More than a third of the world’s largest companies have made net zero commitments, and many more have made environmental, social and governance (ESG) commitments. But how many of them will actually reach these goals? Are they achievable, or are these commitments simply a form of “greenwashing”?
In “No End in Sight? A Greenwash Review and Research Agenda,” recently published in Organization & Environment, A. Wren Montgomery, Thomas P. Lyon and Julian Barg delve into this question. Lyon is the Erb Institute’s faculty director, and Montgomery is a faculty affiliate.
“Greenwashing is more virulent than ever. A profusion of environmental, social, and governance and net zero commitments are becoming fraught with questionable and misleading claims,” the authors wrote.
Recent developments have changed the conversation about greenwashing and where it’s happening. Initially, greenwashing was focused on specific products, industries and certifications, such as Fair Trade and green building products, the researchers explained.
In a 2015 article, Lyon and Montgomery defined greenwashing as “any communication that misleads people into adopting overly positive beliefs about an organization’s environmental performance, practices, or products.” That 2015 article foresaw an end to corporate greenwashing, but that’s not what has happened.
Instead, greenwashing has grown broader and emerged in new places, including corporate ESG and net zero commitments. Sometimes, these commitments amount to unsupported promises for future action, the authors argued.
And these unsupported promises are a problem. “We see the growth of greenwash as corrupting, delaying, and weakening progress toward ESG goals, net zero commitments, adoption of eco-certifications, and policy change—and thereby weakening society’s collective ability to address the climate crisis,” the researchers wrote.
Companies that focus on carbon offsetting, sustainable fuel technology or carbon credits may essentially be delaying substantive climate action, they said.
ESG investing also may not amount to significant action. The authors noted, “ESG investing offers the attractive hope that investors can make more money by investing in things that save the planet, whistling past the realization that we would not be facing a climate crisis were this hope actually true in general.”
Greenwashing is also apparent in lobbying. For example, oil companies that lobby politicians to allow drilling in the Arctic National Wildlife Refuge contradict their own stated commitments to biodiversity protection.
The authors described three phases of greenwashing, which have evolved over the last two decades:
Greenwashing 1.0: Static Communication to Consumers.
This type of greenwashing was largely directed at consumers through advertising and packaging, for example.
Greenwashing 2.0: Dynamic Management of Stakeholders, Issues and Intermediaries.
In this phase, considerations include how stakeholder pressures affect greenwashing behavior, and how certifications may facilitate greenwashing.
Greenwashing 3.0: Creation of Narratives about the Future.
“Because net zero commitments are by nature long-term promises, rather than verifiable statements about current performance, they open up a whole new world of greenwashing mechanisms, which we label ‘futurewashing,’’ the authors wrote.
This latest phase includes “firms using uncertainty about the future as a vehicle for greenwashing by pledging future action that may never arrive,” the authors wrote, adding that they expect to see more of this type of greenwashing. They noted a surge in news stories about greenwashing in the last two years.
The ways greenwashing has shifted over the years, and new developments such as futurewashing, point to the future evolution of greenwashing and where further research will be helpful in putting an end to these misleading tactics.