So what is greenwashing?

Greenwashing is an attempt to make people believe that your business is doing more to protect the environment than it actually is. It starts with deceptive marketing that overstates or makes false claims about the business’ climate activity, environmental credentials, or products.

Greenwashing is a concept that many small business owners often struggle with. As a small business owner, you want as many customers as possible to know about the great things your business is doing in terms of being ethical, sustainable, and climate-friendly. And, as they should be, these are often the attributes that many consumers are drawn to. Herein lies the issue: it is often unclear as to at what point the business has crossed the line and started to make claims that overstate what they actually are doing for the environment (i.e. greenwash).

Businesses fear doing good

More recently, some of the world's biggest carbon emitters, such as conventional energy companies, have attempted to rebrand themselves as champions of the environment. Products are greenwashed through a process of renaming, rebranding, or repackaging them. Greenwashed products might convey the idea that they're more natural, wholesome, or free of chemicals than competing brands. Consumers become skeptical (and rightly so), but such marketing backed by large businesses really does spoil it for smaller businesses wanting to make real changes to their practices and support climate initiatives.

We’re not saying that big business doesn't want to make a positive change, and in some cases some climate initiatives wouldn't even get off the ground without the funds that big business can provide. It comes down to the intention: is it just to market themselves to appear cleaner and greener, or is it genuine policy and social responsibility?

The negativity seen around some higher profile cases seems to have flowed down and impacted smaller business owners, who, out of fear, are silenced in talking about or even doing something positive for the environment and sustainability in general. Unfortunately, soap box social media and media, in general, tend to look for and focus on negative aspects in order to sensationalize or scandalize to draw in the crowd.

Accidental greenwashing

Is accidental greenwashing a real thing? Yes, and a small business could inadvertently fall victim to it – typically thanks to the combination of good intentions and bad math. What do we mean by this? Well, it all comes down to incorrectly measuring the carbon footprint of a business. 

Carbon is complex, and it is common to see businesses fail to understand and account for emissions within their entire value chain. These value chain emissions – also called scope 3 emissions – don’t originate within businesses' own walls, and, as such, are difficult to measure. What follows is a common type of unintentional greenwashing: when businesses claim to be “verified carbon neutral” without factoring in their scope 3 emissions. Since scope 3 accounts for on average 92% of the business's carbon footprint, not addressing them leaves a very large gap in a company’s environmental efforts. Getting this wrong can cause huge reputational damage to a business. To avoid the unreliability of internal or consultant-based manual measurements, not to mention the time investment required, we advise that businesses should turn to software-based carbon accounting.

It's about progress, not perfection

According to the ATO, approximately 98% of Australian businesses are classified as small to medium. If we are to make a real impact on our climate, each one of these businesses needs to be empowered to make better-informed decisions and take the appropriate action, regardless of how small this may be, without the fear of being targeted for doing so. After all, it's either this, or the alternative of doing absolutely nothing at all.

Every good business wanting to take positive climate action needs to start somewhere. Carbonhalo and other platforms like Sustainable Choice aim to provide a facility for businesses to begin their sustainable journey by providing free tools to help address their business impact.

Understanding the impact a business has on the environment opens up the opportunity to rethink areas and specific processes within the business to reduce its overall emissions. It's not going to be perfect but it's a start, and, combined with reduction, offsetting unavoidable emissions and continued monitoring can help these businesses on a low carbon pathway. 

It’s worth mentioning that a goal of ‘Net Zero’ for most small to medium businesses is fanciful; the availability of current technology plus the cost of carbon or climate certification, as well as carbon accounting economics, would put most small businesses out of business.

How to avoid greenwashing:

• All businesses should hold themselves accountable for their carbon footprint. This starts by acknowledging you have one, honestly communicating what your business is doing about it, and being transparent about the limitations you face in reducing and offsetting it. As a starting point, this alone will avoid a lot of speculation and skepticism.
• Businesses need to put in the work. This starts by learning as much as possible about your supply chain, which parts of it you are responsible for, and what you can do to reduce your impact. You can enlist the help of Carbonhalo to do this for you.
• Do not use vague language e.g. "We are Green” or “All Natural” without demonstrating genuine evidence for how this is true, including right across your supply chain and production process.
• Never overstate the action you have taken – very few (if any) businesses are perfect when it comes to their environmental impact, so don’t try to appear that you are doing more than you are.
• Don’t try to be perfect – the goal is to progress over perfection
• Do not use logo marks and certification marks if you have not formally qualified for them