Greenwashing in marketing poses a major challenge to addressing climate change. This problem is becoming more prominent as the world becomes more aware of the urgency of our climate crisis. Promises of environmental stewardship from companies or organisations can mislead the public into believing they are doing more to protect the environment than they are. Greenwashing enables entities to exploit consumers’ desire for eco-friendly products and services. It is a problem that requires immediate attention if we wish to slow the Earth’s rapidly accelerating global temperatures.

What Is Greenwashing?

People around the world are becoming increasingly concerned about environmental issues. Stemming from this, there has been a notable shift in consumer behaviour toward sustainable products and mindful purchasing. As a result of this, companies are increasingly utilising green marketing, and reaping the benefits. However, this surge in environmental consciousness has also led to the rise of greenwashing. Greenwashing not only misleads consumers but also undermines genuine efforts to combat climate change. Greenwashing in marketing is not exclusive to one industry. It occurs across many sectors from fashion and food to energy, and beyond.

Greenwashing presents itself in many shapes and forms – some more obvious than others:

• Being intentionally vague about the operations and processes of a company.
• Setting ambitious environmental goals and claiming to be on track when no credible action plan exists.
• Placing emphasis on one environmental attribute to distract from other damaging impacts.
• Applying purposely misleading ecolabels to products that are vague or lack standard definitions.

Examples of Greenwashing in marketing

Greenwashing in marketing is not a new phenomenon, however, it is very prominent now. This deceptive practice can manifest in a variety of ways across industries. Greenwashing often leaves consumers confused and misinformed about the true environmental impact of their purchases.

Volkswagen

The Volkswagen emission cheating scandal is a classic example of greenwashing in marketing. In the 1970s it was found that some of Volkswagen’s vehicles had been equipped with “defeat” devices. These devices were designed to give false readings in emission tests. Each of these devices were capable of detecting when the car was being tested, and then changing the car’s performance accordingly to improve results.

In 1973, the US Environmental Protection Agency (EPA) accused Volkswagen of equipping automobiles for the following year, their 1974 models, with defeat devices. Volkswagen subsequently admitted to selling 1973 models that included these devices—temperature-sensitive switches that disabled pollution controls at lower temperatures. The EPA estimated that Volkswagen had sold 25,000 vehicles featuring this cheating technology. The US government sued the company for violating the Clean Air Act. Volkswagen ultimately settled the case by paying a $120,000 fine, though it did not admit to any wrongdoing.

Nestlé

Nestlé, the world’s biggest food and beverage company, has a long history of ethically concerning controversies. So, it might come as no surprise to some that Nestlé has also been involved in greenwashing scandals. In 2018 Nestlé released a statement claiming that it was planning to reach 100% recyclable or reusable packaging by 2025. Environmental groups such as Greenpeace called out these “ambitions” as nothing more than greenwashing as Nestlé had not established clear targets, a timeline to support its goals, or additional measures to encourage consumer recycling.

In the Break Free From Plastic’s 2023 annual report, it was revealed that Nestlé, alongside Coca-Cola and PepsiCo, had retained its position as one of the top three plastic polluters in the world. Nestlé has continued to rank as one of the world’s top three plastic polluters every year since 2018 (with the exception of 2021 where Nestlé ranked fourth).

The Fossil Fuel Industry

Giant fossil fuel corporations around the world have become experts at incorporating greenwashing into their marketing techniques. This is especially true in Australia where fossil fuel companies utilise eco-friendly phrases such as ‘carbon neutral’ and ‘net zero’ in their marketing in an attempt to convince us that they are serious about tackling climate change.

Burning coal and gas directly accelerates global warming. To further prevent catastrophic harm from climate change, we urgently need to start reducing our reliance on fossil fuels. For multi-national fossil fuel corporations, this is bad news. A shift from reliance on fossil fuels means a significant reduction in their annual profits. It is thus no surprise that these corporations frequently utilise greenwashing to intentionally delay the shift away from their harmful products and practices.

Slick advertising, ambiguous language in corporate reports, and fossil fuel logos plastered on our national sports teams—these marketing tactics are carefully crafted to distract from the fact that fossil fuel corporations are driving the climate crisis.

How Does Greenwashing In Marketing Negatively Influence Climate Change?

Greenwashing is not just an issue of misleading consumers, the practice actively undermines efforts to combat climate change. By allowing companies to appear environmentally responsible without making real changes, greenwashing diverts attention and resources away from meaningful solutions, perpetuating environmental harm on multiple fronts.

Misdirection from Genuine Sustainability Efforts

One of the most damaging effects of greenwashing is that it shifts focus from authentic sustainability initiatives. Companies that invest in greenwashing rather than actual environmental improvements misallocate resources that could help reduce emissions or develop more sustainable practices. For example, a business might spend more on marketing a product as “eco-friendly” than on redesigning its supply chain to lower its carbon footprint. This not only stalls progress but also creates a false sense of achievement in combating climate change. This misdirection undermines Values-Based Innovations, one of THRIVE’s 12 Foundational Focus Factors (FFFs). Values-Based Innovations emphasise aligning business strategies with ethical standards and shared values to encourage true sustainability.

Prolonging Reliance on Harmful Practices

Greenwashing often enables industries to continue unsustainable practices under the guise of being environmentally conscious. Fossil fuel companies, for instance, frequently highlight small renewable energy projects while their core operations remain heavily reliant on oil, coal, and gas. This creates a smokescreen that delays the transition to cleaner energy systems. Similarly, companies in the fashion industry may boast about minimal environmental efforts while simultaneously contributing to resource depletion, deforestation, and greenhouse gas emissions.

Undermining Consumer Trust and Engagement

When consumers discover that brands they trust are guilty of greenwashing, it can erode their faith in sustainability initiatives altogether. This disillusionment can lead to scepticism about the environmental claims of even genuinely responsible companies, reducing consumer participation in climate-positive behaviours. As a result, efforts to promote sustainable consumption and lifestyles face additional barriers.

The Issue of Combating Greenwashing in Marketing

The rise of greenwashing in marketing highlights significant regulatory challenges to ensure transparency and accountability in corporate environmental claims. The state of greenwashing that continues to occur in the current day highlights that existing measures continue to fall short of effectively addressing the issue, allowing companies to continue misleading consumers and undermining climate action. Contributing to this is many countries lack of stringent laws regarding environmental claims in advertising and marketing. Where regulation does exist, it is often vague or inconsistently enforced. Another issue is that consumers often lack the tools or knowledge to identify greenwashing, leaving them vulnerable to false claims. Even when greenwashing is identified, the consequences for companies are often minimal. This lack of accountability undermines consumer trust and reduces the pressure on companies to adopt genuine sustainable practices.

Despite these challenges, recent success stories have shown regulators holding companies accountable for their greenwashing practices. In 2024, the Australian Securities & Investments Commission (ASIC) conducted its first greenwashing case. The ASIC ordered Mercer Superannuation Ltd to pay a fine of $11.3 million after the company admitted to making misleading claims about the sustainability of certain investment options. Elsewhere in the world, authorities are taking large corporations to court over their alleged greenwashing practices. For example, Italian oil firm Eni, face a lawsuit alleging early knowledge of the climate crisis

Moving Forward

As we confront the widespread issue of greenwashing in marketing, it’s essential to take a systemic and holistic approach. The THRIVE Framework provides a powerful model for businesses and individuals alike to lead with integrity and vision. By prioritising Values-Based Innovation, companies can align their actions with the ethical values of thrivability and environmental justice. This will ensure that their marketing reflects their true environmental efforts. This focus can help dismantle the superficial claims of greenwashing, pushing businesses to invest in real solutions rather than misleading advertising. Additionally, embracing other FFFs, such as Systems Thinking, encourages companies to recognise the interconnectedness of their actions and how even small changes in one area can create ripple effects that improve the broader environment.

Tackling the ethical and regulatory challenges of greenwashing will require collective action. Policymakers must establish stricter laws and businesses must commit to genuine sustainability. As consumers, we must hold businesses accountable for their promises by demanding transparency, questioning their practices, and supporting organisations that demonstrate genuine commitment to climate action. Together, we can work towards a future where marketing is a force for good, driving meaningful change in the fight against climate change.

A Thrivable Future

Around the globe, we are starting to see the disastrous effects of climate change, from devastating wildfires to extensive flooding and drought events. It is clear that urgent action on greenwashing in marketing is required immediately. THRIVE Project considers issues such as these of utmost importance in our mission to build a future where humanity doesn’t just survive but also truly thrives. Focusing on the “thrivability” of all species on Earth, THRIVE explores solutions that go beyond sustainability. Through the THRIVE Framework, we address key challenges and identify opportunities for meaningful change, offering insights that promote both environmental and social sustainability without compromise.

To learn more about the concept of thrivability, visit our website, where you’ll find a range of resources, including blog posts, whitepapers, and free monthly webinars. Stay up to date with the latest from THRIVE Project by following us on LinkedIn, and remember to keep on thriving!