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  • Writer's pictureHayaa Hassan

Greenwashing: A Growing Concern in the Age of Sustainability

Greenwashing is the process that many businesses have deceitfully used in order to make their businesses seem more environmentally efficient than they are in reality. As society becomes more environmentally aware, businesses are using greenwashing as an effective marketing technique and yet are not contributing to any environmentally friendly practices. Especially with businesses which target younger consumers, greenwashing has become an increased issue in the ESG industry.

Greenwashing has given businesses the impression that they can use cost efficient methods while still gaining recognition from their socially and environmentally aware consumers. It has had a severely detrimental effect on the actions and practices of businesses and must be solved. H&M’s greenwashing scandal last year was one of the most well known brands attacked and shed light on the importance of transparency and ethical practices in the fashion industry. After facing a lawsuit from American marketing student Chelsea Commodore who filed a class-action lawsuit against H&M in New York federal court, accusing the company of greenwashing its products, H&M stated that it is continually working to make its range more sustainable and that it is committed to transparency and focused on improving the sustainability of its products. The lawsuit showed us, however, that even well known businesses who underwent screening and regulations could exploit manufacturing and sales practices to greenwash, highlighting the importance of ESG reports and routine checking.

It is not just consumers and the environment that are being affected by these practices. Businesses are increasingly losing consumer trust and suffering a negative impact on their brand image as more greenwashing cases are highlighted through the media. Having products labelled as “consciously better for the environment” to attract consumers versus their cheaper alternatives, even though both products are identical, leads to legal cases which have a lasting impact on brands. Businesses pushing these boundaries therefore, although initially beneficial for their cost efficiency, facelong term effects which can be prevented by their following of ESG regulations.

The greenwashing scandals that are taking over businesses can be prevented through effective adherence to standards and frameworks. Following established standards and frameworks such as the Global Reporting Initiative (GRI) which provides widely used sustainability reporting standards and helps businesses and other organisations take responsibility for their impacts by providing them with the global common language to communicate those impacts alongside the Sustainability Accounting Standards Board (SASB) which provides industry-specific ESG standards that help companies disclose comparable and reliable information to investors can dramatically impact how businesses conduct their manufacturing and promotion of products without fabricating an ESG agenda. ESG standards are therefore the key to demolishing the practice of greenwashing, leading to a net benefit to businesses, consumers and the environment.

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