Throwing in the towel on greenwashing

Photo by Denny Müller on Unsplash


Have you heard the term ‘greenwashing’? How often when staying in a hotel for a few days have you hung up your towels to reuse instead of throwing them in the bath? You did it for the sake of the environment prompted by a little notice in the bathroom, for example – “every day millions of gallons of water are used to wash towels that have only been used once. You make the difference, a towel hanging up means I will use again. That you for helping us conserve the earths vital resources”.

You may have been the victim of ‘greenwashing’, a term first coined in the 1980s by environmental activist Jay Westerveld. He used the term to describe the hotel industry’s practice of encouraging guests to reuse towels claiming it was an environmental measure, while the industry ignored other practices that were more harmful to the environment.

But greenwashing dates back even earlier to the Sixties in the US where, for example, the nuclear power division of a huge electrical company threatened by the anti-nuclear movement fought back with a series of ads proclaiming the cleanliness and safety of the plants. One was a picture of a nuclear plant snuggled up to a beautiful lake with a caption stating:  “We’re building nuclear power plants to give you more electricity,” and went on to say that nuclear plants were “odourless, neat, clean, and safe but leaving out the problems of nuclear waste and accidental meltdowns.

Greenwashing is a marketing tactic used by companies to promote their products or services as environmentally friendly or sustainable, without making significant efforts towards environmental protection.  It has become increasingly prevalent in recent years as customers have become more environmentally conscious and seek out products that align with their values. Unfortunately, many companies have taken advantage of this trend and use greenwashing to increase sales, without any real commitment to sustainability.

There are many ways that companies engage in greenwashing. Some use vague or misleading language in their advertising and packaging, while others use irrelevant certifications or labels to create the impression of sustainability. For example, a company may use the term ‘natural’ to describe their product, even if it contains synthetic ingredients or is produced using environmentally harmful practices.

Another common tactic used in greenwashing is ‘carbon offsetting’. This involves the purchase of carbon credits to offset the environmental impact of a product or service. However, carbon offsetting is often criticised for being an ineffective way to address climate change, as it merely shifts the responsibility to others.

Therefore, genuine efforts to protect the environment can be undermined and create a sense of complacency among people who may believe they are making a positive impact by purchasing supposedly ‘green’ products.

Now, the EU has rowed in with a new directive, the Corporate Sustainability Reporting Directive (CSRD) which will strengthen the rules around the social and environmental information which companies currently must report.

Under the law, EU companies will have to report in more detail, and therefore be more transparent about the impact of their actions and policies on the environment, human rights and social standards. The rules also aim to tackle the issue of misleading consumers to make them believe their products or services are sustainable, when they are not.

Speaking on Morning Ireland last week, Michael Kavanagh, CEO of the Compliance Institute, said: “There are rules in place already for front-end reporting for certain large entity reporting, but this law completely expands the scope for some smaller entities.”

More large companies, as well as some SMEs, will be required to report in accordance with the mandatory reporting standards developed by the European Financial Reporting Advisory Group. In January, the Irish Government and other EU member states were given 18 months to bring the EU directive into law. Yet in a recent survey many business owners said they were unaware of many of the new significant aspects of the legislation.

Companies who have not yet done so, now need to make it their priority to get up to speed on and comply with their obligations. They need to decide how they will align with the rules, how it’s to be resourced and how the information is to be gathered.

A detailed project plan which will add expense and an extra workload to already stressed businesses needs to be compiled and if ignored companies may face harsh penalties and be ‘named and shamed’.

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