THE RISKS OF GREENWASHING

Staff writer
Aug 2, 2022
2 min read

Greenwashing is the act of misleading the public about an organisation's environmental or sustainability practices or deceiving the public about how eco-friendly a product or practice is.

Environmental or sustainability claims have been “greenwashed” if they are vague, false, omit important information or are misleading. Greenwashing is a way to convince the public that an organisation is making positive environmental or sustainability choices when this is not the case. This is often done through the use of eco-conscious buzz words such as "environmentally friendly", "reduced footprint", "green" and "sustainable" in an effort to convince the public that the relevant product or practice is more natural, wholesome, or free of toxins than that of competitors, or that the organisation involved is doing more for the environment or sustainability than it actually is.

The need to combat greenwashing came under the spotlight at the United Nations COP26 summit in November 2021, when it was highlighted that countries around the world are likely to see an increase in action being taken against organisations who greenwash. Perhaps the best-known example of greenwashing is "Dieselgate", the 2015 emissions scandal which resulted in action being taken against Volkswagen after it installed emissions-cheating devices in its vehicles.

South Africa currently has no laws or guidelines against greenwashing, however a shift in accountability standards is underway, for example the JSE released its Sustainability and Disclosure Guidance in June 2022. Its aim is to assist listed companies by enabling better sustainability disclosure.

The South African public has become hyper-vigilant about sustainability and many of us have refused a plastic straw or placed an animal-tested product back on the shelf. As sustainability concerns grow, so does our desire to hold organisations to account, particularly if they are dishonest about their own sustainability practices.

Greenwashing may lead South African companies to face civil liability claims if their greenwashing is considered to be a breach of reporting standards or constitute false advertising. Company directors may also face personal consequences for failing to act in the best interests of the company.