We are witnessing a dramatic increase in PR touting sustainability, fuelled by growing consumer concerns around the environment. According to multiple polls over the past decade, around 65 percent of consumers are willing to pay a higher price for sustainable products. The number jumps by around 10 percent among millennials.

No wonder, then, that companies are invested in coming across as eco-friendly. And there is nothing wrong with that – except when the claims turn out to be bogus. Unfortunately, many businesses mislead consumers with exaggerated claims or unrealistic promises around sustainability. This practice is known as “greenwashing”, a term coined by environmentalist Jay Westerveld in 1986.

The ABCs of greenwashing

To put it simply, greenwashing is when companies say all the right things in their marketing materials – but fail to deliver on their green promises. In this way, they are able to take advantage of evolving consumer preferences while continuing with business as usual. According to a recent Harvard Business Review article:

Research carried out in Europe found that 42% of green claims were exaggerated, false, or deceptive, which points to greenwashing on an industrial scale. This is dangerous ground for companies.

An anonymous survey by Harris Poll found that while a majority of business leaders identified sustainability as a priority, 58% also admitted that their companies where guilty of greenwashing. Two-thirds of global executives had doubts about the genuineness of their employer’s sustainability efforts.

Given widespread greenwashing, it is no surprise that consumers have become highly sceptical of corporate sustainability claims. According to a GreenPrint survey, more than half of US consumers “sometimes” or “never” believe companies’ environmental claims.

This week, my message focuses on how to move beyond greenwashing to a more authentic approach. Given the climate emergency as well as heightened consumer awareness, how can companies create greater “green confidence”?

The pitfalls of greenwashing

While the intent of greenwashing is to bolster the company’s reputation, the opposite effect is just as likely – because consumers can often spot the mismatch between marketing-speak and reality. Take the now-infamous example of a well-known oil company that ran a costly and award-winning campaign on its wildlife protection efforts in the 1980s. The backlash, however, came swiftly when it was discovered that the same company was responsible for massive oil spills into ocean waters and wildlife habitats.

Today, climate concern among consumers is higher than ever. The Internet has made it much easier to fact-check claims, and a growing number of people are doing their homework before making purchasing decisions.

To understand how greenwashing influences consumer sentiment, a group of researchers studied over 200 publicly traded large US firms over a period of eight years. They focused on the companies’ stated “green” goals and actions, alongside their customer satisfaction data. The study found that customers were extremely aware when there was a gap between the company’s eco-friendly claims and actual implementation, leading to a fall in customer satisfaction. This awareness also triggered perceptions of corporate hypocrisy – which, in turn, negatively impacted the way in which customers experienced the company’s products and services. By extension, brand loyalty and repeat purchases were also affected. In other words, the damage caused by greenwashing is all too real.

Creating eco-credibility

Here are five suggestions to help leaders build “green confidence” in their business.

1. Do not overcommit.

Set ambitious but realistic goals, then ensure follow-through. Reliability and consistency are the antidote to perceptions of greenwashing. It’s better to commit to fewer targets and meet them, rather than promising the world and failing to deliver.

2. Strive for honesty.

Avoid fluffy, vague messaging that confuses consumers and creates ambiguity. Instead, build clarity and transparency through your sustainability-focused messaging. Catchy buzzwords and striking nature imagery can no longer stand alone; they must be supported with clear, easy-to-understand facts around your company’s eco-efforts.

Updated information should be made available on your website as well as on any social media platforms you use. All data used in company communications should be verifiable, and any targets mentioned should be specific and time-bound. Certifications from trusted third parties are also a plus. Honest messaging will bolster your credibility and allow consumers to build a deep, lasting relationship with your brand/s.

3. Act in concert with others.

In order to address the climate emergency, we need to act together. Consider collective action in tandem with a wide-ranging set of partners, including your competitors. This type of cooperation certainly doesn’t come naturally in the corporate world, but it can be incredibly effective and – yes – attention grabbing. This can work in favour of not just the cause but also the participating companies.

4. Engage with critical voices.

A thought-provoking HBR article on “business activism” suggests starting a dialogue with your critics. The authors give the example of a recent Body Shop initiative: 

The Body Shop recently hosted a Boardroom 2030 activation where they invited a group of young people, including youth activists, to participate in a live conversation designed to reflect the company’s boardroom in 2030… It was uncomfortable, but the leadership team of The Body Shop leaned into the challenge and “truth telling” rather than resisting it.

What would such an exercise look like for your business? Who are your critics, and how can you start a conversation with them? Working together will likely involve identifying key actions, monitoring progress and reviewing outcomes. As the article notes: 

It’s not hard to find out who your critics are – many activists and NGOs are increasingly effective at making their voices heard. People in your investor relations, public relations, and sustainability functions will likely already know who they are and have a list.

Here, it is crucial to draw a distinction between critics who are willing to engage constructively, and those who are only interested in throwing brickbats. Working with people and organisations in the first category will entail a two-part agreement: that the critics acknowledge your progress, as well as hold you accountable if you fail to follow through.

5. Build sustainability into your business.

To move from greenwashing to genuine green marketing, companies may need to make some tangible changes to the way they do business. For example, making an energy-efficient product is only partly sustainable if the factories are emitting excessive pollutants or the raw materials are sourced irresponsibly. Becoming eco-friendlier may involve cleaning up various aspects of your operations – from procurement and manufacturing, to waste disposal and distribution.

One example of a business that has successfully gone down this route is Patagonia, the outdoor clothing retailer. The company has taken several significant steps towards becoming more sustainable – but they are also transparent about the continuing negative impact of some of their practices. A statement on their website reads: 

We can’t pose Patagonia as the model of a responsible company. We don’t do everything a responsible company can do, nor does anyone else we know. But we can tell you how we came to realize our environmental and social responsibilities and then began to act on them.

Whichever way you look at it, moving beyond greenwashing to action is the need of the hour. Both from a returns perspective as well as ensuring a liveable future for the planet, business leaders need to step up and deliver on their green promises. Being honest with consumers, engaging with critics, and aligning communication with action are all good ways to build your company’s eco-credibility.