People care about this world we live in and they’re expressing that in how they spend and, increasingly, where they work.

That means brands - and CEOs - need to get it right when communicating.

A study by Cone Communications on corporate social responsibility (CSR) found:

87% of people would buy a product because the company advocated for issues they cared about;
76% would refuse to buy from a company after learning they supported something contrary to their beliefs.

76% of those surveyed expect companies to support climate change and that trend only looks to be growing – and will soon be impossible to ignore. Younger generations, i.e., Millennials and Gen Z are even more passionate here. Consider this:

73% of Millennials would pay more for sustainable goods as per a Nielsen report;
A study by First Insight found the same for Gen Z where 73% indicate that they would pay more;
3/4th of Millennials would be willing to take pay cuts to work for a company that’s environmentally responsible according to Fast Company.

Now think about the fact that Millennials will make up 75% of the workforce by 2025 and Gen Z is fast on its heels. Going green is going to become more and more important for all businesses in the coming years; that means actions, not just words. Going green, not just talking green.

And here’s where greenwashing comes in.

Greenwashing is the unethical practice – intentional or accidental – of making misleading or false claims about how sustainable or environmentally friendly products or services are. It’s looking environmentally friendly for the benefit of business, but not actually doing it. Or worse, doing actual harm to the environment. In essence, it’s the illusion of corporate social responsibility.

In clearer terms; it’s lying – or a dangerously close equivalent.

And as always, there are consequences for being caught in a lie.

Given all of that, if sustainability isn’t core to your brand or even a part of it, don’t make it part of your communications strategy. Period.

How Greenwashing Harms Brands’ Reputation

Deception is never a good look and serious reputational risks come with employing the tactic.

For starters, in an era where consumers are entrusting stewardship of the environment to corporations, a breach of that trust can be catastrophic as it may lead to:

Loss of Trust: Greenwashing can lead to a loss of trust among consumers, investors, and other stakeholders. When an organization makes false or exaggerated claims about its environmental practices, it undermines its credibility and creates skepticism among its stakeholders. This can damage the organization's reputation and lead to a loss of business.
Damage to Brand Image: Greenwashing can also damage an organization's brand image. When consumers perceive that an organization is engaging in greenwashing, they may view the organization as insincere or deceptive. This can harm the brand image and make it difficult for the organization to differentiate itself from its competitors.
Negative Media Coverage: When an organization is accused of greenwashing, it often receives negative media coverage. This can be especially damaging in today's social media age, where negative news can quickly go viral and damage an organization's reputation in a matter of hours.
Legal Consequences: On top of all of that, greenwashing can also lead to legal consequences. Regulatory bodies around the world have guidelines for making environmental claims, and organizations that violate these guidelines can face legal action and financial penalties. TotalEnergies, the enormous French oil and gas company, was recently hit with a greenwashing lawsuit related to their rebranding efforts. On the other side of the pond, Red Lobster, the world’s largest seafood-buying restaurant, is facing a class-action lawsuit regarding its sustainability claims.

If that torrent of eroded public trust grows into a full-fledged flood, it can lead to shareholder and stakeholder distrust and an overall loss of investor confidence.

Examples of Greenwashing - Volkswagen and H&M

What exactly does greenwashing look like in practice though? Here are a couple of “classic” examples.

Volkswagen - In perhaps one of the more egregious recent instances of greenwashing, Volkswagen had been marketing their diesel cars as being low emission while simultaneously modifying them with a “defeat device” that would help them pass emissions tests in the United States. 11 million cars were kitted with the device – 500,000 in the United States – that would control emission during testing while emitting 40 times more nitrogen oxide than was allowed in America when driving in the real world. In addition to recalling millions of cars, Volkswagen was hit with a $14.7 billion fine in the US and says the scandal has cost them nearly $35 billion. That’s to say nothing of the immense reputational damage they caused themselves.
H&M - The world of fast fashion is notoriously unsustainable so any effort to brand a company in this space as eco-friendly should be taken with a mine of salt. The clothing that fast fashion companies like H&M and Zara produce are of poorer quality and often made of non-eco-friendly synthetics like polyester (which makes up 27% of H&M’s material use). A study by Changing Markets found that “H&M’s Conscious Collection actually contains a higher percentage of synthetics than its main collection (72% versus 61%, respectively).” The Conscious Collection is so named to imply consciousness about the environment. They add that “using the UK Competition and Markets Authority’s new guidelines on green claims, we found that, of the 39% of products accompanied by a sustainability claim, a shocking 59% flouted green-claims guidelines in some way.” In other words, the majority of claims being made by these companies were misleading. Not to mention the environmental disaster that fast fashion is fueling, which TV and radio network CBS puts in stark relief; “around 15 million items of used clothing from Western countries arrive every week [to Ghana].”

Sustainability Branding Done Right

Sustainability branding, when done right, is often called green marketing and there are plenty of fine examples out there.

Patagonia - Given that their industry is about the outdoors, it’s no wonder that Patagonia does sustainability branding exceptionally well. Sustainability is core to their identity, so much so that they don’t even use the word “sustainable” because they recognize they’re “part of the problem” as their environmental action and initiatives director noted in 2021. Their mission statement reads: “Build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.” From their Worn Wear line to generating millions by giving 1% of every sale to preservation and restoration to a detailed section of their site devoted to environmental activism, their actions and branding speak to those lofty goals. There was also that time in 2016 when they donated 100% of their Black Friday sales to saving the planet – all $10 million of it.
The Body Shop - The cosmetics industry isn’t necessarily renowned for its ethics, which is something The Body Shop was having none of. They’ve been a cruelty-free company that does zero testing on animals for decades and are leading the charge for a global ban on animal-tested cosmetics, as well as advocating on various social issues. On the sustainability side, they’re well on their way to making their packaging 100% recyclable, transparently noting that they’re at 68% now and aim for 100% by 2025. In addition to gradually eliminating oil-based plastics, they’re championing in-store refill stations where consumers can buy an aluminium bottle and refill it with Body Shop products. Moreover, The Body Shop has been at the forefront of corporate social responsibility since its founding in 1976. On its 40th anniversary, it redoubled its efforts and launched the Enrich Not Exploit Commitment to become a more sustainable global business and laid out 14 targets to do so.

Best Practices – Getting Sustainability Branding Right

The good news is that it’s surprisingly simple to avoid greenwashing. You just need to focus on one key concept and build your branding around it: honesty.

Crafting your strategy from there requires the following:

Transparency – Next to honesty, transparency is king. Take a line from Patagonia’s book and own your shortcomings, then make them the basis for what you intend to improve;
Be specific – Once you’ve homed in on what you intend to do, be specific about how. Consider making real, and public, long-term commitments like The Body Shop. Allow yourself to be held accountable by being open;
Skip vague buzzwords – Just as you should be specific in your aims, you should be clear with your language. “All-natural” and “eco-friendly” don’t inherently mean anything without more context;
Avoid irrelevant claims – The famous example here is “CFC-Free”. CFCs are already banned so slapping a CFC-Free label on a product means nothing and is thus just greenwashing. Hunts made this mistake when claiming their tomatoes were non-GMO. The issue? There’s no such thing as GMO tomatoes;
Don’t use suggestive imagery or colors – Don’t just swap your logo to green and expect the public to think you’re sustainable all of a sudden. McDonald’s tried this in 2009, changing the color behind their famed M from red to green in Europe;
Get real endorsements – That means credible third-party endorsers that rely on data. Think LEED for sustainable buildings, Fair Trade Certified for foods, and so on;
Don’t lie – It’s not worth it and you’ll likely be caught eventually.

CEOs Play a Critical Role in Sustainability Communications

CEOs play a critical role in shaping a company's reputation - and the same goes for sustainability communications. They are responsible for setting the tone at the top and establishing the organization's values, vision, and mission.

To get sustainability communications right, CEOs can take several steps, including:

Define a clear sustainability strategy - CEOs can work with their teams to develop a clear and comprehensive sustainability strategy that aligns with the organization's mission, vision, and values. This strategy should include specific goals and metrics to track progress and demonstrate the organization's commitment to sustainability.
Setting the Tone - As the leader of the organization, the CEO sets the tone for the company's culture, values, and behavior. The CEO's actions and words can have a significant impact on how employees, customers, and stakeholders perceive the organization.
Acting as a Spokesperson - The CEO is often the public face of the organization and serves as the primary spokesperson for the company. This means that their words and actions are closely scrutinized by the media, investors, and other stakeholders.
Lead by example - CEOs can demonstrate their commitment to sustainability by leading by example. They can adopt sustainable practices in their own work and encourage employees to do the same. For example, they can use public transportation, implement energy-efficient practices in the workplace, and reduce waste.
Building Relationships - The CEO is responsible for building and maintaining relationships with stakeholders, including customers, employees, investors, and community leaders. These relationships are essential to building and maintaining a positive reputation.
Driving Strategic Initiatives - The CEO is responsible for driving strategic initiatives that support the organization's mission and values. These initiatives can help to build a positive reputation for the organization by demonstrating a commitment to social responsibility, innovation, and other key values.
Engage stakeholders - CEOs can engage stakeholders in sustainability initiatives by communicating with them regularly and involving them in the development of sustainability goals and strategies. They can also seek input from stakeholders on sustainability issues and use this feedback to improve the organization's sustainability efforts. This includes communicating through various channels, such as social media, the company website, and annual reports. It also includes using clear and transparent language to describe the organization's sustainability efforts.
Managing Risk - The CEO is responsible for identifying and managing risks that could harm the organization's reputation. This includes risks related to ethical lapses, regulatory compliance, environmental impact, and other areas.
Foster a Culture of Sustainability - Last but certainly not least, CEOs can foster a culture of sustainability within the organization by encouraging and rewarding sustainable behaviors and practices. This includes recognizing employees for their sustainability efforts and providing training and education on sustainable practices.

Key Takeaway

Sustainability is increasingly becoming who we are as a society – or who we want to be. It’s aspirational. With younger generations embracing the call and seeing business as a potential force for good, companies must take heed and take real steps to be part of the solution.

Purchasing decisions and (employer) brand loyalty are increasingly made along these lines. The people are speaking with their wallets and what they’re saying is that they want genuinely sustainable practices.

CEOs, are you listening?

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CEOs: Getting Sustainability Communications Right