Companies wash their image to appear greener

It has rained a lot (figuratively, unfortunately, given the current drought) since the activist Jay Westerveld coined the English term greenwashing in 1986.

Thomas Osborne
Thomas Osborne
15 October 2022 Saturday 18:32
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Companies wash their image to appear greener

It has rained a lot (figuratively, unfortunately, given the current drought) since the activist Jay Westerveld coined the English term greenwashing in 1986. The term refers to the practice of falsely promoting an organization's environmental efforts relative to its actual strategies, goals, motivations, and actions. Westerveld denounced that the hotel industry promoted the reuse of towels as part of its environmental strategy when in fact said plan was designed solely as a cost saving measure.

Since then, plans under the acronym ESG (environment, social policies and corporate governance) have been the order of the day for companies, which have understood that sustainability is also profitable (Forbes has calculated that ESG assets could reach 50 billion dollars in the year 2025).

However, the risk that green policies do not correspond to reality remains. The difference is that now, thanks to social networks, it is even possible to measure it. A recent Harvard University study Three Shades of Greenwashing (commissioned by the environmental entity Greenpeace) has revealed how the world's largest firms in the oil, gas, aviation and automotive sectors use their online channels to promote false environmental commitments and distract public attention from the climate crisis. After analyzing more than 2,300 posts on Twitter, Instagram, Facebook, TikTok and YouTube, the study highlights that only very few messages make explicit reference to the climate crisis, while two thirds of the posts issued (67%) were classified as greenwashing.

“Social media is the new frontier of deception and attempts to delay action on the climate crisis. Our results show that as Europe experienced its hottest summer on record, some of the companies most responsible for global warming avoided talking about the climate crisis and instead used social media to strategically position themselves as sustainable, innovative and conscientious brands. social,” says Geoffrey Supran, a research associate in the Department of the History of Science at Harvard University and lead author of the study.

Some example. Despite the historic drought in Europe, almost none of the companies (only 0.3% of the messages were counted) made reference to the problem of climate change in recent months. Of course, the vast majority of these companies celebrate their supposed "green innovation" (two out of three publications), while their main business, with high emissions, represents a minimal part of their communication.

In addition, one in five messages uses topics such as sports, fashion or social causes of various kinds such as the LGBTIQ community "to distract the public's attention from the climate responsibilities of companies". Many of these communications also show cynicism because when talking about sustainability, they often transfer this burden to the customer rather than to the company itself (in the form of invitations to its customers to save on consumption, to travel more efficiently and reconfigure habits).

If you go to look at the sectors, each area has its own strategy. The research indicates that airlines (Lufthansa, Air France KLM, Wizz Air...) often appropriate elements of nature present in some of their destinations to wash their business (think of a paradisiacal beach) or even refer to efficient devices when “these technological solutions are still incipient or limited”. In 2019, the largest airlines were responsible for 170 million tons of greenhouse gases, the equivalent of more than half of the emissions of all of Spain in one year.

Car manufacturers (Volkswagen, Mercedes, BMW, Stellantis) are betting everything on electric and hybrid vehicles, but ignoring the fact that the manufacture of these cars still pollutes and that transport is still responsible for about a quarter of CO2 emissions in the EU (2019), of which 71.7%% comes from road mobility. In the automotive industry, only one in five companies actually advertises a product, all the others just give the brand a green touch.

As for energy firms (Shell, TotalEnergies, Eni, RWE), references to renewables (solar, wind) predominate, together with beauties of nature, a certain technological optimism about the ability to reduce pollution and mention of solutions still very limited in scope (biofuels, hydrogen, etc.).

In itself this would not be a problem, except for the fact that these fossil companies between 2010 and 2018 invested only 1.7% of their annual capital expenditure in low carbon technologies. Recently things have improved. In the first half of this year this percentage rose to 32% of the total, but it is still a minority. "These fossil companies present themselves publicly as green, innovative, supportive organizations, leaving aside the fact that their main businesses contribute to fueling the climate crisis," the report denounces.

Greenwashing is not that it is illegal. Its action moves on the blurred frontier of advertising, branding and commercial promotion. Of course, it is not a crime, unless the fraud has financial relevance, or it is misleading information that harms the shareholder or the investor.

The problem is that the criteria that should define when a company is sustainable are not very clear either. For example, a study carried out by Deloitte (ESG investment and greenwashing) mentions that 71% of fund companies with supposedly ESG characteristics do not pass the test in accordance with the criteria of the Paris Agreement to fight against climate change.

Two extreme cases help to understand the possible options. One is TotalEnergies. An investigation in 2021 by Global Environmental Change showed that the company was aware of the devastating effects of the fossil industry on the climate since 1971, but remained silent about it. Now, many years later, the firm has taken a turn towards sustainability.

The opposite case is that of the clothing company Patagonia, which has been committed to the environment since its inception and which allocates part of its profits to the environmental cause. A few weeks ago the founder, Yvon Chouinard, left the shares of his company to a trust to fight climate change. A clean operation, without the need for washing.