We often hear ‘greenwashing’ word in any conversation, discussion, news or read it on newspaper. However, only few of us have understood what it is.

According to Cambridge dictionary, greenwash is “an attempt to make people believe that your company is doing more to protect the environment than it really is”.

According to Merriam-Webster’s Collegiate Dictionary, ‘Greenwashing’ is derived from ‘green’ and ‘brainwashing’ which means “a forcible indoctrination to induce someone to give up basic political, social, or religious beliefs and attitudes and to accept contrasting regimented ideas”.

From those two definitions, it can be summarizing that greenwashing is activities by a company or an organisation that are intended to make people think that it is concerned about the environment, even if its real business actually harms the environment. Greenwashing activity can be undertaken by deliberately disseminate positive information about their environmental performance without full disclosure of less favourable activities (Lyon and Maxwell, 2011). In other words, companies that are practising greenwashing give misleading environmental information to other parties and fail to reveal wrongdoing activities.

Some studies conclude that greenwashing is conducted not only by companies but also by governments, NGOs, some others. Governments, public sector organisations, individual politicians and even NGOs have all been criticised for communicating false progress on environmental issues. Some factors can be the external drivers of greenwashing include regulators and stakeholders (e.g., consumers, investors, or competitors). Weak and uncertain regulations are mentioned as having a severe impact on greenwashing activity. Moreover, lack of enforceable standards for voluntary and even some mandatory non-financial reporting, with only guidelines, such as GRI, existing, together with little requirement for assurance of information provided,

Several researchers conclude that some companies practise “greenwashing” to gain, maintain, or improve their reputation, which can lead to gaining of legitimacy (Castilla-Polo and Sánchez-Hernández, 2020).

References:

  • Castilla-Polo, F., & Sánchez-Hernández, M. I. (2020). Testing Social and Environmental Disclosure-Reputation Relationship: A Longitudinal Two-Way Analysis. Sustainability Accounting, Management and Policy Journal, ahead-of-print(ahead-of-print). doi:10.1108/sampj-11-2019-0409
  • Lyon, T. P., & Maxwell, J. W. (2011). Greenwash: Corporate Environmental Disclosure under Threat of Audit. Journal of Economics and Management Strategy, 20(1), 3–41.

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