Aïda El Kohen, MiM student at ESSEC Business School, with the challenges of greenwashing: How marketing, technology and consumer pressure are ways towards truly greener behaviour and shared benefit.
I have been going to the same supermarket for 5 years now and have seen many changes from my newly organic Heinz Ketchup to the increasing number of green labels on food and cosmetics items. As the typical millennial, I am not only attracted to healthier products but I am also more skeptical about how natural they claim to be.
My doubts were actually confirmed when I downloaded the Yuka app on my smartphone. At first, I found it entertaining to scan food and personal care products to decipher their ingredients. We can all agree that unless you have a PhD in Chemistry, it would be difficult to know the effect of ammonium polyacryloyldimethyl taurate on your skin.
Later on, this app made me realize a bigger issue: I have been fooled for years. Fooled by these vague and “green” marketing campaigns worshiping false labels or showing no proof through a reliable third-party certification. In 2010, Terrachoice, a Canadian-based environmental marketing agency, chose 4,744 so-called green products and found out that 95% of them were guilty of at least one sin of greenwashing.
Greenwashing: A mask covering up unsustainable corporate agendas and policies
Greenwashing refers to activities by a company or an organization that are intended to make people think that it is concerned about the environment, even if its real business actually harms the environment. As Karliner Joshua claims, greenwashing is a “mask” to cover up unsustainable corporate agendas and policies. Although these practices have always existed, this term was first introduced in 1986 by New York environmentalist Jay Westervelt. Today, greenwashing has taken a more sophisticated form as the consumer demand for green products grows.
According to the Ferrera sustainability report, 93% percent of global consumers want to see more of the brands they use support worthy social or environmental issues. Nielsen also conducted a study in which commitment to the environment has the power to change the behavior purchase of 45% of consumers surveyed. With consumer becoming more and more conscious, greenwashed companies spend more on marketing and PR campaigns than on research and development to actually lower their environmental impact.
Given the willingness to pay premium for healthier products, companies can not only increase their profit but also improve their brand image. However, do companies benefit from these greenwashing campaigns in the long term? How does it affect the consumer behavior of millennials? And are there regulations in place to control greenwashing? This article will attempt to answer the question of whether greenwashing pays or not.
While greenwashing might have paid in the past as shown by companies’ increased profits, it is not the case anymore. Consumers have more access to information through technology and social media. They cannot be fooled by green labels or a change in the name and logo of the company. In the future, greenwashing will hurt a company even more as it tarnishes its brand image and sparks consumer mistrust. In some countries like Australia and the USA, the legal apparel is becoming more robust to punish greenwashed marketing campaigns.
A savvy consumer with access to technology and social media
In this digital era, consumers have more power to make informed decisions about their purchases. They are connected and are able to look for information instantaneously. The effect of greenwashing is thus limited thanks to two technological tools. First, mobile apps allow for more traceability and transparency of products. Second, social media has democratized the sharing of detrimental information on a company.
Yuka: An app that empowers the consumer and pushes the FMCG industry to change
Access to information via mobile apps or websites has changed companies marketing tactics and even pushed them to change the ingredients of certain products. Cynicism and mistrust towards certain brands or companies are now expressed and justified amongst Yuka users. The app counts more than 12 million of them who can evaluate the quality of their food and check the quality of their cosmetics in the blink of an eye. Yuka is free and gives access to scores and recommendations for each product scanned. FMCG leaders have already reacted to the success of Yuka by removing preservatives.
For example, Knorr, the German food and beverage brand owned by the company Unilever, has recently developed a new recipe for its soups. What is particularly striking about this example is their TV commercial mentioning the Yuka score of its new organic soup. As such, the ad shows the extent to which the food and beverage industry is changing because it can no longer claim that its products are natural, healthy and organic without a real commitment.
Twitter used a tool to regain consumer trust
Additionally, through the democratization of the public opinion on social media, consumers can either revamp or destroy a brand image. The power dynamic has changed and consumers cannot be fooled anymore. Knorr’s competitor, Liebig has ironically taken advantage of tweets that constantly criticize its soups for being too salty and too fatty. Two bold marketing campaigns were launched showing that the company has improved thanks to harsh criticism on Twitter.
The first ad campaign called “merci d’avoir fait grandir nos soupes” thanks its customers for helping Liebig improve the quality of its products. The ad portrays people complaining about the saltiness of the soup or questioning the list of preservatives (E450 and E451). The second move by Liebig was the launch of its PR “eat your tweet” campaign.
After selecting a hundred journalists, influencers and regular Twitter users, Liebig sent them a box with a printed copy of their harsh tweets as well as their new 100% natural ingredients soup. Each tweet was also turned into alphabet pasta so that the Twitter critic could “eat his or her tweet” and realize that the recipe had changed into a healthier and tastier soup. This example proves that through the Knorr TV Ad showing its Yuka score,social media has the power to counter greenwashed claims of companies like Liebig. Using green packaging and fresh vegetables to make the consumer think that its products are healthy is no longer enough.
A stronger legislation to eradicate greenwashing marketing
Greenwashing does not pay anymore because an increasing number of regulations have been put in place in Western countries to punish companies that provide misleading environmental claims. A pioneer country in this field is Australia. The Australian Competition & Consumer Commission published a guide called Green Marketing and the Australian Consumer Law which educates businesses about their obligations regarding environmental claims.
Its underlying objective is to eradicate greenwashing marketing campaigns by improving the accuracy and strength of their green marketing regarding labelling, packaging and advertising. In the US, companies that do not respect the laws of honest green marketing are also punished. Walmart paid a USD1-million settlement deal because of its misleading labels claiming that plastic products were biodegradable. Once exposed, these corporations not only suffer from lower consumer confidence but they also serve as examples to other companies that might attempt to use the same techniques.
In conclusion, thanks to apps providing traceability and transparency, the consumer has the privilege to not only fact check marketing claims made by the company but also share their customer experience. Both the importance of consumer opinion on social media and the increasing number of legislations put in place to regulate honest green marketing leave little room for companies to diffuse greenwashing campaigns.
Patagonia, the leader for honest marketing and anti-consumerism
On the opposite of companies that lie about their environmental prowess, Patagonia is a transparent company that does not sugarcoat its facts. They clearly state on their website that their business activity – from lighting stores to dyeing shirts – creates pollution as a by-product. Their anti-consumerist and pro-environment mindset was mostly reflected on their Black Friday marketing campaign: “Don’t buy this jacket”. This bold, risky and shocking move made its consumers appreciate the brand’s mission and values even more, impacting positively its sales and brand image. Let’s just hope that Patagonia will be able to start a movement and spread its environmental efforts to bigger fast-fashion brands.
Having an honest green marketing strategy can also have other benefits as it attracts top talents, investors and partners who are increasingly looking at companies with a strong CSR policy. The certification B Corp which highlights businesses that balance purpose and profit is gaining more and more traction worldwide. PR is not enough as companies will have to back up their arguments with a credible and authentic approach. As Grace Farajj, Senior Vice President of Public Development & Sustainability at Nielsen best puts it: “Consumers are starting to consider sustainable practices a basic cost of entry, rather than a market differentiator. Going forward, brands have to define a credible, relevant social purpose, deliver greater social value, and communicate that value effectively to attract and retain consumers.”
Steps forward to counter greenwashing
Looking at the future, a closer collaboration between marketing and R&D teams will ensure a more customer-centric and truthful strategy. While marketers know consumers’ wants and needs, R&D teams will push for more ecologically sound products. Without fluffy language, companies will thus beheld accountable for their sustainable campaigns.
Secondly, the use of the blockchain technology and the redesign of labels will respectively guarantee a better traceability and understanding of the ingredients – even without a PhD in Chemistry. These changes can authenticate food origin and improve brand credibility.
Finally, given the increasing number of righteous companies with purpose, a greater international anti-greenwashing alliance would have to be created to call out untruthful companies. Replicating the Australian Green Marketing guide at an international level to create a larger code of conduct might lead to the final end of greenwashing marketing campaigns. As such, the increasing number of labels I’ve seen in my local supermarket over the past 5 years may well become a brighter, truer shade of green.
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