Greenwashing is more than dirty laundry

Greenwashing is a term that was first used by environmentalist Jay Westerveld in 1986 to describe the practice of companies falsely promoting their environmental efforts in order to gain a competitive advantage. This can be seen in hotels that claim to be ‘eco-friendly’ by not washing towels as often, but make no other genuine changes to reduce their environmental impact.

So, why do companies engage in greenwashing? Unfortunately, many businesses know that being perceived as ethical can drive profits. A recent Nielson’s Global Corporate Sustainability Report found that 66% of consumers would be willing to pay more for a product from a sustainable brand, and that jumps to 73% among millennials. But not all companies engage in greenwashing for profit, some may simply lack the expertise to understand what truly constitutes being environmentally beneficial.

However, as the climate crisis accelerates, governments are becoming more aggressive in pursuing companies that exaggerate their environmental efforts. For example, in 2020, Norway’s Consumer Authority ruled against fast fashion brand H&M for its supposedly ethical ‘Conscious’ collection, and BP was criticised for rebranding as “Beyond Petroleum” despite doing little to shift away from fossil fuels.

To avoid being accused of greenwashing, it is important for businesses to be able to responsibly demonstrate and document their shift towards more eco-friendly practices. One way to do this is to adhere to the ‘ESG’ reporting standards being developed by organisations such as the Institute of Governance. Businesses wanting to market themselves as eco-friendly and sustainable should review these standards and seek professional guidance.

Sustainability is a vital issue that cannot be ignored by businesses, particularly in Thailand where the government is pushing for greater environmental credentials. With the world becoming more conscious of the impact of business on the environment, greenwashing is a practice that businesses should avoid at all costs.

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