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Sustainability is more important than ever. Companies across the globe are making efforts to make their practices more sustainable and studies have shown that consumers are increasingly aware of their impact on the environment and thus want to invest time and resources into sustainable alternatives.   

Unfortunately, there are also parties that are capitalizing on the increased awareness for sustainability by intentionally partaking in greenwashing, or, “making people believe that your company is doing more to protect the environment than it really is.” One of the first cases of greenwashing that caught the attention of the international community was revealed by Jay Westerveld in the 1980s. Westerveld, an environmentalist, accused a hotel of making false claims about being environmentally friendly, when in reality they only performed an environmentally friendly task to reduce costs. Today greenwashing occurs in numerous industries, including the fashion industry and the aviation sector. 

Greenwashing is problematic for multiple stakeholders, for many reasons. For instance, consumers run the risk of investing in a product that does not align with their wishes regarding sustainability, which can ultimately cause general distrust in green products. Similarly, an accusation of greenwashing can be detrimental for the reputation and turnover of an organization, as it can affect the consumers’ trust. In their research among asset managers, IPE found that some companies may even downplay their practices and achievements because they are afraid of being accused of greenwashing. 

When looking into the characteristics of greenwashing, it appears that poor communication is an inherent part of the problem. In 2007, TerraChoice conducted a study on environmental claims on in-store products and subsequently came up with the 6 Sins of Greenwashing, a list of characteristics that signaled misleading environmental claims. Amongst other things, these ‘sins’ include lack of proof, using vague language and suggestive green imagery. Reading about these mistakes made me think: what can communication professionals do to combat greenwashing? 

Although the aforementioned ‘sins’ focus on packaged products, they can be applicable to any form of sustainability-related communication. The online platform PR Conversations lists a couple of guidelines for successful sustainable communication, including the use of clear and understandable language, being factual and truthful, providing proof and ensuring that the communication is in line with the company’s ethics and culture. Furthermore, in their short piece against greenwashing, Carbon Credit Capital, emphasize the need for transparency, which means that companies should provide the evidence of their acts if they want to be seen as sustainable. Glean.Info adds that PR teams should understand environmental regulations and make sure that their communication is in line with those.

While greenwashing at its core is much more than just a communication problem, a great deal of solutions lead me to believe that professionals in our industry can play a role in the fight against greenwashing in the investment space. Similar to the responsibility the food industry has to exclude misleading or vague terminology on food packaging, investment managers are responsible for providing transparent information on their stock selection process – with ample evidence of how they define their sustainable universe. If factual information on process and due diligence is provided and properly communicated with the wider public, the probability of a greenwashing accusation should all but disappear.  

By focusing on the solutions to the 6 Sins of Greenwashing and keeping transparency in mind, I hope that communication professionals can contribute to the battle against greenwashing and turn the spotlight back on to the initiatives that are actually sustainable. 

Written by Martijn van Dorp