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What “greenwashing” means and why we need to be wary of it working in the Pacific


Key points

  • Greenwashing is a distraction from urgently needed climate action

  • The Pacific is particularly vulnerable to climate change and making net-zero pledges “should be about cutting emissions, not corners” [1]

  • The UN has released a report slamming greenwashing and providing a how-to guide to ensure credible, accountable net-zero pledges

  • Existing consumer laws and regulatory settings around false advertising are being used to take action against companies using greenwashing

  • Company directors need to be aware of their potential liabilities around greenwashing claims

 

Introduction


In an ever increasingly competitive environment, marketing departments all over the world are constantly on the look out for new ways to differentiate the products and services their employers sell. From neuromarketing stimuli designed to tap into the “old brain” to intelligent automation, marketers will go to great lengths to entice customers to buy a product, service or message. Tapping into the headwinds of fads and fashions and global movements forms part of that strategy, evidenced with the rise of influencer marketing and some very obvious (and not so obvious) “greenwashing”.


What is greenwashing?


There are many different definitions of greenwashing covering organisations, products, messaging purpose and the interests of those doing the defining, but the Oxford English definition captures the essence: greenwashing is “Disinformation disseminated by an organisation so as to present an environmentally responsible public image”. Essentially, greenwashing is tied up in presenting a deceitfully positive message about an organisation’s environmental impact, often covering up poor environmental records with no accountability for their actions or their “green” claims.


Why does greenwashing matter in the Pacific?


So why do we need to be wary of greenwashing and why does it matter particularly for the Pacific? The Pacific Islands are currently bearing the brunt of the climate crisis while contributing very little to the cause. Some island nations are forecast to disappear altogether and in the meantime climate change is already affecting local communities with changes in temperatures, shifts in rainfall patterns, rising sea levels and an increase in the frequency and intensity of extreme climate events. [2] In a time of crisis, accurate information for effective action is crucial. Greenwashing is a distraction, diverting us from the time and effort required to address real and very live climate issues. We don’t have time to waste with governments dressing up carbon emission statistics to look better than they are and we certainly don’t have time to waste with companies continuing to pollute and failing to address emission standards while hiding behind a green curtain. In the words of Antonio Guterres, UN Secretary General “We urgently need every business, investor, city, state and region to walk the talk on their net zero promises. We cannot afford slow movers, fake movers or any form of greenwashing.”


In recognition of the seriousness of greenwashing as a tactic, coming out of COP27 the UN has released a report slamming greenwashing and weak net zero pledges. The report also provides a “how to” roadmap to bring integrity to net-zero commitments by industry, financial institutions, cities and regions. According to the expert group authoring the report, “actors cannot claim to be ‘net zero’ while continuing to build or invest in new fossil fuel supply or any kind of environmentally destructive activities. They can’t also participate or have their partners participate in lobbying activities against climate change or just report on one part of their business's assets while hiding the rest.” [3]


How can greenwashing be regulated?


In some countries, greenwashing is now being taken very seriously with action being taken against companies found to be disseminating false or misleading sustainability-related statements. The Australian Securities and Investment Commission (ASIC) has taken its first action for “greenwashing” against a listed energy company and is investigating others. ASIC Deputy Chair Sarah Court said, ‘As entities promote sustainability and green practices as part of their value proposition, they must ensure they can support those statements and have a reasonable basis for doing so'. The Australian Competition and Consumer Commission (ACCC) has listed environmental claims and sustainability as one of their 2022-23 priorities in response to growing concerns that some businesses are making false “green claims” and in October this year launched two internet sweeps to “identify misleading environmental and sustainability marketing claims”. [4] Both organisations have put out guidelines on how to avoid greenwashing, including relevant regulatory settings and consumer law.


Company directors and boards may also be legally implicated for greenwashing. According to lawyers Noel Hutley SC and Sebastian Hartford Davics; “Company directors that rush to make net zero pledges without fully examining the firm’s ability to meet the goals could be guilty of “misleading or deceptive conduct” and vulnerable to regulatory or legal penalties. They also have a legal obligation to act on climate risk, not just to disclose it, or face accusations of “greenwashing” that could carry real legal consequences.” [5]


Conclusion


As individuals, it’s up to us to sit up and take notice of the greenwashing around us and call it out so that organisations understand it’s not acceptable. The biggest impact you can have to mitigate greenwashing is by being well informed and choosing where you spend. There are websites such as good on you that rate brands on how ethical they actually are against their claims. So for example, where a company may claim active sustainability, you can see how they are actually independently rated. And as always, vote with your feet, including at all levels of government.




 

[1] Catherine Mckenna, Chairman of the UN High-Level Expert group on greenwashing [2] CSIRO Climate change information for the Pacific https://www.csiro.au/en/research/environmental-impacts/climate-change/pacific-climate-change-info [3] United Nations COP27:’Zero tolerance for greenwashing’ https://news.un.org/en/story/2022/11/1130317 [4] ACCC internet sweeps target ‘greenwashing’, fake online reviews https://www.accc.gov.au/media-release/accc-internet-sweeps-target-greenwashing-fake-online-reviews [5] Companies warned that ‘greenwashing’ could have legal consequences https://cpd.org.au/2021/04/companies-warned-that-greenwashing-could-have-legal-consequences/


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