TerraChoice phrased the seven sins of greenwashing back in 2007, when their research on various ‘green’ companies across North America, Australia and the UK revealed worrying results regarding the companies’ actual contribution to create environmentally friendly products. They found that just over 2000 products were making almost 5,000 green claims. Out of all the products, over 98% was guilty of greenwashing through committing to at least one of TerraChoice’s Seven Sins of Greenwashing as described below. In subsequent reports, they found that over the years, the proportion of sin-free products increased, but only slightly – from 1% in 2007 to 4.5% in 2010. So, what do these sins include?

1. The Sin of the Hidden Trade-Off: This sin includes making a claim about one particular aspect of the product, but fail to give attention to other important environmental issues. One example is by stating that the paper used for packaging comes from sustainably harvested forests, but fail to mention or address anything about the paper-making process – using bleach and/or chlorine can be harmful for the environment, as well as using toxic materials in the ink used. Other examples include using the word ‘organic’ – even though organic ingredients benefit the environment through no use of pesticides, fertilisers or antibiotics, organic farming does not necessarily have less impact on the environment in terms of carbon emissions (see here some studies on emissions of organic wheat, Chinese kale, and livestock).
   
   
2. The Sin of No Proof: Without reliable third-party certification, or any other easily accessible information regarding the environmental efforts, an environmental claim cannot be substantiated. A classic example is stating that recycled plastic is used for packaging, but fail to mention any percentage – is it made of 5%, 50% or 100% recycled plastic?
   
   
3. Sin of Vagueness: If a claim or term is very vague or broad is likely to be misunderstood by the consumer, such as the use of the term ‘all-natural’. When something is natural, it is not necessarily environmentally friendly. Take for example arsenic, mercury and formaldehyde – all natural occurring components that are poisonous. Other over-used, vague and empty terms are ‘green’, ‘eco-friendly’ or ‘sustainable’ – what makes them environmentally friendly exactly?
   
   
4. Sin of worshipping false labels: This happens when an impression is given that there is some kind of third-party endorsement, such as a certification, but this does not exist. Such as fake labels like “100% Eco-friendly”.
   
   
5. Sin of irrelevance: Some claims can be made, but actually do not bear any meaningful information. Especially regarding ingredients or materials that are banned nationally or internationally anyway, such as CFC (chlorofluorocarbons).
   
   
6. Sin of lesser of two evils: This sin could be true for a type of product that as a whole, is already environmentally damaging. Through their green claims, a business might aim to distract from this, ignoring the fact that the product itself is harmful, even it if might be slightly greener than its competitors. Examples of this are ‘organic cigarettes’, fuel-efficient sport-utility vehicles, as well as Burger King’s beef that came from cows on a diet that reduces methane by 33%.
   
   
7. Sin of fibbing: Here, straight up lies and false claims fall under. Wrong certifications or statements such as additive-free, that are simply untrue. These claims are relatively rare, as companies would rather mislead than lie to avoid lawsuits. A well-known example is Volkswagen’s 2015 scandal, where they advertised their vehicles as having reduced emissions. But actually, they just installed a device in the car that could detect when its emissions where being tested, and altered performance to make it look like the emissions were lower.
   
   In addition to these seven sins, Scanlan proposed new sins in his research on hydraulic fracking in the oil and gas industry. These sins included sins of false hopes (no matter what, the practise itself is environmentally harmful even with ecological modernisation), fear-mongering (claims that fabricate insecurity that relate to not buying in on the practise), broken promises, injustice (only a small portion of people benefit, and the rest suffer the consequences), hazardous consequences, and profits over people and the environment – the last one potentially being the most dangerous of all.

The underlying motive to practise greenwashing is straight-forward: environmental awareness is rapidly increasing, and so is the demand for more environmentally friendly products. A study conducted by Nielsen Media Research showed that over 66% of global consumers are willing to pay a higher price for more eco-friendly products. The most important factors include containing fresh, natural and/or organic ingredients, but also whether the company is environmentally friendly and committing to social value. Therefore, appearing more environmentally and socially conscious gives companies a financial incentive. The drivers of greenwashing have been categorised into three different levels: external (e.g. regulators, NGO’s, consumers, investors and competitors), organizational (firm incentive structure such as financial goals, ethical climate, effectiveness of intra-firm communication) and individual (optimistic bias, narrow decision framing) – read more about it here.

But, whereas many companies might deliberately mislead customers about their products, other companies might practise greenwashing by accident, if they might not have the knowledge and expertise to understand how exactly they are able to help the environment and reduce their impact. An example for this is when a company sells something that is packaged in biodegradable materials, but does not tell you anything about how long it takes. In fact, plastic bottles are biodegrade too, but it takes up to 450 years to break down. Companies therefore have to educate themselves in order to understand what practises can really be considered environmentally friendly and how to implement them correctly.

There are several classic examples of big companies having been caught making greenwashing claims. The first greenwashing accusation dates back to 1986 by Jay Westerveld, when hotels started requesting guests to reuse their towels, as a water conservation strategy, without changing any other management strategies to reduce their environmental impact.

Big and small companies have since been found to mislead their consumers as a marketing strategy. For example, Starbucks came up with a straw-less lid in 2018 to increase their sustainability, but this lid actually contained more plastic than the original lid and straw combined. They claimed that the plastic can be recycled, but this was quickly criticised as only a fraction of plastic is recycled globally. Secondly, IKEA was considered a sustainable furniture company, carrying the Forest Stewardship Council certification, until they were found to be linked to illegal logging in 2020. Moreover, various fast fashion brands have been caught greenwashing, such as H&M and Zara. As such, H&M launched its own “Conscious” line of clothing using organic cotton and recycled polyester, and promoted it as “sustainable fashion pieces”. However, they failed to mention how much recycled material each garment actually contained, and have been criticised that the information they supplied was insufficient to call it sustainable.

Greenwashing does not help the environment, as consumers are misled to buy products or services thinking that they are making a more conscious choice, while actually they are not and the products could even be more harmful than others. Moreover, it makes it harder to detect real green claims, as greenwashing encourages skepticism. Greenwashing also negatively affects investor confidence in environmentally conscious businesses.

Real green claims would suffer from greater skepticism since it is hard for customers to differentiate the reliability of green marketing initiatives. TerraChoice [48] has released a study to help customers identify greenwashing practices by companies with the seven sins of greenwashing.

TerraCycle’s sins of greenwashing have been phrased to increase consumer awareness, and also to give some guidelines on how to assess whether a company is greenwashing or not. In addition to this, here are a few more tips on how to identify greenwashing and avoid it:

• Look out for third-party, well-known and respected certifications that have strict environmental regulations. You can check out what types of environmentally and socially related certifications exist in our knowledge-hub, and which ones apply to what type of products.
  
  
• Look out for vague, empty claims and phrases. Always be skeptical of words such as “eco-friendly”, “environmentally-friendly”, “green” and “sustainable”, especially when they are not explained at all. You can find out more about the company and its particular products by researching their website and other resources available on the internet. Researching products can be time-consuming, especially as companies can have elaborative websites and not everyone is as transparent. Luckily, various resources are available on the internet that gather such information independently of the companies, for consumers to quickly and easily assess companies’ environmental efforts – such as the Conscious Quokka! But, be careful to understand how such platforms assess the brands they gather.
  
  
• An important thing to look out for when researching a company is proof. When a company has conducted a life cycle assessment or published an impact report, this is a great way to understand what the company’s impact truly is – and immediately shows you that they are transparent about the results. Rather than assuming that e.g. an all-natural healthcare product is better for the environment, if the company measured how exactly this reduces pollution and how this compares to the norm, this is a lot more reliable.

The first step in tackling greenwashing is consumer awareness – we have to collectively and actively be able to recognise and avoid brands that practise greenwashing. In order to be able to recognise and avoid greenwashing brands, education is essential – know what to look out for, be skeptical, and know how different ingredients and practices affect the environment. The same applies to the companies themselves, that have to educate themselves to understand the impact of their practices and act on it, and further increase their transparency to facilitate the trust between consumer and producer. When consumers set the bar higher, greenwashing companies will struggle to sell their so-called greener products, and the only way to increase their sales is by actually changing their sourcing, production, and management practices to make their products more sustainable.

Moreover, the dangers of greenwashing should be recognised by policy-makers and greenwashing regulations have to be made stricter to pressure companies to stop greenwashing. As such, the new EU’s Sustainable Finance Disclosure Regulation has recently been approved (2020), which aims to prevent greenwashing by determining which financial investments are labelled and marketed as sustainable. Funding managers will be required to categorise their funds based on environmental, social, and governance objectives. This will boost transparency and make it harder for businesses to exaggerate and mislead their sustainability claims.

Moreover, various authorities have recently started to set new guidance for businesses, including a clear definition of what a misleading environmental claim is. The European Commission is also boosting initiatives that highlight the role of the consumer in the ‘green’ transition to prevent greenwashing statements. All in all, more and more is being done to phase out greenwashing, but we still have a long way to go.