And the common practice — where products are marketed as being environmentally friendly or “green,” even if they may not be as sustainable as they claim — is very effective, particularly with individuals who are concerned about the environment according to a recent study by a global consulting firm.

To combat its effects, it is important to be aware of its tactics and to do research to determine the true environmental impact of products.

Research has repeatedly demonstrated that companies and brands can benefit from presenting themselves as environmentally conscious.

Menno D.T. de Jong, a communications professor at the University of Twente in the Netherlands, noted that expressing a commitment to sustainability can be advantageous for businesses, as it often involves making claims that are hard to verify or prove.

This makes it difficult for consumers to determine the accuracy of claims or evaluate their validity. Even when presented with all the facts, some consumers may still not fully understand or believe that a company’s green claims may not be entirely true.

When confronted with third-party information that contradicts a company’s environmental claims, consumers may not necessarily believe that the brand is lying outright.

Behavioral Insights Team, a global consulting firm, recently conducted a study to understand the susceptibility of consumers to greenwashing and whether they can learn to be more skeptical.

In an experiment conducted in Australia, approximately 2,400 participants were shown advertisements for three fake energy companies. The study aimed to determine the effectiveness of greenwashing and whether individuals could become more discerning in evaluating environmental claims.

One advertisement highlighted a company’s supposed environmental efforts, showing a woman in a gray blazer standing in front of a skyscraper with the caption “Our offices are green.” However, the ad did not provide any information about whether the company produces and sells fossil fuels.

A second ad featured a woman in a red blouse and three hanging light bulbs, asking the viewer “How can you save energy?” and providing a carbon footprint calculator. This ad did not make any claims about the company, but rather shifted the responsibility of energy conservation to the consumer.

The third energy company ad focused on job creation, but made no mention of the environment.

It’s worth noting that all three of these companies were fictional and created specifically for the experiment.

In the experiment, more than half of the subjects (57%) believed that the companies featured in the first two advertisements (the one with the green office claim and the one with the carbon footprint calculator) had superior “green credentials” compared to the third energy company that emphasised job creation.

Ravi Dutta-Powell, who worked on the study, commented that “we assume everyone is rational, that an educated consumer interrogates the market. That’s not happening.” The results of the experiment suggest that consumers may be easily swayed by greenwashing, despite their level of education.

The subjects of Dutta-Powell’s experiment were randomly selected to receive interventions designed to protect them against misinformation.

One group was provided with information about greenwashing in general, while another group was invited to create a misleading marketing campaign for a fictional energy company, effectively allowing them to experience the perspective of a greenwasher.

A third group, serving as the control, received no prior information and was simply shown the fake advertisements. These interventions were meant to test the effectiveness of different methods of increasing skepticism towards greenwashing.

The results showed that the two groups that received the intervention were slightly more skeptical. However, the difference was relatively minor. It is unclear how long the effects of the intervention would persist.

In France, companies that make “carbon neutral” claims will be required to provide verifiable evidence to support these claims starting in January 2023. This regulation aims to increase transparency and help consumers make more informed decisions about the environmental impact of products.

Norway’s consumer protection agency recently cautioned the fast fashion company H&M that the tool it was using, the Higg Materials Sustainability Index, was insufficient as a basis for the environmental claims made in its marketing efforts.

The agency has urged the company to provide additional evidence to support its environmental claims.

In addition, a British government agency recently launched investigations into three fashion brands to examine their environmental claims more closely. These actions demonstrate a growing trend towards increased scrutiny of companies’ environmental claims in order to ensure that they are accurate and not misleading to consumers.

The US Securities and Exchange Commission (SEC) is examining investment funds that claim to have strong environmental, social, and governance (ESG) metrics. In a statement released this spring, the SEC emphasised that companies offering investments must fully and accurately disclose what they are selling and act in accordance with their disclosures.

In other words, the regulator expects companies to be transparent and honest about their environmental claims.

The SEC is working to strengthen standards for greenwashing — we’ll see how that pans out as we venture deeper into 2023…