‘Greenwashing’, is the current environmental buzzword, but what does the term mean, and what does its opposite term ‘brownwashing’ refer to?
Greenwashing vs Brownwashing
As we outlined in a previous blog, greenwashing is the action of a company or business to portray themselves or their products as being ‘green’ or ‘environmentally friendly’ when in fact this is not necessarily the case, and such information is potentially misleading. Investopedia, define it as follows:
“Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company's products are environmentally friendly.”[i]
To greenwash, a company may for example, claim that their products are from recycled materials or have energy-saving benefits, and whilst this may be true in part, those greenwashing typically exaggerate claims to mislead consumers. It may also be that a company replaces an older product perceived as environmentally damaging, with a newer design that on the surface seems eco-friendly, yet the production or lifecycle of that new product may in fact be more harmful in the long term.
Contrastingly, the lesser addressed ‘Brownwashing’ (for the purposes of this blog we refer purely to the environmental context for the term) relates to companies or organisations downplaying their environmental credentials. As a result, consumers and other rival businesses may be unaware of how successful a company has been in addressing environmental issues. Whilst the term has lost exposure in recent years, it is still very much an ongoing practice. Tortoise Media’s Sustainability 100 Index analysis highlights this to an extent. The report provides “A ranking of the FTSE 100 companies on their commitment to key social, environmental and ethical objectives, inspired by the UN Sustainable Development Goals”[ii] The researcher identified the sustainability credentials of all FTSE 100 businesses, scoring them on how well they ‘talk the talk’ (indicating the level of commitment to measurable and time-bound targets and memberships to certain organisations[iii]) and ‘walk the walk’ (the actions and changes businesses are making[iv]).
The ‘Top 20’ from Tortoise Media’s Sustainability 100 Index
Source: Tortoise Media
Surprisingly there were a number of companies who scored highly in the ranking (which is based on the ‘walk’ score) yet were ranked far lower for ‘talk’; namely ITV Plc, Barclays, 3i, Hargreaves Lansdown, and Taylor Wimpey. The fact that such disparity exists even with the reporting and actions of leading listed companies, shows that this is a major underlying issue throughout business sectors.
Why do Companies Brownwash?
There are several reasons why companies Brownwash. Firstly, with the pressures and backlash around Greenwashing, businesses may feel they are at risk from overstating their credentials or are uncertain as to how their business ranks amongst their peers, thus they either downplay their achievements, or fail to draw these out entirely, thus missing the opportunity to highlight their progress. Additionally, companies are driven by internal and external stakeholders; it may be felt that other features and areas of the business are in line for praise and promotion in reporting, thus leading to sustainability and environmental achievements being overlooked.
Likewise, when reporting to shareholders, sustainability may fall down a company’s list of priorities (rightly or wrongly so, given the exposure and importance of environmental issues at present). Further to the above, there is thought that Brownwashing could be a form of corporate ‘imposter syndrome’. Given some industries have a negative history relating to environmental impacts and practices, companies operating within them today may feel they are unworthy or out of turn to speak out on their environmental achievements. Likewise, younger companies or those unsure of how their environmental successes actually rate, will be far less sure in promoting their achievements.
The pressure we see today from environmental groups, consumers, and social media commentators, means that a business actively promoting its sustainability credentials is playing a much higher stakes game than in the past, and backlash can be incredibly damaging. However, companies should also consider the alternative- failure to show transparency around green credentials could in fact see accusations by pressure groups and consumers that a company is not actively addressing environmental concerns, thus leading to unfair reputational damage.
Ultimately, businesses should be bold and look at how they are positioned within not only their industry, but also the global sphere. In doing so, some of the tension between profitability and sustainability can be addressed when the bigger picture is considered. From this a long-term perspective should be taken, allowing companies to make decisions that ensure the continuing viability and profitability of the business, whilst addressing the issues and concerns around sustainability. This process must remain transparent and accessible, with clear reporting around objectives and goals, to display the progress and willingness by the business to facilitate real change; as well as stand up to any levied scrutiny.