It’s not uncommon for companies to use green marketing tactics to increase their profits, while still continuing harmful or unsustainable practices. Greenwashing is a term used to describe the act of presenting something as environmentally friendly that’s really not.
It’s a tricky practice to identify, but once you know what to look out for, you’ll start noticing it in different companies.
This guide will explain what is greenswashing, and how to identify companies practicing greenwashing to help you avoid risking your money or wasting your energy on false efforts towards sustainability.
What Is Greenwashing?
Greenwashing is essentially when a company uses buzzwords like “green” or “sustainable” without actually providing any proof of their commitment to those ideals. It’s often just another form of marketing—but one that can cost consumers dearly if they fall for its tricks.
Greenwashing is a real thing, and it’s worth knowing how to spot it as an investor. Your portfolio, and your planet, will thank you for it.
How Do I Identify Greenwashing?
There are some pretty clear signs that can help you identify when a company is greenwashing and when they’re actually doing something positive for Mother Earth. Here are some common examples:
Greenwash Alert Words
- Eco-friendly, sustainable, recycled/recyclable
- Biodegradable/biodegradable products
- Natural/organic products
- Green (or any variation on this theme)
These words can often be found on small print or hidden away somewhere on packaging labels of greenwashed products, where consumers will never see them.
A Product is Literally Too Good to be True
- The price of the product seems too low, or there’s a lot of hype about how it’s cheaper than anything else
- It sounds like a gimmick, or something someone would make up (think “miracle worker”)
A Corporation Can’t Explain the Science Behind its Claims
Another sure sign of greenwashing is when a company does not explain the science behind its claims. If you can’t understand how or why something is better for the environment, then it probably isn’t. The best way to spot this red flag is to ask yourself if you feel confident that what they’re saying makes sense, and whether they’ve clearly communicated their message in an accurate way.
If a company isn’t able to explain the science behind how their product works or why it’s better than other products on the market, then they’re likely just trying to sell you on emotion and hype rather than substance.
The Bottom Line
With the business world being more conscious about its impact on the world, it’s no surprise that companies are using greenwashing as a marketing strategy to increase their sales and attract socially responsible investors. .
The people who are most vulnerable to this phenomenon are those who want to do use their money for good but don’t know how to tell if a company’s claims about their environmental impact are true.
The best way to stay safe and make sure you’re supporting companies that truly care about sustainability is by doing your research before making any purchases or investment. Look up the company’s reviews, what employees have to say about the work culture, and talk to an investment advisor before making any financial commitments and