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Greenwashing: The Darker Side Of CSr

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  • Shri Ram College of Commerce (University of Delhi)

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Greenwashing is a practice followed by organisations in which unsubstantiated or misleading claims are made of the environmental and social attributes of a product, service or the company as a brand. Greenwashing practice is adopted to make the company look more environment-friendly than it actually is, by spending more money, time and efforts on marketing its products as ‘green’, rather than actually minimizing its adverse impact on the environment. This paper studies the green marketing practices of certain selected companies belonging to four sectors - Automobile, Electronics, Food & Beverages and Personal Care Sector, through analysis of their advertisements, company websites and sustainability reports. The main objective of the paper is to identify the extent of green washing done by the companies and to rate their environmental claims on the weighted scale of 1 to 5. Further, this paper correlates the greenwashing score with the overall CSR score, along with cross-sector analysis of their greenwashing scores. The paper finds that even the companies with a high overall CSR score are involved in some form of greenwashing practices. The authors also suggest ways and means for companies to avoid greenwashing, for consumers to spot it and for regulators to curb it.
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Commerce
Greenwashing: The Darker Side Of CSR
Priyanka Aggarwal Aarti Kadyan
Research Scholar, Department of Commerce, Delhi
School of Economics, University of Delhi
Assistant Professor, Shaheed Bhagat Singh College,
University of Delhi
Keywords
CSR, Environmental Sustainability, Greenwashing, Green Marketing, Sustainability
Reporting, Eco-labels and Certifications.
ABSTRACT Greenwashing is a practice followed by organisations in which unsubstantiated or misleading claims are made
of the environmental and social attributes of a product, service or the company as a brand. Greenwashing
practice is adopted to make the company look more environment-friendly than it actually is, by spending more money, time
and efforts on marketing its products as ‘green’, rather than actually minimizing its adverse impact on the environment.
This paper studies the green marketing practices of certain selected companies belonging to four sectors - Automobile,
Electronics, Food & Beverages and Personal Care Sector, through analysis of their advertisements, company websites and
sustainability reports. The main objective of the paper is to identify the extent of green washing done by the companies
and to rate their environmental claims on the weighted scale of 1 to 5. Further, this paper correlates the greenwashing score
with the overall CSR score, along with cross-sector analysis of their greenwashing scores. The paper finds that even the
companies with a high overall CSR score are involved in some form of greenwashing practices. The authors also suggest
ways and means for companies to avoid greenwashing, for consumers to spot it and for regulators to curb it.
INTRODUCTION
Environmental Sustainability is currently a burning issue
worldwide. It has become a major cause of concern for gov-
ernments, corporates and individuals. The rapid globalisa-
tion and industrialisation in the past few decades have sig-
nificantly contributed towards environmental degradation
in the form of pollution, greenhouse gas emissions, ozone
depletion, global warming etc. Brundtland (1987) defined
sustainable development as– “development that meets the
needs of the present generation without compromising the
ability of future generations to meet their own needs.” The
consumers, investors and other stakeholders are increasingly
becoming conscious about environment and society. They
keep environmental and social considerations in mind while
taking buying and investment decisions. Thus the compa-
nies are under a constant pressure to perform well on these
grounds and to think beyond profits.
Corporate social responsibility means that the organisations
should be accountable towards all the stakeholders includ-
ing consumers, investors, environment, employees, commu-
nity, government and public at large. They should align their
operations and decisions in accordance with the expecta-
tions of stakeholders (ISO 26000). There is a growing trend
among companies to adopt “go green” strategy in order
to gain an edge over their competitors. Therefore, the con-
cepts of green marketing and sustainability reporting have
become significant. According to Global Reporting Initiative
(2011) - “Sustainability reporting is the practice of measur-
ing, disclosing, and being accountable to internal and ex-
ternal stakeholders for organizational performance towards
the goal of sustainable development”. Green marketing is a
holistic marketing phenomenon used by an organisation to
promote the environment-friendly image of its products and
the organisation as a whole. It encompasses innovation and
modification in product development, manufacturing, pack-
aging and advertising.
Green marketing is used as a weapon by companies to com-
pete in the global market.In today’s age of sustainability it
is often said that “green is the new black”. The practice of
green marketing is being misused by companies in order to
build their false green brand image in the eyes of consumers
and investors. This is nothing but greenwashing. According
to Greenpeace (www.stopgreenwash.org) – “greenwashing is
the act of misleading consumers regarding the environmen-
tal practices of a company or the environmental benefits of a
product or service.”It involves use of deceptive and manipu-
lative sustainable claims by companies to portray a superfi-
cial eco-friendly image than it actually is, by investing more
resources on marketing its products as ‘green’ rather than
actually minimizing its adverse impact on the environment.
Delmas and Cuerel Burbano (2011) classified the drivers of
greenwashing into market, non-market, organisational and
individual drivers. These are shown in Figure 1 below.
Source: Delmas and Cuerel Burbano (2011)
Figure 1 – Drivers of Greenwashing
In this paper, we analyse the greenwashing practices of se-
lect popular companies. The following sections describe
greenwashing practices, regulations & certifications, review
of literature, objectives of study, hypotheses, research meth-
odology, results, recommendations, limitations and scope for
further research.
GREENWASHING PRACTICES
The environmental consciousness among the consumers and
companies has its origin in mid 1960’s which led to the adop-
tion of green marketing strategies by companies worldwide.
The environmental disasters such as Bhopal gas tragedy
(1984), Chernobyl nuclear power-plant disaster (1986), Exxon
Valdez oil spill (1989), etc. prompted the companies to prac-
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tice greenwashing in an attempt to improve their distorted
image. The term “Greenwashing” was coined in 1986 by
the environmental activist Jay Westerveld of United States.
According to a report by CBS News (2008), the eco-friendly
products in US have increased approximately 65 times from
2002-2007.The research conducted by American Marketing
Association (AMA) in 1991 concluded that 58% of environ-
ment-related advertisements possessed at least one mislead-
ing green claim. The Green Gap Survey of 2008 conducted
on over 1000 American adults by Cone LLC and The Bos-
ton College Center for Corporate Citizenship (2008) found
that 40% consumers prefer environment-friendly products
and 48% consumers believe that the products advertised as
green have positive impact on environment. Some notable
companies who have been found to be involved in green-
washing are as follows:
Royal Dutch Shell:
One of the most popular oil giants ‘Royal Dutch Shell’ has
been repeatedly accused and penalised for its greenwash-
ing campaigns. It’s most famous ad campaign -“Don’t throw
anything away- there is no away” emphasizing the claim of
growing flowers out of CO2 emissions but it was found to be
deceptive and heavily criticized.
General Motors:
General Motors has changed the colour of its logo from
blue to green in order to portray its green “gas-friendly to
gas-free” image. This is sheer greenwashing as only one
of its brands “Chevrolet Volt” is an electric eco-friendly
car, not its entire range. Moreover, GM is observed to be
among the top 10 most polluting car manufacturers in the
world.
Nestle:
Nestle’s Eco Shape bottle for its Pure Life Natural spring
water is also more of a marketing gimmick than reality. In
an attempt to be earth-friendly, it claims to have used 30%
less plastic without substantiating ‘less than what’. Also
some hidden trade-off is involved as manufacturing of the
plastic bottle in itself pollutes the environment. Further the
use of words like “Pure” and “natural” also raises doubt on
its authenticity.
REGULATIONS AND CERTIFICATIONS
There is lack of specific regulations in the area of green
marketing. Every country has its own marketing and adver-
tising laws which also govern environment related market-
ing. However the US based federal trade commission issues
environmental marketing guides (green guides) which were
first issued in 1992 and were last revised in October 2012.
These guides provide detailed guidance to the companies to
ensure that they make non-deceptive and authentic environ-
mental claims. The list of well known marketing regulations
and environmental certifications has been provided in Table
1 below.
Table 1 – Environmental Regulations and Certifications
S.No. Regulations/Certifi-
cations Country Scope/ Coverage
1Federal Trade
Commission USA
It provides voluntary
guidelines for envi-
ronmental market-
ing claims that give
the FTC the right to
prosecute false and
misleading advertise-
ment claims.
2
Lanham (Trademarks)
Act USA
It prohibits
trademark
infringement,trade-
mark dilution,
andfalse advertising.
3Competition and
Consumer Act, 2010 Aus-
tralia
It punishes the com-
panies that provide
misleading environ-
mental claims
4
Canada’sCom-
petition
Bureau&Canadian
Standards Associa-
tion
Canada
They discourage
companies from mak-
ing “vague claims”
towards their prod-
ucts’ environmental
impact
5Norwegian con-
sumer ombudsman Norway
It ensuresthat
marketing ofgood-
sandservicesis done
in accordance with
Norwegian market-
ing law.
6
The Business Protec-
tion from Misleading
Marketing Regula-
tions,2008
UK It prohibits mislead-
ing advertising.
7Food Safety and
Standards Authority
of India India
It lays down science
based standards for
articles of food and
regulating manufac-
turing, processing,
distribution, sale and
import of food so as
to ensure safe and
wholesome food for
human consumption.
8 EcoCert
Interna-
tional
certifi-
cation
based
in Eu-
rope
It certifies fair trade in
food, cosmetics and
textiles.
9 EnergyStar Program
U.S.
based,
used
world-
wide
It is a U.S. Environ-
mental Protection
Agency (EPA) vol-
untary program that
approves products
with superior energy
efficiency.
10 ISO 14001 Interna-
tional
It assesses effective
business environmen-
tal management.
11 USDA’s Organic Cer-
tification Standards USA
It certifies organic
food and organic
agricultural products.
12 Nordic Ecolabel
Nordic
coun-
tries
It evaluates product’s
impact on the envi-
ronment.
13 EU Ecolabel Europe
It is a labelling
system for foods &
consumer products.
LITERATURE REVIEW
A study analysing the authenticity of CSR communication was
conducted by Bazillier and Vauday (2013). The study used
3 sets of data – Vigeo’s CSR ratings, Hard (verifiable) infor-
mation and Soft (non-verifiable) information. Their study is
based on the model given by Dewatripont and Tirole (2005).
They suggested two forms of greenwashing: hard green-
washing and light greenwashing. Hard greenwashing refers
to environmental communication without CSR, while light
greenwashing occurs when the company reduces its CSR
efforts and focuses more on advertising green claims. The
study found a negative relationship between level of CSR of
a company and its green communication. Thus, higher the
investment done by companies towards CSR activities, lower
is the probability of greenwashing practised by it.
We expect a negative correlation between company’s CSR
ratings and extent of greenwashing. Thus, higher CSR rat-
ings usually indicate better CSR performance. A study in this
regard was conducted by Chatterji et al. (2007). They investi-
gated the reliability and effectiveness of commonly used KLD
social ratings in determining the environmental performance
of the company. The sample consists of 588 public US com-
panies and the test period is 1991-2003. The amount and
number of fines for violations of environmental laws and the
emissions level as per TRI report have been taken as proxies
for measuring environmental performance. They used firm
size as the control variable which was measured by log of
revenues and assets. The study found that the predictive abil-
ity of KLD ratings for environmental concerns is low but sig-
nificant. However, the predictive ability of KLD ratings for en-
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vironmental strengths is not significant. They also observed
that a company’s KLD ratings are highly associated with its
past environmental performance.
According to a research by Brennan and Binney (2008) mar-
keters prefer profits over environmental interests. Thus there
is a need for marketers to be environment-oriented and
think beyond profits. It is observed that whenever an envi-
ronmental disaster occurs, the firms intensify their CSR and
green marketing initiatives in order to enhance their public
image. Cherry and Sneirson (2011) executed a case study on
British Petroleum’s infamous oil spill and demonstrated that
the company was indulged into false advertising and securi-
ties fraud as it could not provide sufficient evidence for its
so called environmental and social claims. They further sug-
gested that change must be genuine and verifiable.
There is a growing trend among companies to use eco la-
bels and certifications to promote their contribution towards
saving the planet but a study by Parguel and Benoit-Moreau
(2013) suggested that such labels and certification (even if
given by experts) cannot mitigate greenwashing and it can
assist only expert consumers to form their perception about
a particular brand. According to Ramus and Montiel (2005)
- the environmental plans and programmes among various
industries do not vary significantly; however, their implemen-
tation does vary.
Lyon and Maxwell (2011) designed a framework to ensure
that the firms should disclose a complete picture of their
environmental performance which includes both positive as
well as negative contributions to the ecology. The environ-
mental audit should be regularly conducted and the default-
ers should be penalised to deter greenwashing. The absence
of negative environmental disclosure would hamper the trust
of the consumers and investors which is not beneficial for the
long term interest of the company.
Terrachoice, a North American environmental marketing con-
sultancy classified seven sins of greenwashing in its green-
washing report of 2009. These sins are as follows:
Sin of hidden trade-off – committed when the marketer de-
picts only a limited range of qualities to divert the attention
of consumers from other significantly negative environmental
impacts.
Sin of no proof – committed when the marketer makes
claims which cannot be verified through conveniently avail-
able information.
Sin of vagueness - committed by the marketer when he uses
broad misleading words like “pure”, “natural”, “organic”,
“eco-friendly” etc
Sin of irrelevance - committed when the marketer makes a
green claim which is either insignificant or made under regu-
latory pressure.
Sin of lesser of two evils - committed by the marketer when
he makes a true claim in a particular group but has an overall
hazardous impact on the environment.
Sin of fibbing - committed by the marketer make untrue
green claim.
Sin of worshipping false labels - committed by the marketer
when he demonstrates the environment friendliness of the
product through fake labels and certificates (TerraChoice En-
vironmental Marketing, 2009).
The relationship between greenwashing (i.e. Sustainabil-
ity messaging) and Corporate Socio-environmental perfor-
mance (i.e. Sustainability initiatives) can be well illustrated
through Figure 2 shown below.
Source: Chan and Sukhdev (2012)
Figure 2 – Relationship between Sustainability Perfor-
mance and Greenwashing
On the whole, the review of literature suggests that there is
some sort of disconnect between the CSR performance of
the company and its communication which is largely taking
the form of greenwashing. Thus, there is a need to empirical-
ly analyze the association between CSR and greenwashing.
OBJECTIVES OF THE STUDY
This paper aims at achieving the following objectives:
1) To determine the extent of greenwashing practised by
large companies with the help of rating scale.
2) To correlate the greenwashing score so obtained with
overall CSR score of the companies of all four sectors
taken together and also to find out sector-wise correla-
tion.
3) To analyse whether the mean greenwashing score signifi-
cantly varies between automobile and electronic sector;
food & beverages and personal care sector.
STATEMENT OF HYPOTHESES
This paper intends to examine the following seven hy-
potheses which have been stated below in their alternate
form:
Ha1: There is a significant correlation between greenwashing
score and overall CSR score of companies.
Ha2: There is a significant correlation between greenwash-
ing score and overall CSR score of companies in Automobile
Sector.
Ha3: There is a significant correlation between greenwash-
ing score and overall CSR score of companies in Electronics
Sector.
Ha4: There is a significant correlation between greenwashing
score and overall CSR score of companies in Personal Care
Sector.
Ha5: There is a significant correlation between greenwashing
score and overall CSR score of companies in Food & Bever-
ages Sector.
Ha6: There is a significant difference between the mean
greenwashing scores of companies in automobile sector (µA)
and electronics sector (µE), i.e. (µA - µE ≠ 0)
Ha7: There is a significant difference between the mean
greenwashing scores of companies in food & beverages sec-
tor (µF) and personal care sector (µP), i.e. (µF - µP ≠ 0)
RESEARCH METHODOLOGY
The paper applies statistical techniques like t-test, Pearson’s
correlation analysis and descriptive statistics with the help of
MS Excel. The following sub-sections describe our sample,
variables and data sources.
7.1 Sample Description
The sample consists of 40 global companies with 10 com-
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panies each from four sectors- automobile, electronics, per-
sonal care and food & beverages. These sample companies
are shown in Table 2 below.
Table 2 – Sample Description
S.No.
Sector
Company Name
1 Automobile
Nissan Motor Co. Ltd
General Motors
Volkswagen AG
Mitsubishi Motor Corp
Toyota Motor Corp
Mazda Motor Corp
Ford Motor Corp
BMW
Honda Motor Co. Ltd
Fiat Auto
2 Electronics
Philips
Electrolux AB
Videocon Industries Ltd
Samsung Electronics Co. Ltd.
Panasonic Corporation
Dell, Inc
Sharp Corporation
LG Electronics Inc.
Hewlett-Packard Co. (HP)
Sony Corporation
3Food & Bever-
ages
Coca Cola Company
Kellogg Company
General Mills
PepsiCo
Unilever PLC
Tata Global Beverages
H.J. Heinz Company
Whole Foods Markets
Starbucks Corporation
McDonald’s Corporation
4 Personal Care
Oriame Cosmetics SA
Lóreal
Henkel KGAA
Dabur India Ltd
Revlon, Inc
Johnson & Johnson
Beiersdorf
Unilever PLC
Proctor & Gamble Company
Kimberly-Clark Corporation
7.2 Variable Description
The study uses secondary data and involves two key vari-
ables- Greenwashing score and overall CSR score. The CSR
score has been extracted from CSRHub which furnishes
Corporate Social Responsibility and sustainability ratings of
companies from over 100 countries. The greenwashing score
has been assessed on the basis of a 5-point scale based on
following five criteria as shown in Table 3 below:
Table 3 – Greenwashing Scale
Criteria
Description with examples
No Proof/No supporting
evidence
BP’s Beyond Petroleum
campaign
5
Use of vague/ broad
words or images or
visuals
“all natural”, “reduced
emissions”, “eco-friendly”,
“organic”e.g. 7UP’s 100%
natural drink
4
False eco labels and
certifications
LG’s false claim of energy
star certification
3
Hidden Trade off
Hybrid cars e.g. Toyota
Prius
2
Irrelevant claims (man-
dated by law/ legislative
pressure)
CFC free claim which is
already banned by law. 1
The greenwashing scores have been determined by analysing
the green claims made by companies through advertisements,
their websites and CSR/Sustainability reports. A score of 1 to 5
has been assigned to each criterion where 1 means No Green-
washing and 5 means Total Greenwashing. A weighted average
score for each company is then calculated. The score so calcu-
lated is then converted into percentage form. According to our
scale, any company with a weighted average score of 3 or more
(i.e. 60% or more) is practising greenwashing in some way.
DESCRIPTIVE STATISTICS
The descriptive statistics that comprises of mean, median,
mode, standard deviation, minimum and maximum values for
Automobile, Electronics, Personal Care and Food & Beverages
sectors are shown below in Tables 4, 5, 6 and 7 respectively.
Table 4 - Descriptive Statistics of Automobile Sector
Particulars CSR Score Greenwashing Score
Mean 57.1 54.4
Median 57.5 60
Mode 57 22
Standard Deviation 4.46 20.57
Minimum 48 22
Maximum 63 86
Observations 10 10
Table 5 - Descriptive Statistics of Electronics Sector
Particulars CSR Score Greenwashing Score
Mean 60 52.156
Median 62.5 55.445
Mode 63 70.67
Standard Deviation 5.228129 20.16438
Minimum 49 25.33
Maximum 65 81.33
Observations 10 10
Table 6 - Descriptive Statistics of Personal Care Sector
Particulars CSR Score Greenwashing Score
Mean 62.1 62.801
Median 63 69.335
Mode 63 66.67
Standard Deviation 3.665151 20.58324
Minimum 54 20
Maximum 67 80
Observations 10 10
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Table 7 - Descriptive Statistics of Food & Beverages Sector
Particulars CSR Score Greenwashing Score
Mean 60 53.5
Median 62.5 50.665
Mode 63 48
Standard Deviation 5.228129 13.41913
Minimum 49 32
Maximum 65 74
Observations 10 10
RESULTS OF HYPOTHESIS TESTING
The results of hypothesis testing have been summarized be-
low in Tables 8 and 9.
Table 8 - Results of Correlation analysis between Green-
washing Score and CSR Score
Hypothesis Particulars Pearson’s
Correlation
Coefficient p-value
Ha1 Overall (across four sectors) 0.009 0.954
Ha2 Automobile Sector 0.215 0.547
Ha3 Electronics Sector -0.337 0.342
Ha4 Personal Care Sector -0.100 0.783
Ha5 Food & Beverages Sector 0.089 0.805
Table 9 - Results of t-test
Particulars Automobile and
Electronics Sectors Personal Care and Food
& Beverages Sectors
p-value 0.808 0.247
Hypothesis Ha6 Ha7
From Table 8, we observe that there is negligible and insig-
nificant correlation between greenwashing and CSR scores
when the companies across all four sectors are taken togeth-
er. But further sector-wise correlation analysis suggests that
there is positive association in the Automobile and Food &
Beverages sectors to the extent of 21.5% and 8.9% respec-
tively, while there is negative association in the Personal Care
and Electronics sector to the extent of 33.7% and 10% re-
spectively. Moreover all the p-values are greater than 0.05,
thus first five alternate hypotheses are rejected.
From Table 9, we observe that both the p-values are greater
than 0.05 and thus there is no significant difference between
the mean greenwashing scores of the above mentioned sec-
tors. Thus we reject alternate hypothesis Ha6 and Ha7.
CONCLUSION
An organisation’s success depends on how ethically integrat-
ed is its organisational structure. An ethical firm is able to
build trust and loyalty among its stakeholders. But instead of
focussing on long term sustainability, the firms choose profits
over ethics. Thus even largest of firms indulge in an unethical
practice like greenwashing. Among the four sectors that we
analysed, we observed wide variations in the extent of green-
washing practised by companies. In the automobile sector,
the median greenwashing score is 60% which indicates that
half of the sample companies in this sector greenwash their
claims. The best performer with least greenwashing score is
Nissan with its electric car Nissan Leaf and the worst perform-
er is Mazda which has made false non-verifiable claims about
its products. Moving to Electronics sector, life is not so good
with LG being the highest on greenwashing scale as it mis-
certified the Energy Star efficiency ratings on its refrigerators.
Philips with its wide range of eco-friendly “green products”
is the best green company in this sector. Further in Personal
Care sector we observe that Oriflame makes authentic green
claims about its range of “eco beauty products” while Lóreal
exaggerates about being natural. In the Food & Beverages
sector, the well-known breakfast cereal company Kellogg is
observed to be the leading the greenwashing scale with false
& misleading claims about its Kashi Organic products. Heinz
is the best performer in this sector with its various green ini-
tiatives like 100% natural tomato ketchup with no artificial
preservatives and plant bottle packaging.
The analysis of descriptive statistics yields some interesting
results. The average greenwashing score is found to be high-
est in the Personal Care sector (62%) and lowest in the Elec-
tronics sector (52%). Ironically the companies with the highest
and lowest greenwashing scores both belong to Automobile
sector. It is evident from the results of correlation analysis
that on the whole there is no relationship between green-
washing score and CSR score of companies under study. The
sector-wise analysis present a clearer picture with Automobile
and Food & Beverages sectors having positive relationship,
while Electronics and Personal Care sectors having negative
relationship. However, none of the correlation coefficients is
found to be significant @ 5% level of significance. Further,
we observed that there is no significant difference between
greenwashing scores of any two sectors. Thus, we conclude
that some relationship does exist between greenwashing and
CSR but further empirical analysis is required to be done in
this context to arrive at more cohesive and conclusive results.
RECOMMENDATIONS
The issue of greenwashing has not been adequately ad-
dressed by the existing regulatory framework. There are no
specific globally applicable standards for preventing and
curbing greenwashing practices. In the absence of any such
regulations, the practice of greenwashing is growing expo-
nentially and this trend if continued will gradually undermine
the trust of consumers and cause them to become distrustful
and suspicious about any green advertisement broadcasted
by companies. The industry today is in an urgent need of ex-
tensive guidelines on environmental communications.
We provide here some recommendations for the consumers,
marketers, companies and regulatory bodies to deal with this
menace of greenwashing.
For Consumers:
• Watch out for words like pure, natural, earth-friendly,
eco-friendly, organic, green, reduced emissions, sustain-
able development, carbon neutral, plant based, etc. as
they may be deceptive.
• Lookforsupportingevidenceonthecorporatewebsites
and sustainability reports in order to verify the green
claims.
• Itisgoodtolookforeco-labelsandthirdpartycertica-
tions but it’s also important to check their authenticity
and reliability.
• To getmoreinformation about the company’senviron-
mental performance, go for Google search.
• Life-cycleassessment(LCA)oftheproducthelpsiniden-
tifying true green product.
For Companies/Marketers:
• Be transparentand ethical, as it does pay in the long
term.
• Communicate right in the right way, i.e. communicate
only significant and material environmental achieve-
ments in a clear & understandable manner.
• Behonestandfairtoyourstakeholders.
• Disclose not just your positive environmental impacts,
but also the negative ones.
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• Beforeclaimingtobegreen,thermsshouldgoforLife-
cycle assessment and analyse the environmental impacts
of all their products over entire life-cycle.
• Back-upallyourclaimswithrelevantdataandtrueeco-
labels and certifications.
• Goforindependentvericationof environmentalclaims
from credible third party.
For Regulatory and Enforcement Bodies:
• The Public-Private Partnership (PPP) model can be adopt-
ed in which government and private bodies jointly frame
comprehensive and stringent standards and regulations
to curb greenwashing.
• Issue specific and uniform guidelines to discourage de-
ceptive environmental marketing.
• Ensure strict enforcement and compliance of regulations.
• Penalizethedefaultersandimposebanonviolatorsfora
certain period of time.
• The environment protection and consumer protection
bodies should increase awareness about greenwashing
among consumers, companies and marketers.
LIMITATIONS AND SCOPE FOR FURTHER RESEARCH
As no study is free from limitations, our study also has certain
limitations. The sample size is small and the industry cover-
age is narrow. Also a limited number of advertisements have
been analysed to calculate the greenwashing score, thus
subjectivity is involved. The CSR ratings have been extracted
from an external source which may have its own inherent limi-
tations. The holistic environmental performance of the com-
panies and other related variables have not been taken into
consideration. All these limitations may have affected our
analysis and may have led to insignificant results. The future
researchers should endeavour to address these issues while
doing research in this area. Further research can be conduct-
ed on the relationship between firm’s actual environmental
performance and environmental communication in global as
well as Indian context.
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The Power of 'Executional Greenwashing': Evidence from the Automotive Sector
  • M A Delmas
  • V Burbano
  • M Dewatripont
  • J Tirole
  • T P Lyon
  • J W Maxwell
Green Gap Survey Fact Sheet. Cone LLC. Retrieved from http://www.conecomm.com/stuff/contentmgr/files/0/57bfa0d65ae70c7e1122a05a9d0d67e0/files/2008_green_gap_survey_fact_ sheet.pdf | Delmas, M. A., & Cuerel Burbano, V. (2011). The Drivers of Greenwashing. California Management Review. | Dewatripont, M., & Tirole, J. (2005). Modes of communication. Journal of Political Economy, 113(6), 1217-1238. | Global Reporting Initiative. (2011). G3.1 Sustainability Reporting Guidelines. Global Reporting Initiative. | | Lyon, T. P., & Maxwell, J. W. (2011). Greenwash: Corporate Environmental Disclosure Under Threat of Audit. Journal of Economics & Management Strategy, 20 (1), 3-41. | | Parguel, B., & Benoit-Moreau, F. (2013). The Power of 'Executional Greenwashing': Evidence from the Automotive Sector. Retrieved from http://www. cerog.org/lalondeCB/CB/2013_lalonde_seminar/program/papers/parg.pdf | | Ramus, C. A., & Montiel, I. (2005). When are corporate environmental policies a form of greenwashing?. Business & Society, 44(4), 377-414. | | TerraChoice Environmental Marketing. (2009). The Seven Sins of Greenwashing: Environmental Claims in Consumer Markets. London: TerraChoice Group Inc. Retrieved fromhttp://www.sinsofgreenwashing.org/index3c24.pdf |