Part 6: Duties to the Environment
85 What is “greenwashing”?
One critique of ESG reporting is that it provides an opportunity for companies to mask their sustainability efforts. Carrying out superficial CSR efforts that merely cover up systemic ethics problems in this inauthentic way (especially as it applies to the environment), and acting simply for the sake of public relations is called greenwashing. To truly understand a company’s approach toward the environment, we need to do more than blindly accept the words on its website or its advertising.
Case From the Real World
Ben and Jerry’s Ice Cream started as a small ice cream stand in Vermont and based its products on pure, locally supplied dairy and agricultural products. The company grew quickly and is now a global brand owned by Unilever, an international consumer goods company co-headquartered in Rotterdam, The Netherlands, and London, United Kingdom.
According to its statement of values, Ben and Jerry’s mission is threefold: “Our Product Mission drives us to make fantastic ice cream—for its own sake. Our Economic Mission asks us to manage our Company for sustainable financial growth. Our Social Mission compels us to use our Company in innovative ways to make the world a better place.”
With its expansion, however, Ben and Jerry’s had to get its milk—the main raw ingredient of ice cream—from larger suppliers, most of which use confined-animal feeding operations (CAFOs). CAFOs have been condemned by animal-rights activists as harmful to the well-being of the animals. Consumer activists also claim that CAFOs contribute significantly to pollution because they release heavy concentrations of animal waste into the ground, water sources, and air.
Coca-Cola provides another example of practices some would identify as greenwashing. The company states the following on its website:
“Engaging our diverse stakeholders in long-term dialogue provides important input that informs our decision making, and helps us continuously improve and make progress toward our 2020 sustainability goals . . . We are committed to ongoing stakeholder engagement as a core component of our business and sustainability strategies, our annual reporting process, and our activities around the world. As active members of the communities where we live and work, we want to strengthen the fabric of our communities so that we can prosper together.”
Let us take a close look at this statement. “Engaging stakeholders in long-term dialogue” appears to describe an ongoing and reciprocal relationship that helps improvement be continuous. Commitment to “stakeholder engagement as a core component of business and sustainability strategies” appears to focus the company on the requirement to conduct clear, honest, transparent reporting.
Currently 20 percent of the people on Earth consume a Coca-Cola product each day, meaning a very large portion of the global population belongs to the company’s consumer stakeholder group. Depending on the process and location, it is estimated that it takes more than three liters of water to produce a liter of Coke. Each day, therefore, millions of liters of water are removed from the Earth to make Coke products, so the company’s water footprint can endanger the water supplies of both employee and neighbor stakeholders. For example, in Chiapas, Mexico, the Coca-Cola bottling plant consumes more than one billion liters of water daily, but only about half the population has running water.28 Mexico leads the world in per capita consumption of Coke products.
If consumers are aware only of Coca-Cola’s advertising campaigns and corporate public relations writings online, they will miss the very real concerns about water security associated with it and other corporations producing beverages in similar fashion. Thus it requires interest on the part of stakeholders to continue to drive real CSR practices and to differentiate true CSR efforts from greenwashing.
We can separate greenwashing into two categories: puffery, which is legal, involves making vague, non-factual claims, or creating a general appearance of sustainability in non-specific ways. Including images of a forest on a shampoo label that says “Great for the environment” are examples of puffery. In contrast, fraud occurs when a company makes verifiably false statements. A claim of “100% organic” when a company does not comply with organic regulations is this kind of statement.
Please visit “A Guide to Greenwashing” to see specific examples of additional varieties of greenwashing.
Exercises
- Does the use of CAFOs compromise Ben and Jerry’s mission? Why or why not? Has the growth of Ben and Jerry’s contributed to any form of greenwashing by the parent company,Unilever? If so, how?
- Go to Walmart.com and search through food products advertised on the site. Find an example of greenwashing.
- Some have used the term “sportswashing” to describe using sporting events to improve reputation. Read about it here. How is “sportswashing” similar to, or different from, greenwashing?
- This chapter includes content drawn from the OpenStax textbook Business Ethics, under a Creative Commons Attribution 4.0 International License (CC BY 4.0). Download for free at https://openstax.org/books/business-ethics ↵
