Article by Check Odulio, contributing writer
Greenwashing is on the rise, and it poses a direct threat to your business.
This deceptive practice involves making exaggerated, unsupported, or false claims about a company’s environmental initiatives, leading consumers to believe that the company is more environmentally responsible than it actually is.
As businesses strive to keep up with the increasing demand for sustainability, Greenwashing is becoming an alarming issue not only for consumers but for fellow businesses like yours.
Two Crucial Ways Greenwashing Can Impact Your Business:
- Enabling Greenwashing Companies to Exploit an Ever-Growing Customer Base
77% of consumers prioritize sustainability as a key deciding factor in their purchase. That’s three out of four of your prospects.
Does this preference translate into actual purchases or merely remain as survey responses?
The answer is clear: consumers follow through with their wallets. This buying preference is evident in the fact that 93% of consumers either maintained or increased their purchases of sustainable products. +25% of consumers have already switched vendors due to sustainability; the next 30 – 40% is in play right now. Someone is going to win this business.
How big of an industry are we talking about? Per this FutureTense talk, approximately $100 Trillion will be spent on sustainability-related products and services in the coming years.
Unfortunately, amid this promising industry growth, some companies intentionally engage in greenwashing to capture a significant share of this multi-trillion-dollar market. The good news is 80% of consumers DISBELIEVE a company’s sustainability claims if not supported by a valid 3rd party verification. But this does not stop the greenwashing, due to the huge financial potential.
The question is, even if they win 20% of the consumers looking for sustainability products, how much of your market share are you willing to let these greenwashing competitors erode?
Further, what if a competitor becomes certified as sustainable and goes after your clients with a genuine sustainability claim? How much time and money will it take to win back those clients after losing them?
- Risks of Reputation Damage and Legal Penalties Due to Greenwashing
Suppose you decide to adapt to the preferences of customers with the genuine intention of reducing your company’s environmental impact. Great! But be aware that you still run the risk of falling into the trap of greenwashing and the penalties that come with it.
Any unsubstantiated sustainability claims within your business practices can severely tarnish your reputation and ultimately lead to customer attrition. Consumers are now better informed in this realm, making them more skeptical of companies’ environmental claims. As we reported above, 80% of them do not believe a company’s claims that are not verified via a 3rd party certification. Further, there is an increasing number of sustainability advocacy groups hunting greenwashers. Here is an example on the global stage. So, the risk of being caught is higher than ever before.
Tomas Gonsorcik, co-chair of the American Association of Advertising Agencies’ strategy committee states,
“Given the volume of green, rainbow, and woke washing in the industry and accusations of all that in recent years, I believe any brand that is looking into its future and trying to drive sustainable growth for its business needs to get real about these claims,” he said. “I think regulation should complement that.”
Adding to the brand-image damage of being exposed as a greenwasher, there are now fines attached to same. Many countries already have established fines and many more will follow. As an example, the FTC is now considering setting rules to gain the ability to levy civil fines on deceptive environmental marketing claims. This civil penalty can reach $50,000 per violation.
Greenwashing is a grave concern that can jeopardize your SME business, both externally and internally. Seeking third-party certification can provide a solution. Pursuing the world’s premier environmental sustainability certification program, the Edenark Group ISO14001 Certification Program, offers not only tangible evidence to support your sustainability claims, helping you win those consumers looking for certified sustainable companies; but also facilitates actual positive environmental changes that help the planet and all your stakeholders.
Don’t let the threat of greenwashing linger over your business.
Schedule a call with Edenark Group to safeguard your integrity and differentiate from your competition.