Money Bite-Size Read:
- Greenwashing is companies pretending to be more sustainable than they are.
- By calling out greenwashing, we can better promote genuine financial sustainability.
- Here’s what you need to know about greenwashing and how to spot it so that you can tell apart sustainability and marketing.
The MoneyBites Take:
It’s important to spot greenwashing so that you can match your money to your values.
We need to talk about greenwashing.
More of us want to make sustainable consumer choices, with 77% of those surveyed across generations wanting to learn more about sustainable lifestyles. We recognise that this planet is the only one we have, and we want to ensure it’s healthy for the next generation.
Greenwashing blurs our ability to make sustainable choices.
How do you tell if an eco or green investment fund is actually sustainable? Unfortunately, there’s no measurement of what is and what isn’t a sustainable financial choice without common standards.
The problem of greenwashing is that it makes us doubt whether we can make an impact. In fact, the opposite of true. If you want to change the world, you must first master your money by ensuring your money reflects your values, including calling out greenwashing.
Here’s what you need to know about greenwashing:
1. Greenwashing is misleading
The process of greenwashing is to provide information that makes a product or service seem more environmentally friendly than it really is. The claims about sustainability may have roots in reality but are exaggerated in a way that could be considered misleading.
2. It’s designed to make you spend money
Companies know that more consumers today want to be sustainable decisions. However, while we appreciate companies listening to this shift towards sustainability, companies are considered to be greenwashing if they spend more time and money on advertising green products than moving towards more environmentally friendly practices.
3. Greenwashing is a trick of advertising
The idea of greenwashing has its origins in the advertising industry. Indeed, it was coined in the 1980s by the environmentalist Jay Westerveld to describe how limited access to information and increased advertising enabled companies to present themselves as environmentally friendly.
4. It’s selective disclosure
Greenwashing thrives on and takes the form of selective disclosure and symbolic actions. This could mean talking about a product’s green aspects and ignoring the broader company’s less sustainable practices. But more uncomfortably for us as individuals, it could also mean planting a tree or two as a symbolic action to make consumers feel better about their choice to buy a plane ticket.
5. We’re better at calling out greenwashing
After decades of greenwashing, we are getting better at spotting it. Consumers and investors are less forgiving of disingenuous messaging around sustainability and, because of this, increasingly ask questions about what businesses say. That includes advertising standards stepping up with guidance so that companies misleading customers on their environmental credentials are held accountable.
6. You have the power to influence change
At Money Bites, we have consistently talked about sustainability in finance because we follow the money. We see that the decisions you make as an individual matter, whether you make them consciously or not. That also includes making spending switches so that your finances are investing in creating the change you wish to see.
Greenwashing only thrives if we fail to ask questions.
What you need to know about greenwashing is that it stops and starts with us as consumers. We need to demand more of companies we invest in and buy products or services from. So, ask the right questions to have your money match what you say when you say you believe in sustainability.