Many businesses in all sectors are increasingly ‘going green’ by offering healthy, environmentally-friendly products to the market. However, many business organizations are providing misleading information in an attempt to create an overly positive image of their brands and environmental practices among stakeholders, particularly consumers (Torelli et al., 2020). Greenwashing has been associated with conflicting interests between corporate entities and clients. On the one hand, businesses strive to maximize profits by making false claims about their commitment to environmental, health, or safety standards (D’Alessandro, 2014). It has become cheaper for firms to engage in misleading communications about the safety or environmental impact of products and practices to meet the growing demand for eco-friendly products (D’Alessandro, 2014). On the other hand, consumers expect companies to provide complete, truthful, and non-misleading information about their offerings. Greenwashing, particularly making unfound claims, makes it difficult for people to distinguish between companies that are truly committed to eco-business practices and those that appear to engage in greenwashing (D’Alessandro, 2014). Such unethical practices expose consumers to the risk of purchasing products that are unhealthy and detrimental to the environment.
From a business perspective, greenwashing is a serious threat to the reputation and profitability of a company. Making false corporate social responsibility claims can compromise the relationship between a company and its customers (D’Alessandro, 2014). For example, when clients learn that the goods they purchase do not meet relevant health, ingredient, and environmental standards, they can turn to rival brands. Such choices can be detrimental to a company as they can damage its reputation, consequently making it difficult to achieve higher sales and profit. In addition, claims over violation of health and environmental standards can lead to costly and time-consuming legal battles, which may attract punitive fines and sanctions.
If I was a marketing executive, I would create and implement a policy against greenwashing. The main reason for the policy is to avert negative consequences, such as loss of customers, reputational damage, inability to retain current personnel and attract better talent, and costly legal sanctions such as fines and imprisonment (D’Alessandro, 2014). These negative outcomes can be avoided by making accurate social responsibility claims and ensuring strict adherence to health, ingredient, and environmental standards in advertising and other business activities and practices.
References
D’Alessandro, N. (2014). 7 sins of greenwashing (and 5 ways to keep it out of your life). EcoWatch.
Torelli, R., Balluchi, F., & Lazzini, A. (2020). Greenwashing and environmental communication: Effects on stakeholders’ perceptions. Business Strategy and the Environment, 29(2), 407-421.