The trend is clear; regardless of the market you are in, your consumer base will grow if you produce sustainable products. At the same time, long-term sustainability is nowadays the new standard for investors. In this framework, a shift towards the production of green products would resemble a natural process for companies, which are motivated not only by the social responsibility they own; but also by acquiring the trust of consumers and, most importantly, by profits. The rush towards making sustainable products implies a lot of efforts, and not all companies are willing to access this enormous market by fair means. Among the enterprises willing to enter this growing market, there are some of them practising greenwashing.
First of all, let’s try to define the problem: “Greenwashing is a form of misleading marketing or communication, where a product, service or company is presented as “better” in respect to climate change, the environment or human rights issues, without proper documentation to back this claim.” (Skift)
Greenwashing is lying. Greenwashing is making people believe that your company will improve social value, while the reality is pretty different. The misleading communication is often remarked by “green” and “eco-friendly” scripts on products, without giving proper documentation about how the product has been produced and the materials used. The use of fluffy language, together with suggestive pictures and vague communication often hides the dark side of sustainability, the one of accessing a wide market without increasing social value. However, nowadays we don’t find a mandatory regulation for established labelling about environmental issues. It follows that companies mustn’t comply with fixed standards in order to access this green market, so both 100% sustainable companies and partially sustainable ones can be part of it, because a simple script or a suggestive picture are enough. Moreover, without proper regulation neither people nor companies know what sustainability actually means. As for people, it’s almost impossible to assess the compliance to effective sustainable practices by companies; as for enterprises, they don’t have a clear and mandatory target to reach, to work on or to look at.
The effects of all this are mostly on trust, both of consumers and investors. A survey by Cone Communications has shown that the number of people who believe that a product might have a positive impact when they see a “green” or “environmentally friendly” sigil have decreased over the years; falling from 48% to 36% from 2008 to 2012. Betraying consumers has a terrible impact on the whole market, with investors becoming reticent in the sector. As a result, companies that are effectively working on sustainable products, creating social value, can be indirectly hit by this wave. Another research conducted by Amity University (India) with a random sample of 150 people showed that: 75.6% of non-users cited that they didn’t trust green products, hence, did not buy them while 68.3% cited “not enough green options”, followed by “I think green products are too expensive” (63.4%). In this context, even trustful people can start doubting about their purchasing choices. With this regard it becomes more and more important for companies to work on Environmental Data Management, a detailed report on used materials and productive processes, which can boost trust in an unstable market. In fact, looking back at the same Cone Communications survey, it also found out that “80 percent of consumers would choose a product if its packaging featured specific data detailing, for instance, how much plastic was saved over an earlier version”.
We should then encourage enterprises to undertake green actions in order to benefit from the enormous advantages given by the sector. The focus of the products is no more just related to profits, but to social value too. As a result, people would be willing to pay higher prices for a valuable good, covering the growing costs of production. Be aware that companies practicing greenwashing have high initial revenues, but this process is followed by their collapse due to lack of trust by consumers. The more expensive green products are usually balanced by a higher base of consumers and investors. As a study conducted by Sant’Anna University of Pisa shows, there is a positive correlation (not a cause-effect relationship) between sustainable practices and higher revenues, a higher number of employees and a higher number of consumers.
Greenwashing is affecting an important and growing market, which cares about a profit linked to social value. There is a need to regulate it in order to protect both people and companies from the practice. At the end we desperately need protection, because we desperately need to be sustainable in this world.