Greenwashing

Greenwashing Background

• There have been instance where private companies and even government exaggerate the actions they are taking to help the fight against climate change.
• In the process, they give out misleading information, make unverifiable claims, and sometimes plainly lie about their products or processes. This has directly and indirectly affected climate actions.

What is Greenwashing?

• Greenwashing is defined as a growing tendency among firms and governments to label certain activities as climate-friendly, which would lead to emissions reduction, or avoidance of emissions.
• There have been instances where developed countries greenwash their normal business investments in developing countries, or their bilateral aid, by highlighting climate co-benefits of the financial flows, sometimes with very little justification.
• Origin of the term: Environmentalist Jay Westerveld coined the term “greenwashing” in 1986, to criticize the “save the towel” movement in hotels, which had little impact other than saving hotels money in laundry costs.
• Examples of Greenwashing:
  • Volkswagen scandal: In Volkswagen scandal, the German car company was found to have been cheating in emissions testing of its claimed green diesel vehicles. This was a case of greenwashing.
  • Palm oil company claims: Multinational palm oil company of Indonesia had claimed that palm oil plantation provide home to flora and fauna. In reality, palm oil plantations contribute to deforestation.
• Challenges to Greenwashing:
  • There is no clear methodology to verify if a product or investment is actually climate-friendly.
  • Third-party organizations involved in studying climate-friendliness of project do not have expertise to provide clear data.

Impact of Greenwashing

• Boost carbon-emitting business: Greenwashing enhances the image of the entity, sometimes even helping them boost their business.
  • Consumers are more likely to unknowingly buy a product or service that is highly polluting, being unaware of its negative environmental impacts.
• Pushing towards disaster: Greenwashing presents a false picture of the progress made on climate change front. People believe the same and their lack of action pushes the world towards disaster.
• Expensive: Apart from misleading users on climate front, entities use greenwashing to increase price of products, by labeling them environment-friendly. Consumers are forced to pay higher prices.
• Brand degradation: If the claim of greenwashing is proved to be false, the brand value of the company will seriously be affected.
  • Ex: Emission scandal negatively affected the brand value of Volkswagen motors.
• Promote bad practices: The false label of environment-friendly can promote bad disposal or usage practice among the consumers.
  • Ex: False label of bio-degradable can promote practice of unscientific disposal of plastic by consumers.

Solving Greenwashing Problem in India

• Regulating/monitoring entity: There has to be authorized entities that monitor/verify claims made by private companies or government about their climate-friendly actions. This will ensure that claims are made only after due study.
• Skepticism: Users expressing skepticism about the climate-friendly products can force companies.

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