Greenwashing (a compound word modelled on "whitewash"), or "green sheen," is a form of spin in which green PR or green marketing is deceptively used to promote the perception that an organization's products, aims or policies are environmentally friendly. Evidence that an organization is greenwashing often comes from pointing out the spending differences: when significantly more money or time has been spent advertising being "green" (that is, operating with consideration for the environment), than is actually spent on environmentally sound practices. Greenwashing efforts can range from changing the name or label of a product to evoke the natural environment on a product that contains harmful chemicals to multimillion dollar advertising campaigns portraying highly polluting energy companies as eco-friendly.
While greenwashing is not new, its use has increased over recent years to meet consumer demand for environmentally friendly goods and services. The problem is compounded by lax enforcement by regulatory agencies such as the Federal Trade Commission in the United States, the Competition Bureau in Canada, and the Committee of Advertising Practice and the Broadcast Committee of Advertising Practice in the United Kingdom. Critics of the practice suggest that the rise of greenwashing, paired with ineffective regulation, contributes to consumer skepticism of all green claims, and diminishes the power of the consumer in driving companies toward greener solutions for manufacturing processes and business operations. Many corporate structures use greenwashing as a way to repair public perception of their brand. The structuring of corporate disclosure is often set up so as to maximize perceptions of legitimacy. However, there is a growing body of social and environmental accounting research finds corporate posturing and deception in the absence of external monitoring and verification. 
The term greenwashing was coined by New York environmentalist Jay Westervelt in a 1986 essay regarding the hotel industry's practice of placing placards in each room promoting reuse of towels ostensibly to "save the environment." Westervelt noted that, in most cases, little or no effort toward reducing energy waste was being made by these institutions—as evidenced by the lack of cost reduction this practice effected. Westervelt opined that the actual objective of this "green campaign" on the part of many hoteliers was, in fact, increased profit. Westervelt thus labeled this and other outwardly environmentally conscientious acts with a greater, underlying purpose of profit increase as greenwashing.
In addition, the political term "linguistic detoxification" describes when, through legislation or other government action, the definitions of toxicity for certain substances are changed, or the name of the substance is changed, so that fewer things fall under a particular classification as toxic. The origin of this phrase has been attributed to environmental activist and author Barry Commoner.
Similarly, introduction of a Carbon Emission Trading Scheme may feel good, but may be counterproductive if the cost of carbon is priced too low, or if large emitters are given "free credits." For example, Bank of America subsidiary MBNA offers an Eco-Logique MasterCard for Canadian consumers that rewards customers with carbon offsets as they continue using the card. Customers may feel that they are nullifying their carbon footprint by purchasing polluting goods with the card. However, only 0.5 percent of purchase price goes into purchasing carbon offsets, while the rest of the interchange fee still goes to the bank.
In the mid 1960s, the environmental movement gained momentum. This popularity prompted many companies to create a new green image through advertising. Jerry Mander, a former Madison advertising executive, called this new form of advertising "ecopornography."
The first Earth Day was held on April 22, 1970. This encouraged many industries to advertise themselves as being friendly to the environment. Public utilities spent 300 million dollars advertising themselves as clean green companies. This was eight times more than the money they spent on pollution reduction research.
In 1985, the Chevron Corporation launched one of the most famous greenwashing ad campaigns in history. Chevron's "People Do" advertisements were aimed at a "hostile audience" of "societally conscious" people. Two years after the launch of the campaign, surveys found people in California trusted Chevron more than other oil companies to protect the environment. In the late 1980s The American Chemistry Council started a program called Responsible Care, which shone light on the environmental performances and precautions of the group's members. The loose guidelines of responsible care caused industries to adopt self-regulation over government regulation.
In 1991, a study published in the Journal of Public Policy and Marketing (American Marketing Association) found that 58% of environmental ads had at least one deceptive claim. Another study found that 77% of people said the environmental reputation of company affected whether they would buy their products. One fourth of all household products marketed around Earth Day advertised themselves as being green and environmentally friendly. In 1998 the Federal Trade Commission created the "Green Guidelines," which defined terms used in environmental marketing. The following year the FTC found that the Nuclear Energy Institute claims of being environmentally clean were not true. The FTC did nothing about the ads because they were out of their jurisdiction. This caused the FTC to realize they needed new clear enforceable standards. In 1999, according to environmental activist organizations, the word "greenwashing" was added to the Oxford English Dictionary.
In 2002, during the World Summit on Sustainable Development in Johannesburg, the Greenwashing Academy hosted the Greenwash Academy Awards. The ceremony awarded companies like BP, ExxonMobil, and even the US Government for their elaborate greenwashing ads and support for greenwashing.
More recently, social scientists have been investigating claims of and the impact of greenwashing. In 2005, Ramus and Monteil conducted secondary data analysis of two databases to uncover corporate commitment to implementation of environmental policies as opposed to greenwashing. They found while companies in the oil and gas are more likely to implement environmental policies than service industry companies, they are less likely to commit to fossil fuel reduction.
In 2010 a study was done showing that 4.5% of products tested were found to be truly green as opposed to 2% in 2009. In 2009 2,739 products claimed to be green while in 2010 the number rose to 4,744. The same study in 2010 found that 95% percent of the consumer products claiming to be green were not green at all.
The Australian Trade Practices Act has been modified to include punishment of companies that provide misleading environmental claims. Any organization found guilty of such could face up $1.1 million in fines. In addition, the guilty party must pay for all expenses incurred while setting the record straight about their product or company's actual environmental impact.
Canada's Competition Bureau along with the Canadian Standards Association are discouraging companies from making "vague claims" towards their products' environmental impact. Any claims must be backed up by "readily available data."
Norway's consumer ombudsman has targeted automakers who claim that their cars are "green," "clean" or "environmentally friendly" with some of the world's strictest advertising guidelines. Consumer Ombudsman official Bente Øverli said: "Cars cannot do anything good for the environment except less damage than others." Manufacturers risk fines if they fail to drop the words. Øverli said she did not know of other countries going so far in cracking down on cars and the environment.
The Federal Trade Commission (FTC) provides voluntary guidelines for environmental marketing claims. These guidelines give the FTC the right to prosecute false and misleading advertisement claims. The green guidelines were not created to be used as an enforceable guideline but instead were intended to be followed voluntarily. Listed below are the green guidelines set by the FTC.
- Qualifications and disclosures: The Commission traditionally has held that in order to be effective, any qualifications or disclosures such as those described in these guides should be sufficiently clear, prominent and understandable to prevent deception. Clarity of language, relative type size and proximity to the claim being qualified, and an absence of contrary claims that could undercut effectiveness, will maximize the likelihood that the qualifications and disclosures are appropriately clear and prominent.
- Distinction between benefits of product, package and service: An environmental marketing claim should be presented in a way that makes clear whether the environmental attribute or benefit being asserted refers to the product, the product's packaging, a service or to a portion or component of the product, package or service. In general, if the environmental attribute or benefit applies to all but minor, incidental components of a product or package, the claim need not be qualified to identify that fact. There may be exceptions to this general principle. For example, if an unqualified "recyclable" claim is made and the presence of the incidental component significantly limits the ability to recycle the product, then the claim would be deceptive.
- Overstatement of environmental attribute: An environmental marketing claim should not be presented in a manner that overstates the environmental attribute or benefit, expressly or by implication. Marketers should avoid implications of significant environmental benefits if the benefit is in fact negligible.
- Comparative claims: Environmental marketing claims that include a comparative statement should be presented in a manner that makes the basis for the comparison sufficiently clear to avoid consumer deception. In addition, the advertiser should be able to substantiate the comparison.
The FTC has said in 2010 that it will update its guidelines for environmental marketing claims in an attempt to reduce greenwashing. The revision to the FTC's Green Guides covers a wide range of public input, including hundreds of consumer and industry comments on previously proposed revisions. The updates and revision to the existing Guides include a new section of carbon offsets, "green" certifications and seals renewable energy and renewable materials claims. According to FTC Chairman Jon Leibowitz, "The introduction of environmentally friendly products into the marketplace is a win for consumers who want to purchase greener products and producers who wants to sell them." Leibowitz also says the win-win can only claim if marketers' claims are straightforward and proven.
- Environmentalists have argued that the Bush Administration's Clear Skies Initiative actually weakens air pollution laws.
- Many food products have packaging that evokes an environmentally friendly imagery even though there has been no attempt made at lowering the environmental impact of its production.
- In 2009, European McDonald's changed the colour of their logos from yellow and red to yellow and green; a spokesman for the company explained that the change was "to clarify [their] responsibility for the preservation of natural resources.",
- Existing published consumption figures tend to underestimate the consumption seen in practice by 20 to 30%. The reason is partly that the official fuel consumption tests are not sufficiently representative of real world usage. Auto makers optimise their fuel consumption strategies in order to reduce the apparent cost of ownership of the cars, and to improve their green image.
- Some environmental conservation groups have criticized the Annenberg Foundation for their attempt to construct domestic pet adoption and care facilities in the Ballona Wetlands Ecological Reserve by repackaging them as part of an "urban ecology center"  - a name chosen because it "accommodated the animal adoption process" according to a former spokesperson for the Foundation. The Los Angeles Times called the proposed domestic pet adoption facilities a "bad fit" for the ecological reserve.
- An article in Wired magazine alleges that slogans are used to suggest environmentally benign business activity: the Comcast Ecobill has the slogan of "PaperLESSisMORE" but Comcast uses large amounts of paper for direct marketing. The Poland Spring ecoshape bottle is touted as "A little natural does a lot of good," although 80% of beverage containers go to the landfill. The Airbus A380 airliner is described as "A better environment inside and out" even though air travel has a high negative environment cost.
- The Advertising Standards Authority in the UK upheld several complaints against major car manufacturers including Suzuki, SEAT, Toyota and Lexus who made erroneous claims about their vehicles.
- Kimberly Clark's claim of "Pure and Natural" diapers in green packaging. The product uses organic cotton on the outside but keeps the same petrochemical gel on the inside. Pampers also claims that "Dry Max" diapers reduce landfill waste by reducing the amount of paper fluff in the diaper, which really is a way for Pampers to save money.
- A 2010 advertising campaign by Chevron was described by the Rainforest Action Network, Amazon Watch and The Yes Men as greenwash. A spoof campaign was launched to pre-empt Chevron's greenwashing.
- "Clean Coal," an initiative adopted by several platforms for the 2008 U.S presidential elections is an example of political greenwashing. The policy cited carbon capture as a means of reducing carbon emissions by capturing and injecting carbon dioxide produced by coal power plants into layers of porous rock below the ground. According to Fred Pearce's Greenwash column in The Guardian, "clean coal" is the "ultimate climate change oxymoron"—"pure and utter greenwash" he says.
- The conversion of the term "Tar Sands" to "Oil Sands," (Alberta, Canada) in corporate and political language reflects an ongoing debate between the project's adherents and opponents. This semantic shift can be seen as a case of greenwashing in an attempt at countering growing public concern as to the environmental and health impacts of the industry. While advocates claim that the shift is scientifically derived to better reflect the usage of the sands as a precursor to oil, environmental groups are claiming that this is simply a means of cloaking the issue behind friendlier terminology.
- Over the past years WALMART has proclaimed to "go green" with a sustainability campaign. However, according to the Institute For Local Reliance (ILRS), “Walmart’s sustainability campaign has done more to improve the company’s image than the environment.” WALMART still only generates 2 percent of U.S. electricity from wind and solar resources. According to the ILRS, Walmart routinely donates money to political candidates who vote against the environment. The retail giant responded to these accusations by stating "that it is serious about its commitment to reduce 20 million tons of greenhouse gas emissions by 2015".
- Environmental accounting can easily be used to pretend that environmental impacts of a company are reduced while actual impacts increase. This has been shown, for example, in a case of corporate carbon accounting: the company celebrated reduced relative emissions while absolute emissions increased. The same company achieved reducing current emissions by "correcting" past emissions as higher (effecting a calculation that presents current emissions as relatively lower).
Opposition to greenwash
Organizations and individuals are making attempts to reduce the impact of greenwashing by exposing it to the public. The Greenwashing Index, created by the University of Oregon in partnership with EnviroMedia Social Marketing, allows examples of greenwashing to be uploaded and rated by the public. The British Code of Advertising, Sales Promotion and Direct Marketing has a specific section (section 49) targeting environmental claims.
According to some organizations opposing greenwashing, there has been a significant increase in its use by companies over the last decade. TerraChoice Environmental Marketing, an advertising consultancy company issued a report denoting a 79% increase in the usage of corporate greenwashing between 2007 and 2009. Additionally, it has begun to manifest itself in new varied ways. Within the non-residential building products market in the United States, some companies are beginning to claim that their environmentally minded policy changes will allow them to earn points through the U.S. Green Building Council's Leadership in Energy and Environmental Design rating program. This point system has been held up as an example of the "gateway effect" that the drive to market products as environmentally friendly is having on company policies. Jim Nicolow, AIA, LEED Fellow, leader of architecture and planning firm Lord, Aeck & Sargent's sustainable design initiative has claimed that the greenwashing trend may be enough to eventually effect a genuine reduction in environmentally damaging practices. According to the Home and Family Edition, 95% consumer products claiming to be green were discovered to commit at least one of the "Sins of Greenwashing". The Seven Sins of Greenwashing are as follows:
- Sin of the Hidden Trade-off, committed by suggesting a product is "green" based on an unreasonably narrow set of attributes without attention to other important environmental issues.
- Sin of No Proof, committed by an environmental claim that cannot be substantiated by easily accessible supporting information or by a reliable third-party certification.
- Sin of Vagueness, committed by every claim that is so poorly defined or broad that its real meaning is likely to be misunderstood by the consumer.
- Sin of Worshiping False Labels is committed when a claim, communicated either through words or images, gives the impression of a third-party endorsement where no such endorsement exists.
- Sin of Irrelevance, committed by making an environmental claim that may be truthful but which is unimportant or unhelpful for consumers seeking environmentally preferable products.
- Sin of Lesser of Two Evils, committed by claims that may be true within the product category, but that risk distracting consumers from the greater environmental impact of the category as a whole.
- Sin of Fibbing, the least frequent Sin, is committed by making environmental claims that are simply false.
In 2008, Ed Gillespie identified "ten signs of greenwashing", which are similar to the Seven Sins listed above, but with three additional indicators.
- Suggestive pictures - Images that imply a baseless green impact, such as flowers issuing from the exhaust pipe of a vehicle.
- Just not credible - A claim that touts the environmentally friendly attributes of a dangerous product, such as cigarettes.
- Gobbledygook - The use of jargon and/or information that the average person can not readily understand or be able to verify.
Companies may pursue environmental certification to avoid greenwashing through independent verification of their green claims. For example, the Carbon Trust Standard launched in 2007 with the stated aim "to end 'greenwash' and highlight firms that are genuine about their commitment to the environment".
- Conspicuous conservation
- False advertising
- Green brands
- Green company
- Green marketing
- Environmentally friendly
- List of environmental issues
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