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Sustainability: The Crackdown on Greenwashing

Updated: Oct 23, 2023

Harry Hetherington examines what greenwashing is, and asks whether the latest EU Directive is enough to tackle the growing problem and spur meaningful climate action.

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Amid growing concern around the dubious environmental claims made by large carbon-emitting companies, the EU is seeking to counter ‘greenwashing’ through legislation.

In March, the European Commission introduced the Proposal for a Directive on Green Claims. Commonly known as the Green Claims Directive, it recommends ‘effective, proportionate and dissuasive’ penalties for firms which cannot justify their environmental claims.

A 'Golden Age of Greenwashing'?

Greenwashing is defined by Greenpeace as ‘a PR tactic that's used to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact’. A term first used in the 1980s, it has become more prominent in recent years as companies with large carbon footprints have engaged in greenwashing to delay climate action.

As such, Greenpeace has suggested that 'the last few years may well go down in history as the golden age of greenwashing’. According to Blanca Morales, Senior Coordinator for EU Ecolabel, European Environmental Bureau, ‘The proliferation of greenwashing is hampering the green transition: it hinders consumers’ ability to make informed sustainable choices, and makes it harder for the companies that strive to reduce their environmental impacts to differentiate themselves from free riders.’

Fossil fuel companies have altered their approach to climate change dramatically, as shown by their advertising strategies. The 1990s saw firms denying the existence of man-made climate change, before switching approach and passing responsibility onto consumers by getting individuals to assess their own carbon footprints in the 2000s.

Increasingly, we are now seeing what renowned climatologist Michael Mann refers to as climate ‘doomism’. This narrative suggests that it is already too late to avert disaster, potentially causing people to give up. Such disengagement can be good news for polluters.

Greenwashing is another form of these tactics, co-opting the language of environmentalism to placate consumers and governments. Recent examples include easyJet’s claim that customers can ‘fly carbon-neutral' and meat company JBS proclaiming in a full-page New York Times advert that bacon, chicken wings and steak could have net-zero emissions. Shell was criticised for misleading consumers by claiming that individuals could drive ‘carbon-neutral’. What they were referring to, however, was simply a promise to offset car fuel emissions by stopping deforestation.

Carbon offsetting is offered as a solution by greenwashing companies and it is a contentious issue. Undoubtedly, offsetting has the potential to create a huge global financial market where companies buy and sell ‘carbon credits’ from each other and which incentivises reducing emissions.

One problem is that the initial emissions created by companies are patently real, whereas the balancing-out of these emissions via offsetting can be falsely represented. While supporting and restoring natural carbon sinks such as forests and oceans is crucial, critiques of such schemes point out that they can distract from real climate action and cannot truly ‘offset’ emissions.

A recent investigation by The Guardian showed that leading offsetting certifier Verra overstated the threats to forests supposedly ‘saved’ by offsetting deals by around 400% on average. Offsetting projects need to show that there would not have been carbon savings if the project was not initiated, that deforestation has not simply been pushed to another area, and that the project will have a duration long enough for carbon to be reabsorbed.

What is the Green Claims Directive?

The Directive is part of the European Green Deal, a policy initiative to make the European Union climate neutral by 2050. In 2021, the Commission conducted an online ‘sweep’ of green claims from a variety of business sectors such as clothing, cosmetics and household equipment. Of the 344 seemingly dubious claims it initially identified, it concluded that 37% of cases included statements like ‘conscious’, ‘eco-friendly’ and ‘sustainable’ without basis.

Meanwhile, in 42% of cases the Commission ‘had reason to believe that the claim may be false or deceptive’. Across the EU, almost half of the 230 ecolabels available have either very weak or no verification procedure whatsoever.

The Directive would give companies ten days to justify green claims before imposing penalties. Firms would need to substantiate their claims using a product life cycle analysis tool that covers all environmental impacts, and EU states would have to set up or support agencies to launch their own investigations into greenwashing allegations.

Significantly, the Directive seeks to clarify the ambiguities related to carbon offsetting by making firms distinguish between their own carbon reduction efforts and their purchasing of carbon credits. A major focus is on consumer empowerment, allowing individuals to be fully informed.

'The proliferation of greenwashing is hampering the green transition: it hinders consumers’ ability to make informed sustainable choices, and makes it harder for the companies that strive to reduce their environmental impacts to differentiate themselves from free riders.’ - Blanca Morales, Senior Coordinator for EU Ecolabel, European Environmental Bureau search function

Is Legislation Enough to Tackle Greenwashing?

The spirit of the Directive has been praised by consumer groups, but they warn that proper enforcement of it is the key to its practical success. According to Monique Goyens, director of the European Consumer Organisation, ‘Authorities should regularly control green claims, publicly disclose their findings, and be able to fine companies who mislead consumers.’

EU Directives, if voted through by the European Parliament and Council, are legally binding. However, it is up to individual EU member states to transpose them into their own law, so the Green Claims Directive would still be susceptible to different implementations.

Under the proposal, companies’ use of carbon offsets to achieve carbon neutrality must be certified and made clear to consumers. Still, the EU’s Environment Commissioner Virginijus Sinkevičius stressed, ‘The message needs to be clear, we are not banning carbon offsets, they are allowed’.

The requirement to clarify the exact nature of offsetting should stop the use of ‘phantom credits’ historically used by big firms to claim carbon neutrality. Despite this progress, it is still important to closely monitor the use of carbon sinks such as forest-planting in offsetting projects as they still risk being destroyed by decay, burning or moving north due to global heating.

Did you know? Findings on ‘green’ claims by companies found that in 42 per cent of cases, the claims were exaggerated, false or deceptive. - European Commission

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The Future of Greenwashing

While it is positive to see steps being taken against greenwashing, the practice won’t be disappearing anytime soon. Large carbon-emitting corporations continue to regard greenwashing as an effective and worthwhile practice, as evident in the money they spend on advertising which talks up their environmental credentials.

Shell, for example, devoted 70% of its public communications to environmental messaging in 2021, according to a report from InfluenceMap, while investing just 10% of profits into ‘low carbon’ investments last year. Even then, Global Witness has argued that the majority of the company’s renewables and energy solutions division expenditure was devoted to gas, and just 1.5% into genuine renewables.

Being alert to the language of greenwashing, distinguishing between carbon reduction measures and carbon offsetting, and scrutinising the effectiveness of carbon offsetting projects, are all important steps individuals can take when exercising their power as consumers, both inside and outside of the EU.


Similar articles: Greenwashing: The Impression of Sustainability

Researched by Emily Boldero / Editor: Laura Pollard / Online Editor: Harry Hetherington


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