Corporate greenwashing involves a company enhancing – or fabricating – the environmental impact of its services and products. According to the latest report by financial think tank Planet Tracker, The Greenwashing Hydra, this practice has become increasingly sophisticated, taking many different forms.
Greenwashing activities range from seemingly innocuous strategies that market a product inaccurately, to practices that emphasise a singular green activity to intentionally distract from broader damaging environmental policies.
In the report, Planet Tracker identifies six types of greenwashing:
- Greencrowding is built on the belief that you can hide in a crowd to avoid discovery, relying on safety in numbers. If sustainability policies are being developed, it is likely that the group will move at the speed of the slowest. For an example see ‘The Alliance to End Plastic Waste: Barely Credible’.
- Greenlighting occurs when company communications (including advertisements) spotlight a particularly green feature of its operations or products, however small, in order to draw attention away from environmentally damaging activities being conducted elsewhere.
- Greenshifting is when companies imply that the consumer is at fault and shift the blame on to them.
- Greenlabelling is a practice where marketers call something green or sustainable, but a closer examination reveals this to be misleading.
- Greenrinsing refers to a company regularly changing its ESG targets before they are achieved. Planet Tracker has reported on this type of activity previously in an examination of Coca-Cola and PepsiCo in the report, Soda-pressing.
- Greenhushing refers to corporate management teams under-reporting or hiding their sustainability credentials in order to evade investor scrutiny. In recent months, asset management firms including Blackrock and HSBC have downgraded a number of Article 9 funds to Article 8 classification, ostensibly to comply with the stricter regulations under SFDR. but the action was potentially undertaken to avoid the scrutiny associated with the Article 9 standard. For further greenhushing analysis see ‘Greenhushing – Sophisticated Greenwashing?’
John Willis, Director of Research at Planet Tracker comments, “Around the world, regulators are starting to confront the growing greenwashing issue. Addressing the problem will require those bodies leading the charge against greenwashing to establish a global equivalence in ESG reporting. By identifying the various iterations that greenwashing comes in, we hope to enable investors and consumers to be more mindful when making environmentally led decisions.”