Understand what greenwashing is, the green blah blah blah without concrete actions

A company that tries to show that it does more for the environment than it actually does. In Portuguese, this habit could be described as a deception, farce or simply a lie. However, the corporate vocabulary —thirsty for expressions in English— prefers another word: greenwashing.

Literally, the expression means “green wash”, but it is often used in the sense of sustainable misleading advertising, which applies to companies, governments and even weather events.

The term marked COP26, and one of those responsible was the Swedish activist Greta Thunberg, who criticized the meeting on her social networks.

“This is no longer a climate conference. This is a Global North ‘greenwashing’ festival. A two-week celebration of business as usual and blah blah blah,” he wrote on Twitter.

Just as Greta denounced the conference held in Glasgow (Scotland), some see the current ESG (environmental, social and governance) wave as the corporate world’s gibberish.

Companies have been making efforts to show their green flags, but, according to experts, many have only been greenwashing.

“Companies want to demonstrate that they’re doing something so badly that they often end up leaving their hands and feet,” says Angela Donaggio, founder of Virtuous Company and a consultant in ESG, governance, ethics and diversity.

According to her, one of the main mistakes made by the corporate world is to publicize sustainable initiatives that are yet to be put into practice, instead of showing what is already being done.

“It is important to remember that ESG is not a product that the company buys, it is not an indicator in which it participates. The real ESG is a change in the mindset of the main leaders”, he says.

For Nelmara Arbex, ESG leader at consultancy KPMG, greenwashing occurs when a company communicates positive action without providing evidence.

According to her, it is not always intentional. In some cases, the company may even have an interesting project, with goals, indicators and a detailed plan, but fails to make this clear.

“What we see today in the rush of the digital world is that greenwashing ends up happening due to poor communication management. Communication comes out faster than the project”, he says.

Arbex cites the example of companies that say they have zeroed their greenhouse gas emissions.

“Zero emission can only be at the factory, it can be at the factory and in the transport of employees, it can include the supply chain… So this sentence [tenho emissões zero] no longer brings all the information.”

The specialist also highlights that the impact of greenwashing is not restricted to the responsible company. In addition to destroying the company’s own reputation, the practice diminishes people’s trust in green initiatives.

“Sometimes even those who actually do it will be punished. It’s in the same bag as those who don’t do it or who can’t show evidence,” he says.

Providing evidence is what Rodrigo Viñau, Mazars’ lead consulting partner, considers critical to not embarking on greenwashing.

In his view, it is necessary to demonstrate, through examples or external validations, all the good practices that an organization claims to have. It is also important to encourage the involvement of ESG professionals in discussions about advertising campaigns to ensure that there is no distortion.

Viñau says the business world is undergoing a major transformation, and companies want to demonstrate that they adopt ESG practices.

“In this phase, where the market is moving from an old model to a new one, there are situations that are greenwashing, but there are others that are the result of a transition that the company is going through and, sometimes, is not yet complete”, he says.

However, the consultant says that many companies are, in fact, going down the path of “green makeup” to try to ride the wave of choice.

He cites the example of the consumer goods sector, where there are businesses that bet on the narrative to reach consumers linked to the sustainable agenda, especially young people from Generation Z.

For Viñau, not embarking on greenwashing is a matter of consistency. “The company needs to have a socio-environmental structure and a concern with real investments before going to the market to try to demonstrate these attributes”, he says.

The coherence of the corporate world in the ESG agenda is also often questioned when companies with sustainable discourses get involved in environmental tragedies or episodes of racism.

Mauricio Colombari, a partner at PwC Brasil, says that cases like these can be considered greenwashing or socialwashing (referring to social initiatives).

However, he emphasizes that care must be taken to differentiate a flaw in the process from an isolated case, and cites the example of a company involved in a racist act.

“We have to look at what was done in internal terms, in terms of awareness, training and preparation to get to that episode”, he says. “As soon as a company does not have a policy, with procedures and controls, but says it is anti-racist, then you really have a problem,” he adds.

According to him, although there are crass cases of greenwashing, the theme is involved in a lot of subjectivity. These range from the most serious types —deliberately lying— to milder situations, when a company gives disproportionate weight to initiatives that are of little relevance to the environment.

Colombari also emphasizes the importance of being transparent and giving visibility not only to sustainable goals, but also to the action plan and partial results.

“From the moment when ESG issues are at the center of the decision-making process, that is, when the company is discussing these issues at the highest level of governance, the possibility of having greenwashing decreases considerably”, he argues.