Insights

As awareness of the global climate crisis and escalating inequalities grow, so too does society’s demand for more sustainable and ethical ways to live. And while science sits at the heart of how we understand and measure the impacts of our actions on people and the planet, it is communications that hold the power to persuade, inspire and enlighten people to actually think and act differently.

It’s easy to think of marketing and communications as simply a vehicle for good storytelling. But when it comes to sustainability, there are very serious responsibilities as well as opportunities in communicating about impact. The golden rule in impact communications is transparency. Without it you can easily find yourself misleading your reader and in some instances, guilty of greenwashing, a serious offence that can be enforced regardless of intent.

How common is greenwashing anyway?

Greenwashing by definition refers to misrepresenting the extent to which a good, service or strategy is environmentally friendly, sustainable or ethical. In 2023 the Australian Competition and Consumer Commission (ACCC) conducted an internet sweep of nearly 250 businesses that revealed 57% were making concerning claims about their environmental or sustainability practices. The vague or unclear environmental claims have sparked concerns around the prevalence of greenwashing and has seen regulatory authorities including the ACCC and Australian Securities and Investments Commission (ASIC) investigate further and take enforcement action where appropriate.

‘Businesses using broad claims like “environmentally friendly”, “green”’, or “sustainable”’ are obliged to back up these claims through reliable scientific reports, transparent supply chain information, reputable third-party certification or other forms of evidence,’ said ACCC Deputy Chair Catriona Lowe.

Consumers are now, more than ever, making purchasing decisions on environmental grounds. Unfortunately, it appears that rather than making legitimate changes to their practices and procedures, some businesses are relying on false or misleading claims. This conduct harms not only consumers, but also those businesses taking genuine steps to implement more sustainable practices.
– Catriona Lowe.

The impacts of greenwashing and how to avoid it

When it comes to greenwashing, the key issue of concern is around misleading people from being able to make informed decisions. Not only does greenwashing erode consumer trust and damage business reputation, it also impacts overall confidence in sustainability related actions and undermines the integrity of businesses that do invest in ESG and other sustainability practices.

While there are cases of businesses who have engaged in deliberate attempts to greenwash their offerings, more often greenwashing results from sloppiness. However, no matter the intent, businesses need to be aware they can still be found to be misleading and deceptive and have legal ramifications, even if they believe they have acted reasonably and honestly.

When checking for greenwashing, the basic test to apply is to ask: Can the conduct in these circumstances lead or be capable of leading a person into error? While sustainability campaigns and communications tend to focus on reporting past and current actions, making claims about the future must also be handled with caution to ensure there are reasonable grounds to make future representations on, otherwise they too can be found to be misleading or deceptive.

The key is in embracing transparency. Any smart operator knows there is always room for improvement. The concept of greenwashing reminds us that communicating our impact isn’t just about what you say, but it can also be about omitting relevant information or failing to disclose negative impacts. However, when businesses communicate openly about where they are and where they aren’t making progress, people are more likely to trust their journey towards sustainability than those only promoting positive progress.

Guiding principles for trustworthy environmental, sustainable and ethical claims

In 2023 ASIC released a report on its interventions into greenwashing that identified common problem areas, such as the use of net-zero statements and targets; broad terms such as ‘carbon neutral’, ‘clean’ or ‘green’; inaccurate fund labels; and inaccurate investment screens.

The 2023 internet sweep by the ACCC uncovered eight key issues that were fuelling the potential for misleading environmental statements:

1. Vague and unqualified claims
2. A lack of substantiating information
3. Use of absolute claims
4. Use of comparisons
5. Exaggerating benefits or omitting relevant information
6. The use of aspirational claims, with little information on how these goals will be achieved
7. Use of third-party certifications
8. Use of images which appear to be trust-marks

These insights led to eight good practice principles being developed that can help guide your approach to impact communications and avoid inadvertently making misleading environmental, ethical or sustainability statements.

You can read the full ACCC guide for businesses here.

What other kinds of ‘washing’ do we need to watch out for?

Alongside greenwashing are a number of other terms that call out misleading or unethical practices in impact communications including:

• Blue washing – the name is rooted in the blue logo of the UN Global Compact and applies for social or ethical claims that don't have a legitimate basis, including things like ‘fair trade’, ‘slavery free’ or ‘ethically sourced’.
• SDG washing – reporting on positive contributions to the global goals but ignoring important negative impacts.
• Greenhushing – under-reporting or hiding sustainability credentials to avoid scrutiny from investors, regulators and other stakeholders.
• Green rinsing – the practice of regularly changing ESG targets before they are met.
• Greenlighting – highlighting something environmental, however small, to draw attention away from other unsustainable practises or products.
• ESG washing – a broader term covering not just environmental statements, but the full spectrum of sustainability statements that relate to Environmental, Social and Governance topics.
• Impact washing – providing false or misleading claims about a product’s ability to cause change, which are not supported by evidence. These often fall under legislation such as Australian Consumer Law, the Corporations Act and the ASIC Act.
• Blackcladding – when a business ‘projects an image of being an Aboriginal business, but in actuality, the business itself, or the people that are the nuts and bolts and the guts of the business, are not Aboriginal’. This definition is attributed to Wiradjuri woman Jarin Baigent, the CEO and Founder of Trading Blak.
• Rainbow washing – using the rainbow Pride colours to represent a business’s support for the LGBTQI+ community, without having made substantive efforts to support that community.

The power of communications to drive behaviour change

While there are increasingly more regulatory reporting requirements for businesses of different sizes and sectors to disclose and report on sustainability related activity, businesses have no real obligations to build marketing campaigns on ESG issues. However, it is becoming clearer that consumers are increasingly valuing things like reduced carbon footprints of products, knowing that living wages are being paid through supply chains and that toxic materials are eliminated from production lines. As these ESG characteristics are increasingly influencing people’s decisions, the responsibility of communicating in an intentionally accurate, accessible and transparent way is increasingly held to account and valued by consumers.

One of the conundrums marketers and communicators face is acknowledging that the production and consumption of things that we don't need or that don't last is at the heart of the climate crisis and fuels the inequalities in our world. So, if your job is to communicate in a way to drive people to buy a product or consume a service, then how are you not fuelling the problem?

There are many great examples of marketing campaigns demonstrating how they can play a vital role in educating their audiences about our choices in consumption. As Patagonia once famously said in its 2011 marketing campaign: ‘Don’t buy this jacket’. And the Swedish shoe company Icebug used the tagline ‘there are no green shoes’.

Ask the tough questions

As impact communicators there is an inherent responsibility to ask some tough questions: Do people really need this product or service and why? If yes, is the need great enough to justify the resources to produce/offer it? Can we find ways to reduce any environmental and social harms caused by producing these products or services? Are we producing things that are high quality and repairable? And, how will we dispose of things at the end of their useful lifecycle?

By answering some of these tough questions we can start to shape powerful stories, based in evidence, that can inspire and empower consumers to make better choices for people and the planet. By upholding the role and responsibility of high-quality communications and avoiding greenwashing and all the other types of over- or under-claiming, we have the power to enact evidence to inspire a better and more sustainable way of living and hold ourselves accountable for continuous improvement.

Learn more

If you have any queries about topics raised in this article or would like support to develop impact communications, please contact Alischa Ross, Associate Director, alischa@thinkimpact.com.au.

Think Impact would also like to acknowledge the great training course available through Global Compact Network Australia, 'Greenwashing; time to stop the spin cycle'. Visit their website for more information and course dates.