Misleading the world through “greenwashing”

  • 21st November, 2022

(MainsGS3: Conservation, environmental pollution and degradation, environmental impact assessment.)


  • At the COP27 conference, Secretary-General of the United Nations (U.N.), António Guterres said, “We must have zero tolerance for net-zero greenwashing.”

About Greenwashing:

  • Greenwashing refers to misleading the general public into believing that companies, sovereigns or civic administrators are doing more for the environment than they actually are. 
  • This may involve making a product or policy seem more environmentally friendly or less damaging than it is in reality.
  • The phenomenon came into practice as consumers and regulators, owing to greater awareness and environmental consciousness, increasingly sought to explore planet-friendly, recyclable and sustainable ‘green’ products.

Process involved:

  • Although several companies, cities, states and regions have committed to reaching net-zero, in the absence of regulation, a lot of these pledges are not aligned with the science to achieve the same and do not have enough detail to be credible, the report notes.
  • Additionally, the inconsistent use of terms ‘net-zero’, ‘net-zero aligned’, ‘eco-friendly’, ‘green’ and ‘ecological’ among others are not accompanied with satisfactory evidence to substantiate their claims. 
  • Example: In April, the U.S. Federal Trade Commission penalized retailers and Walmart $5.5 million for misleading customers about their home furnishing products being made of bamboo. 
  • In reality, they were made of rayon — a fiber made from cellulose whose manufacturing entails the use of harmful chemicals such as sodium hydroxide that are hazardous to the environment.  

Why greenwashing:

  • It is done primarily for a company to either present itself as an ‘environment-friendly’ entity or for profit maximisation.  
  • The latter could be achieved by either introducing a product, catering to the inherent demand for environment-friendly products, or, in certain instances, using the larger idea as a premise to cut down on certain operational logistics and providing consumer essentials
  • If greenwash premised upon low-quality net zero pledges is not addressed, it will undermine the efforts of genuine leaders, creating both confusion, cynicism and a failure to deliver urgent climate action.

Combat ‘greenwashing’:

  • If the financial sector is to respond effectively to the demand for products that endeavor to introduce positive changes into the economy, it is imperative that ‘greenwashing’ is averted, and that customers are accorded the right information and standards.  
  • Institute norms for continuous enhancement of disclosures specific to ESG Schemes of Mutual Funds, with a particular focus on mitigating risks pertaining to mis-selling and ‘greenwashing’. 
  • Financial institutions immediately discontinue all lending, underwriting and investments in companies wanting to strengthen or expand their coal-related infrastructure such as power plants and mines.
  • Companies must work towards reducing emissions across their entire value chain and not limit the endeavour to only one part of the chain. 
  • The companies must not invest, through any means, in harnessing fossil fuels or engage in deforestation and other environmentally destructive activities.  

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