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What is Greenwashing? How Can I Spot It?

What is greenwashing?

Greenwashing is defined as “activities by a company or an organization that are intended to make people think that it is concerned about the environment, even if its real business actually harms the environment.” Essentially, it is using environmental themes to brand a company as more green or ethical than they really are to make money. Companies who greenwash reap the benefits of appearing sustainable (a consumer trend $$$) while not having to make the actual changes to their business.   

Not all companies practice greenwashing maliciously. It can be a misunderstanding on both the producer’s and the consumer’s end. Even so, unintentional greenwashing still spread false information about what is and isn’t sustainable and can mislead conscious customers into supporting brands they disagree with.  

Why is greenwashing harmful?

Greenwashing misleads and deceives consumers and results in people purchasing services and goods from companies that don’t align with their values. You could end up supporting a company that isn’t actually environmentally friendly at all and is actively involved in the prevention of climate legislation.

In some countries, greenwashing is not only unethical but illegal. The EU is introducing accountability legislation that will come into force in 2023. UK Advertising Standards Authority (ASA) has also executed bans on the bank HSBC due to greenwashing advertisements 

What are examples of greenwashing?

Vagueness: one of the easiest ways to greenwash lies in the ambiguity of statements. This can be in company messaging, or packaging and often includes phrases like ‘new and improved,’ ‘non-toxic,’ or ‘better for the planet.’ Improved how? Better for the planet compared to what? Non-toxic, I would hope so. These statements are meaningless but imply that something good is being done in this company that you won’t find elsewhere.  

Selective Disclosure: companies often cherry-pick the best statistics to showcase in their reports and websites. They may highlight positive environmental facts about their products meanwhile keeping on the down low any negative statistics.  

Empty Pledges: A typical example of greenwashing is when a company makes a public commitment to the environment (often titled a pledge) while quietly lobbying to avoid regulation or while their business makes a significant harmful environmental impact; they do not attempt to mitigate that.  

Suggestive Imagery: Sometimes, all it takes to greenwash is to market products in green or environmentally-themed packaging. Think leaves, green, and nature scenes, implying that the product is kind to the environment and sustainably sourced. Some brands go as far as to incorporate icons that look similar to the stamp of approvals of environmental certifications.   

These are just a few examples, but greenwashing can look like many things across the business. The strategies adopted by beauty brands compared to corporate finance firms will look different, but how to combat greenwashing remains the same across the board.  

How can I spot greenwashing?


Spot the buzzwords and go beyond to look for evidence of being environmentally sustainable. Is the brand accredited by the relevant bodies that back up their claims of being ‘sustainable’ or ‘eco’? These terms are not regulated, so any brand can say they are ‘eco,’ but looking for signs of a 3rd party giving their stamp of approval can help overcome this. Seals of approval to look out for include B corporation, certifications of Fair Trade, and Forest Stewardship Council.  


Did something catch your eye? Did this brand’s logo recently turn green? Has the plant-based brand previously been a big player in the dairy or meat industry? The company may be turning over a new leaf (pardon the pun). Still, realistically, it is more likely they have a good PR and Marketing department that will have seized the opportunity to market the company in a green light. See what others are saying about the brand change online, and it will quickly become clear which companies are genuine.  


Being a conscious consumer doesn’t have to be laborious. Check online and see what others are saying – there are a variety of rating platforms out there vetting the sustainability of products and companies so you can make informed choices. And if you’re not sure, ask a friend. Perhaps they’ve researched this brand before, too – share the knowledge!  


You are savvier than you may think. Just take a moment and think. Does shipping a $2 garment from Southeast Asia to the US really shout sustainable and ethical? Does the same product with green packaging really change what’s on the inside? Often the answers are in plain sight; trust your instincts!  


Once you’ve secured companies you’re confident are not greenwashing and make intentional positive contributions to the world, SHOP WITH THEM. Cast your vote into the economy and let the market know that you care and want to see legitimate sustainability win. Every time you spend money, you vote with your dollars and form consumer trends that will enforce change. Whether you have $1 or $100, moving from harmful greenwashing brands to legitimate, ethical brands can make genuinely sustainable operations a more profitable option.

To hold businesses accountable, we need to understand the game of greenwashing, how to spot it, and call it out. To learn how FLIT Invest integrates our anti-greenwashing commitment and how we establish accountability, you can read these articles FLIT Invest Embeds As You Sow Fund Scores to Deliver Sustainable Portfolios and A Guide To FLIT Invest’s Impact Metrics. Alternatively, if you have any further questions about our commitment to anti-greenwashing, we are more than happy to share, and you can contact us at [email protected] !  

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