The Challenge of Going Green: The ‘’Green’’ and the ‘’Greenwash’’
Sustainability has been a hot topic in the business world for a long time now. There has been never a greater need for businesses to integrate sustainable development goals as it is today. With the United Nations pushing for the achievement of its Sustainable Developmental Goals (SDGs), organizations are encouraged to integrate sustainable practices into their business plans. It all comes down to the changing perceptions of consumers from traditional to green. With the increase in the awareness of environmental issues, products with high carbon footprint are on the decline. We have numerous researches to support this claim.According to a survey conducted by PwC found out that 75% of consumers have changed their lifestyle to more environmental friendly consumption. Around 60% of consumers think that environment-related issues are more important than any other issues.
Another survey was conducted recently by Nielsen Global on Corporate Social Responsibility on 30,000 online consumers across 60 countries. The results show that 55% of the consumers are willing to pay more for goods and services from companies showing commitment towards Social and Environmental issues. Further results showed, that majority of consumers also take into consideration sustainable packaging while making buying decisions.
Companies have been seen to show the efforts they put into the commitment towards People and Planet. But showing off is not enough, such claims must be put into action. Organizations around the world have been seen to fall to the trap of what is called ‘’Greenwashing’’, which is just a marketing gimmick companies make to appear more sustainable than they actually are in practice. Consumer preferences and demands are changing rapids and a push has been created towards the adoption of sustainable practices by businesses around the world. The importance of integrating sustainable practices into business plans can be seen by a statement made by the Governor of Bank of England which says the companies will fail to exist if they don’t adjust to the “Net-Zero’’ world by 2050.
Now the world is faced with a fundamental question of whether the companies are genuinely integrating sustainable practice or they do it as a marketing act for the sake of appearing sustainable only (Greenwashing). The various tools used by companies to achieve this sustainability falsehood range from press releases about green projects or sustainability task forces to rebranding products or services and advertising materials. One of the most famous examples of greenwashing is the case of Volkswagen whereby the car manufacturer claimed to have integrated “Clean Engine” as part of their environmental friendly practices.
Greenwashing Example: Volkswagen’s ‘Clean Engine’
The car manufacturing giant admitted to tampering with on-board emissions regulation software in order to make their cars appear more environmentally-friendly than they actually were. This lead to several false advertising lawsuits being filed against VW, and a global recall being ordered of over 11 million vehicles. The company’s false claims cost the company over US$30 billion through a number of lawsuits. This affected the company in the stock exchange whereby the company’s stock was valued at 30% less. The example of Volkswagen clearly demonstrated that businesses are feeling the pressure to integrate sustainable practices which sometimes leads them to falsify their commitments towards sustainable development.
As the demand for green practices increases, many companies will inevitably opt for easy way out by using green marketing to appear environmentally responsible. However, appearances will only get a business so far. International regulations such as the Paris Agreement seek proven empirical evidence of sustainable reform. The onus now falls on business to not only adapt their strategies, but also to lead and drive the charge for global sustainable change.