Greenwashing or Greenhushing? False Eco Claims Cause Pullback

Fashion retailer H&M prominently featured “Sustainability Profiles” in sustainability marketing campaigns for its products, and yet a dress claimed to be made with 20% less water on average was actually made with 20% more water, according to a class action lawsuit against the chain. Bumble Bee and Conagra Brands claimed their seafood products were environmentally sound—until a Greenpeace investigation uncovered environmental harm and human rights violations in the company’s supply chain. 

That’s not all. Kohl’s and Walmart marketed dozens of rayon textile products as “sustainable” bamboo produced with ecofriendly processes. What the brands didn’t tell consumers, according to a Federal Trade Commission lawsuit that resulted in a $5.5 million settlement, is that converting bamboo into rayon requires using toxic chemicals and creates hazardous pollutants. 

And get this: Even a company with “organic” in its name—Miami Beach-based retailer Truly Organic Inc.—was ordered to pay $1.76 million to settle a FTC complaint alleging that its products were neither “100% organic” nor “certified organic” by the USDA. The nationally marketed bath and beauty product brand also claimed its products were vegan, though they contained non-vegan ingredients.

“To know if a product is truly organic, consumers have to rely on companies to be truthful and accurate,” said Andrew Smith, director of the FTC’s Bureau of Consumer Protection, in a statement. “That’s why we’ll hold companies accountable when they lie about their products being organic, especially when they’ve used fake certificates and ignored USDA warnings.”

Incentive To Market Products As Green

Sustainability and climate change are high on the US government’s agenda. Consumers, too, increasingly value brands that care about the environment, while marketers know that authenticity and social consciousness can pay off in bigger sales. 

In fact, two-thirds of Americans are willing to spend more on sustainable products, according to a 2021 Business of Sustainability Index (BSI) report. Even more people—especially millennials—are concerned with the environmental impact of their products and consider eco-friendliness as a factor when making purchases. 

These trends have benefited companies like Patagonia, known for its environmental activism. But it’s also given an edge to brands like H&M willing to hedge the truth, especially since the BSI report showed that most Americans don’t know how to evaluate products that purport to be environmentally friendly properly. In other words, we’re easily misled.

The uptick in greenwashing has prompted the FTC to undertake another revision of its Green Guides and led to an increasing number of high-profile federal class actions. This year alone, at least 10 US companies will incur $5 million or more in greenwashing fines. Similarly, the European Union is cracking down on false or deceptive green claims with proposed new rules and penalties. 

“Consumers are increasingly conscious of how the products they buy affect the environment and depend on marketers’ environmental claims to be truthful,” said Bureau of Consumer Protection Director Samuel Levine. “We look forward to this review process and will make any updates necessary to ensure the Green Guides provide current, accurate information about consumer perception of environmental benefit claims. This will both help marketers make truthful claims and consumers find the products they seek.”

Scrutiny May Lead To Silence

The current Green Guides stipulate that marketers should not make general claims like “green” or “eco-friendly.” They should also qualify claims with specific environmental benefits, but that’s not always easy to do. Those kinds of hurdles—along with the media scrutiny and legal backlash against greenwashing—are causing some companies to pull back on their sustainability marketing in a new trend dubbed “greenhushing.”

For example, customer experience marketing platform Emplifi reported a 52% drop in U.S. brand posts on Instagram that used sustainability hashtags between 2019 and 2021, according to AdAge. And 76% of CMOs said they would like to communicate more on their green initiatives but fear greenwashing, according to Forrester.

A report by climate project firm South Pole found that more and more climate-aware brands are supporting their net zero commitments with science-based targets, increasing budgets, and expanding their sustainability teams. That’s a good thing.

But one in four of these 1,220 global companies surveyed do not plan to discuss them. “This means many companies with robust targets are going green and then going dark,” the report concluded. And that’s a mistake, George Favaloro, head of South Pole climate solutions, North America, told AdAge.  

“The best practice is to do the work on understanding your carbon footprint, set a target, hopefully an ambitious target, and then get to work on reducing your carbon emissions. A very important part of that is to talk about what you’re doing,” he said. “It’s important that we all inspire each other and we show each corporation is stepping up and being responsible and has figured out how to take action. That’s the kind of message that’s really powerful.”