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Greenwashing (a compound word modelled on "whitewash"), also called "green sheen", is a form of marketing spin in which green PR (green values) and green marketing are deceptively used to persuade the public that an organization's products, aims and policies are environmentally friendly.
Critics of the practice suggest 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, a growing body of social and environmental accounting research finds, in the absence of external monitoring and verification, greenwashing strategies amount to corporate posturing and deception. Indeed, when a company decides to behave responsibly and adopt a sustainable development vision, it has to change its corporate culture in depth. An understanding and appropriation of the concept are necessary. It is not enough to integrate sustainable development into communication in order to persuade the consumer to buy.
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.
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 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 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. Home and Family edition describes seven sins of greenwashing:
- 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.
Greenwashing has continued to be used in an environmental context, but some academics have taken to using it to refer to economic and social factors as well. Bluewashing is another term that encompasses the latter situations, but it is not widely used. Greenwashing is often used interchangeably with the term.
Evidence 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 containing harmful chemicals to multimillion-dollar marketing campaigns portraying highly polluting energy companies as eco-friendly. Greenwashing is therefore a "mask" used to cover-up unsustainable corporate agendas and policies. Highly public accusations of greenwashing have contributed to the term's increasing use.
Similarly, the introduction of a Carbon Emission Trading Scheme may feel good, but potentially 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 the purchase price goes into purchasing carbon offsets, while the rest of the interchange fee still goes to the bank.
Such campaigns and marketing communications, designed to publicize and highlight organizational CSR policies to various stakeholders, affect corporate reputation and brand image, but the proliferation of unsubstantiated ethical claims and greenwashing by some companies has resulted in increasing consumer cynicism and mistrust.
Greenscamming or Greenscam is a type of greenwashing in which environmentally friendly sounding names and designations for organizations or products that are not environmentally friendly. It is related to both greenwashing and greenspeak. For example, a commonly used greenscamming method is for anti-environmental organizations to give themselves environmentally friendly or "green" sounding names that suggest an interest in environmental protection to deceive the public about their true intentions and motives. This procedure corresponds to the aggressive mimicry in biology.
Greenscamming is used in particular by industrial companies and associations that use astroturfing organisations to try to dispute scientific findings that they consider threatening to their business model. One example is the denial of man-made global warming by companies in the fossil energy sector, also driven by specially founded greenscamming organizations.
One reason for setting up greenscamming organizations is that it is very difficult to communicate open anti-environmental movements or initiatives to the public as positive. Sociologist Charles Harper stresses that it would be very difficult for marketing departments to market a group with the hypothetical name "Coalition to Trash the Environment for Profit". Anti-environment initiatives are therefore often forced to give their front organizations deliberately deceptive names if they want to be successful in public. This is all the more important in view of the fact that surveys indicate that environmental protection is a social consensus. At the same time, however, there is a danger of being exposed as an anti-environmental initiative, which entails a considerable risk that the greenscamming activities backfire and are counterproductive for the initiators.
Greenscamming organizations are very active in the organized climate denial scene, among others. An important financier of greenscamming organizations was the oil company ExxonMobil, which over the years financially supported more than 100 climate denial organizations and spent about 20 million US dollars on greenscamming groups. In many of these organizations, James Lawrence Powell identified their "admirable" designations as the most striking common feature, which for the most part sounded very rationalistic. In this context, he refers to a list of climate denial organizations drawn up by the Union of Concerned Scientists, which includes 43 organizations funded by the Exxon oil company. None of these organizations had a name from which to derive their opposition to climate change. The list is headed by the organization Africa Fighting Malaria, whose website features articles and commentaries opposing ambitious climate mitigation concepts, even though the dangers of malaria could be exacerbated by global warming.
Examples of greenscamming organizations include the National Wetlands Coalition, Friends of Eagle Mountain, The Sahara Club, The Alliance for Environment and Resources, The Abundant Wildlife Society of North America, the Global Climate Coalition, the National Wilderness Institute, the Environmental Policy Alliance of the Center for Organizational Research and Education, and the American Council on Science and Health. Behind these alleged environmental protection organizations lie the interests of business sectors. For example, the National Wetlands Coalition is backed by oil drilling companies and real estate developers, while the Friends of Eagle Mountain is backed by a mining company that wants to convert open-cast mines into landfills. The Global Climate Coalition was again backed by commercial enterprises that fought against government-imposed climate protection measures. Other Greenscam organizations include the US Council for Energy Awareness, backed by the nuclear industry; the Wilderness Impact Research Foundation, representing the interests of lumberjacks and ranchers; and the American Environmental Foundation, representing the interests of landowners.
Another Greenscam organization is the Northwesterners for More Fish, which had a budget of $2.6 million in 1998. This group opposed conservation measures for endangered fish that restricted the interests of energy companies, aluminium companies, and the timber industry in the region, and tried to discredit environmentalists who promoted fish habitats. The Center for the Study of Carbon Dioxide and Global Change, the National Environmental Policy Institute, and the Information Council on the Environment funded by the coal industry are also greenscamming organizations.
In Germany, for example, this form of mimicry or deception is used by the so-called "European Institute for Climate and Energy" (EIKE), which mistakenly suggests by its name that it is an important scientific research institution. In fact, EIKE is not a scientific institution at all, but a lobby organization that neither has an office nor employs climate scientists, but instead disseminates fake news on climate issues on its website.
Greenwashing is a relatively new area of research within psychology and there is little consensus between studies on how greenwashing affects consumers and stakeholders. Because of the variance in country and geography in recently published studies, the discrepancy between consumer behavior in studies could be attributed to cultural or geographic differences.
Greenwashing's effect on consumer perception
Researches found that products that are truly environmentally-friendly are perceived significantly more favorably than their greenwashed counterparts. Consumers are more likely to perceive the price of an item marketed as green as a sacrifice when evaluating greenwashed products. Consumer perceptions of greenwashing are also found to be mediated by the level of greenwashing they are exposed to. Other research suggests that few consumers actually notice greenwashing, particularly when they perceive the company or brand as reputable. When consumers perceive green advertising as credible, they develop more positive attitudes towards the brand, even when the advertising is greenwashed. Consumers are not aware of greenwashing in advertising, and trust green advertisements even when they are deceptive. Still other research suggests that consumers with higher green concern are more able to tell the difference between honest green marketing and greenwashed advertising; the higher the green concern, the stronger the intention will be for not purchasing from companies from which they perceive greenwashing advertising behavior. When consumers use word-of-mouth to communicate about a product, green concern strengthens the negative relationship between the consumer's intent to purchase and the perception of greenwashing.
Research suggests that consumers distrust companies who greenwash because they view the act as deceptive. If consumers perceive that a company would realistically benefit from a green marketing claim, then it is more likely that the claim and the company will be seen as genuine.
Attributions of greenwashing
Consumer perception of green advertisements and greenwashing alike is impacted by where consumers attribute the green messaging. Eco-labels can be given to a product both from an external organization and by the company itself, which has raised concerns considering that companies are able to label a product green or environmentally friendly by selectively disclosing positive attributes of the product while not disclosing negative environmental impacts. Consumers expect to see eco-labels from both internal and external sources but perceive labels from external sources to be more trustworthy. Researchers from the University of Twente found that uncertified or greenwashed internal eco-labels may still contribute to consumer perceptions of a responsible company, with consumers attributing internal motivation to a company's internal eco-labeling. Other research connecting attribution theory and greenwashing found that consumers will often perceive green advertising as greenwashing when companies use green advertisements, attributing the green messaging to corporate self-interest. Green advertising can backfire and is perceived negatively especially when the advertisement or environmental claim does not match a company's actual environmental engagement.
Implications for green business
The majority of researchers working with consumer perception, psychology, and greenwashing note that in order for companies to avoid the negative connotations and perceptions of greenwashing, companies should ‘walk the walk’ when it comes to green advertising and green behavior. Green marketing, labeling, and advertising is found to be most effective when it matches a company's actual environmental engagement. This is also mediated by the visibility of those environmental engagements, meaning that if consumers are unaware of a company's commitment to sustainability or environmentally-conscious ethos, they are unable to factor greenness in their assessment of the company or product.
Significant exposure to greenwashing can make a consumer indifferent to or generate negative feelings toward green marketing. This causes an issue for green businesses as they will have to differentiate themselves from the false claims. It is hypothesised that consumers may also react negatively to true sustainability claims because of negative experiences with greenwashing.
Limits of greenwashing on consumer perception
Research suggests that consumers’ willingness to purchase green decreases when they perceive the green attributes compromise the product quality, making greenwashing potentially risky, even when the consumer or stakeholder is not skeptical of the green messaging. Words and phrases often used in green messaging and greenwashing, such as "gentle", can lead consumers to believe the green product is less effective than a non-green option.
Examples of greenwashing
Common examples present in the marketing of food products (i.e. by making them appear to be healthier just because they have only natural ingredients, whereas even sugars and fat contents can affect healthiness of a product), alternative medicine and natural medicine.
- "Clean Burning Natural Gas" — When compared to the dirtiest fossil fuel coal, natural gas is only 50% as dirty. Fracking issues exist when producing the gas. Despite this, it is often presented as a cleaner fossil fuel in environmental discourse and is in practice used to balance the intermittent nature of solar and wind energy. That said, it can be considered a useful "transitional technology" towards hydrogen as hydrogen can already be blended in and eventually be used to replace it, inside gas networks initially conceived for natural gas-use.
- First-generation biofuels are mentioned as being more environmental to fossil fuels, but some (such as palm oil) contribute to deforestation (which contributes to global warming due to release of CO2). Higher-generation biofuels do not have these particular issues, but have contributed significantly to deforestation and habitat destruction in Canada due to rising corn prices, making it worthwhile to clear cut existing forests in agricultural areas.
- Landfill proponents' claims are often a good example of greenwashing. The proponents, the Taggart Group of Ottawa, Canada, of the Capital Region Resource Recovery Centre claim the centre would be primarily for recycling, but their plans are for about 86% of waste they collect to be landfilled. crrrc.ca
- Environmentalists have argued that the Bush Administration's Clear Skies Initiative actually weakens air pollution laws. Similar laws and critics were issued under macron as "simplifying ecology rules" while still being referred to by French Macron's government as "ecology laws", it being put among the law draft "law project for simplification of public action"
- 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. Automakers 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 "PaperLESSisMORE", but Comcast uses large amounts of paper for direct marketing. The Poland Spring (from the American city of Poland) ecoshape bottle is touted as "A little natural does a lot of good", although 80% of beverage containers go to landfills. 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 fake claims about their vehicles.
- Volkswagen were found out to have fitted their cars with a "defeat device". This device activated when a car was being tested and reduced the pollutants that the vehicle was recorded to have been emitting. In reality, the cars were emitting 40 times the allowed rate of nitrogen oxide. Forbes estimates that this scandal cost Volkswagen $35.4 billion.
- 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.
- Advising hotel guests to reuse towels have an environmental impact with little cost, due to less energy and detergent used.
- 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 the environmental impacts of a company are reduced while actual impacts increase.
- In 2018, in response to increased calls for banning plastic straws, Starbucks introduced a new straw-less lid that actually contained more plastic by weight than the old straw and lid combination.However it is recyclable unlike the older version.
- The term "bioplastics" refers to a plastic product that has been using materials based on biomass or manufactured with organisms. Bioplastics are often conflated with biodegradable plastics however the terms are not synonymous. For example, drop-in bioplastics are still considered bioplastics although the plastic produced has an identical chemical compound to that of its petroleum counterpart.
- Environmental awards given to fossil fuel companies such as Saudi Aramco by groups such as "The Green Organization" which charge entry and membership fees.
- In January 2020 the Fur Free Alliance (FFA) pointed that the "WelFur" label is run by the fur industry itself and is aimed at European fur farms.
- In November 2020, Aston Martin, Bosch and other brands were discovered to have funded a report which mislead consumers about the CO2 emissions produced during the manufacture of electric vehicles, in response to the UK announcing that it would ban the sale of internal combustion engine vehicles from 2030. The greenwashing scandal became known as Astongate given the relationship between the British automotive manufacturer and Clarendon Communications, a shell company posing as a PR agency which was set up to promote the report, and which was registered to James Michael Stephens – the Director Global Government & Corporate Affairs at Aston Martin Lagonda Ltd.
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 in the aughts and 2010s. 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. Some have 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% of consumer products claiming to be green were discovered to commit at least one of the "Sins of Greenwashing".
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.
- Best in class - Declaring you are slightly greener than the rest, even if the rest are pretty terrible.
- Gobbledygook - The use of jargon 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".
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 $6 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".
In the EU, the European Anti-Fraud Office (OLAF) also handles investigations that have an environment or sustainability element, such as misspending of EU funds intended for green products and the counterfeiting and smuggling of products with the potential to harm the environment and health. It also handles illegal logging and smuggling of precious wood and timber into the EU (wood laundering).
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.
In 2013, the FTC began enforcing the revisions put forth in the Green Guides. The FTC cracked down on six different companies, in which five of the cases were concerned with the false or misleading advertising surrounding the biodegradability of plastics. The FTC charged ECM Biofilms, American Plastic Manufacturing, CHAMP, Clear Choice Housewares, and Carnie Cap, for misrepresenting the biodegradability of their plastics treated with additives.
The FTC charged a sixth company, AJM Packaging Corporation, for violating a commission consent order put in place that prohibits companies from using advertising claims based on the product or packaging being "degradable, biodegradable, or photodegradable" without reliable scientific information. The FTC now requires companies to disclose and provide the information that qualifies their environmental claims to ensure transparency.
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 Avenue 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 a 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 the 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 the implementation of environmental policies as opposed to greenwashing. They found while companies in the oil and gas industries are more likely to implement environmental policies than service industry companies, they are less likely to commit to fossil fuel reduction.
Greenwashing practices have also a significant impact on the perceptions of stakeholders in general. A recent study has analysed this issue because the effect on perceptions of the effective social and environmental responsibility of companies, the possible presence of misleading practices and the intentions following an environmental scandal creates significant distortions in the market, in the economic system, as well as increasing the information asymmetry between companies and stakeholders.
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