Do you think you can get away with greenwashing? Think again!

In the past, understanding of green and non-green products and its impacts on the environment and human health were little-known. Over time, the environmental knowledge continues to grow among public and the society as a whole; hence it has become inevitable that the production of goods and services are expected to be eco-friendlier. However, in the midst, there are still many who continue to spend needlessly more money and time, falsely claiming that their products are eco-friendly. It is time to distinguish between green winners and greenwashing.

Since the environmental movement gained momentum in mid 60s, many companies rushed to create green images to stay on competitive advantage, without looking at the consequences what might happen if their false claims were to be found out, and how harder it would be to rebuild the good reputation again. Companies or business organisations can no longer play with people’s mind while promoting misleading environmental claims through so called ‘green marketing’. In the USA & EU, there have been some environmental regulations which were developed and even modified the existing legislations to counter these issues. For example, the US Federal Trade Commission updated its environmental marketing guidelines to intervene when businesses are falsely claiming that their products are green and European law requires that advertisers list their CO2 emissions in advertisements.

However, the question is - how the customers will know about the green products if the business organisations do not disclose the information? Customers should ask the questions and create pressure on the businesses to reveal the truth of the environmental claims. In this context, Corporate Reporting has been playing its priceless role separating between green heroes and greenwashing, however yet in many cases the consistency and accessibility to quality data have not been satisfactory, therefore it is important that the information in the reporting is accurate, verifiable, consistent and clear.

It is a fact that Corporate Reporting on economic, environmental and social issues has entered a new phase. It has moved from an experimental phase to a standard practice. In its recent survey of Corporate Responsibility Reporting 2017, KPMG found that the majority (78 percent) of the world’s top companies (G250) now do this, indicating that they believe CR data is relevant for their investors. The practice has shown remarkable growth in recent years: in KPMG’s 2011 survey only a minority 44 percent of G250 companies included CR data in their annual reports. Among the N100, the underlying trend is also one of growth, with the rate of companies including CR data in their annual reports up to 60 percent in 2017. There has been a particularly significant increase in the number of US N100 companies integrating CR information into their financial reporting – 81 of the top 100 US companies now do this compared with only 30 just two years ago in 2015.

Finally, those who are still thinking that they can get away with greenwashing, they should think again. Business organisations should grab the green opportunities as the sources of strength rather than barriers to their business growth. Greenwashing is not just worth anymore. Customers will find out and you as a business will lose the integrity and credibility.