VW scandal puts greenwashing in the spotlight

In the rush to be seen as environmentally friendly, brands often exaggerate claims or simply make things up

David Gelles
First Published19 Oct 2015
No matter how hard Volkswagen works to resolve the emission scandal, the episode is likely to live on as the most egregious example of greenwashing. Photo: AFP<br />
No matter how hard Volkswagen works to resolve the emission scandal, the episode is likely to live on as the most egregious example of greenwashing. Photo: AFP

Until recently, Volkswagen was waging a relentless campaign to portray itself as an environmental steward, its cars on the vanguard of a clean energy revolution. The company promoted diesel as a low-emissions alternative to petrol and spent $77 million this year in the US market to advertise its diesel cars, often proclaiming their greenness.

As everyone now knows, at the same time Volkswagen was waging this eco-friendly public relations offensive, engineers at the German auto maker had rigged 11 million of its supposedly clean diesel engines with software that tricked emissions tests, allowing the cars to spew far more pollutants than legally allowed.

No matter how hard Volkswagen works to resolve this crisis, the episode is likely to live on in infamy as the latest and perhaps most egregious example of greenwashing.

Greenwashing, when a company tries to portray itself as more environmentally minded than it actually is, has intensified in recent decades as consumers have warmed to sustainable and organic products and services.

Brands, trying to capitalize on that trend, often try to outdo one another with eco credentials. But in the rush to be seen as green, companies often exaggerate claims or simply make things up.

“Social and environmental responsibility should not be a competitive sport,” said Daniel Korschun, a professor of marketing at Drexel University who has studied greenwashing. “Not every company can have the smallest carbon footprint or donate the most to charity.”

Don’t tell companies that. These days, greenwashing is spreading like a weed.

TerraChoice, a consulting firm that studied the phenomenon, found that 95% of the products marketed as eco-friendly had committed at least one of what it called the “seven sins” of greenwashing. Those sins range from relatively benign offences like using weak data to more deliberate deceptions like inventing bogus certifications.

“The prevalence of greenwashing has skyrocketed in recent years,” Magali Delmas, a professor of management at the University of California, Los Angeles, wrote in a paper published in 2011 in California Management Review. “More and more firms have been combining poor environmental performance with positive communication about environmental performance.”

Regulators, however, have found greenwashing nearly impossible to stop. In 2012, the Federal Trade Commission (FTC) issued guidelines—called Green Guides—“designed to help marketers ensure that the claims they make about the environmental attributes of their products are truthful and non-deceptive”.

The 2012 recommendations modified rules that were introduced in 1992 and updated in 1996 and 1998. But despite the efforts of the FTC, a review of published reports in recent years turns up numerous instances of companies called out for their environmental exaggerations.

One common form of greenwashing is to simply make a dubious claim without having any proof to back it up. Lululemon Athletica, the athletic apparel maker, was selling a line of clothes made partly out of seaweed that supposedly had health benefits, including releasing amino acids, minerals and vitamins into the skin. But an independent lab’s analysis of the fabrics found no meaningful difference in mineral content between the line of clothing and standard cotton T-shirts. After coming under pressure from regulators in Canada, where Lululemon is based, the company stopped marketing the line.

Then there is labelling. Companies looked to take advantage of the EnergyStar seal, the government’s stamp of approval for energy-saving products. Refrigerators made by LG and Samsung, among others, were revealed to consume far more energy than the manufacturers claimed. After an investigation into the EnergyStar programme by the Government Accountability Office, the Environmental Protection Agency (EPA) tightened EnergyStar certification standards.

Another tried-and-true method of greenwashing is to promote a small act of environmental stewardship and hope people forget about a company’s broader environmental impact.

Kimberly-Clark, the maker of Huggies disposable diapers, introduced a “pure and natural” line, billed as a “super-premium diaper that includes natural, organic materials and ingredients to provide gentle protection for new babies, as well as initial steps towards environmental improvements, without sacrificing performance”.

This year, Huggies customers filed a class-action lawsuit against Kimberly-Clark, claiming they had been misled. The diapers included non-organic materials. “The diapers are neither pure nor natural because they contain unnatural and potentially harmful ingredients such as polypropylene and sodium polyacrylate,” the lawsuit reads. The company would not comment on ongoing litigation.

Volkswagen is hardly the first auto maker to be called out for exaggerated claims. Last year, South Korean auto makers Kia and Hyundai paid $300 million to settle with the US justice department and the EPA after overstating the gas mileage for 1.2 million vehicles.

But Volkswagen’s efforts to deceive regulators and customers while trading on the supposed cleanliness of its diesel engines make it an exemplar of the least frequent—and most serious—form of greenwashing: outright lying.

“That’s what makes this case quite incredible,” Delmas, the UCLA professor, said in an interview.

Given that German auto makers previously had a reputation for beyond-reproach excellence, Volkswagen’s greenwashing came with a particularly heavy cost.

“Germany is perceived to be a very green country, with its people being very responsible,” Delmas said. “If you can’t trust the Germans, who can you trust?”

Perhaps no one. As TerraChoice found, almost every green product is marketed with some exaggeration.

This leaves consumers in a bind. While plenty of companies are bringing more sustainable products to market, others appear less interested in environmental stewardship and more interested in bamboozling their customers.

The FTC continues to take actions against companies that violate the Green Guides—like plastic-lumber makers that overstate their products’ recycled content or the manufacturers of dog waste bags falsely marketed as biodegradable. This month, the FTC said it was investigating Volkswagen, too.

Still, said Jon Leibowitz, a partner at the law firm Davis Polk & Wardwell who was head of the FTC in 2012 when the most recent Green Guides were issued, even the best enforcement won’t prevent companies from greenwashing.

“Having laws on the books and a cop on the beat will generally help reduce the number of misleading claims,” he said. “But there will always be people and companies that cross the line.”

©2015/The New York Times

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
HomeindustrymanufacturingVW scandal puts greenwashing in the spotlight

Most Active Stocks

Ashok Leyland

210.55
10:29 AM | 24 MAY 2024
-1.85 (-0.87%)

Bharat Electronics

297.10
10:28 AM | 24 MAY 2024
8.7 (3.02%)

GAIL India

204.40
10:29 AM | 24 MAY 2024
3.95 (1.97%)

Tata Steel

174.80
10:29 AM | 24 MAY 2024
-0.65 (-0.37%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Inox Wind

164.20
10:21 AM | 24 MAY 2024
13.25 (8.78%)

BHARAT DYNAMICS ORD

1,527.50
10:22 AM | 24 MAY 2024
120.8 (8.59%)

Amara Raja Energy & Mobility

1,209.10
10:17 AM | 24 MAY 2024
94.85 (8.51%)

Vodafone Idea

15.11
10:29 AM | 24 MAY 2024
1.06 (7.54%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    73,829.000.00
    Chennai
    73,325.000.00
    Delhi
    73,252.000.00
    Kolkata
    73,469.000.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    99.84/L0.00
    Chennai
    100.88/L0.00
    Kolkata
    103.94/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumFor youGet App