billion and resulted in millions of vehicles being recalled.5<\/sup> Five years after the scandal, the company\u2019s stock was still valued at 35% below its previous levels.6<\/sup><\/p>\n\n\n\n

In 2025, ten years later, courts are still ruling Volkswagen liable for the defeat devices and convicting former employees of fraud.7, 8<\/sup><\/p>\n\n\n\n

\u201cThere is an incentive not to look beyond the surface of a green message \u2013<\/em> it can be like a silent agreement that buyer and seller have to enable actions they would otherwise feel bad about.\u201d<\/em><\/p>Dr. Victoria Hurth, fellow at CISL<\/cite><\/blockquote><\/figure>\n\n\n\n

H&M conscious clothing<\/strong><\/p>\n\n\n\n

Clothing brand H&M faced criticism from European watchdog organisations over its \u201cConscious Choice\u201d collection \u2013<\/em> marketed using environmental scorecards and claims that products were made with more sustainable materials.<\/p>\n\n\n\n

A 2022 Quartz investigation found that among the scorecards claiming an item of clothing was better for the environment, more than half were no more sustainable than comparable items made by the company and its competitors.9<\/sup><\/p>\n\n\n\n

The data for the scorecards comes from an industry-metric called the Higg Index. In a notice to H&M, the Norwegian Consumer Authority labelled the data as misleading and a breach of Norway\u2019s marketing laws.10<\/sup><\/p>\n\n\n\n

That same year, H&M made commitments to the Netherlands Authority for Consumers and Markets (ACM) to adjust or remove sustainability claims from their website \u201cin order to minimise the risk of misleading practices involving sustainability claims.\u201d11<\/sup><\/p>\n\n\n\n

How to spot greenwashing<\/h2>\n\n\n\n

It might feel easier for consumers to take sustainability claims at face value. As Hurth notes, \u201cThere is an incentive not to look beyond the surface of a green message \u2013<\/em> it can be like a silent agreement that buyer and seller have to enable actions they would otherwise feel bad about.\u201d<\/p>\n\n\n\n

Exercising due diligence can help shoppers spot deception and make an informed choice. Consumers can look out for vague terms and explore the company\u2019s mission and supply chain to find out more information. There are also certifications from trusted organisations that can help verify a company or product\u2019s sustainability.12<\/sup><\/p>\n\n\n

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Why should companies care about greenwashing?<\/h2>\n\n\n\n

As the demand for green practices increases, many companies might opt for the easy way out by using greenwashing to appear environmentally responsible. However, appearances will only get businesses so far. Governments, regulators, and stock markets are pushing forward mandatory disclosures on environmental impact.<\/p>\n\n\n\n

When companies engage in greenwashing, the consequences extend beyond the PR department:<\/p>\n\n\n\n