Published on February 8th, 2008 | by Stephanie Evans

What Everybody Ought to Know About Greenwashing

Green is the new “hot” word, both in advertising and in the annual reports of many of the companies who want our investment dollars. Many companies want to at least appear to be environmentally responsible, working toward reducing their global warming footprint. For us, finding out the truth behind the hype is not always easy…

Companies Employ Greenwashing Techniques to Win Dollars

In order for us to make socially responsible investing decisions and support those companies that are making a genuine eco effort, it is important that we distinguish the truly green companies from those that are simply using greenwashing techniques to appear green.

At its simplest, greenwashing is the environmental equivalent of whitewashing. In other words, it is a company’s attempt to spend more dollars trying to APPEAR more environmentally responsible than actually working to BE more environmentally responsible. But how can we tell if a company is greenwashing?

For now, it appears to be up to us as individuals. While Federal Trade Commission (FTC) hearings have started in Washington, it may be a while before we see better regulation in this area. For example, with those companies that offer carbon offsets, it’s really necessary to explore just exactly how and where the offsets are applied, and that is still a complicated process.

Fortunately, investors are getting a bit of help in the research department. The University of Oregon and EnviroMedia Social Marketing have teamed up to create a popular, up-and-coming resource for investors interested in knowing what their companies of choice are really up to: the Greenwashing Index. This resource utilizes the power of the Internet and YouTube, in particular, to identify companies that are greenwashing, primarily through the ads that they run. The Index notes five criteria for analyzing a company’s ads for greenwashing.

Also check out the Six Sins of Greenwashing, courtesy TerraChoice, which outlines six simple guidelines for spotting a greenwasher.

While these resources are a good start, it really has to go viral before it can begin to have a significant impact on how we conceptualize the power behind using our dollars for global benefit. This means that people who have true knowledge of the issues must be encouraged to come forward and participate in the rating process, especially in the initial stages.