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GREENWASHING: A Study on the Effects of Greenwashing on Consumer Perception and Trust Build-Up

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The growing prominence of green advertising has led to an increased confusion in the minds of the consumers about the green claims used in numerous advertisements. The purpose of the study is to identify the sectors where greenwashing is most rampant from the consumer's perspective and to analyze the consumer's perception of greenwashing tactics, identify the reasons for greenwashing by brands from the consumer's perspective. The convenience sampling was used for data collection. A sample size of 150 was chosen for the study. The respondents comprised of individuals across different age group and professions in Delhi NCR. Research findings showed that the most rampant sectors where greenwashing is prevalent are ‗Automobile', ‗Industrial Manufacturing' and ‗Beauty products/cosmetics (65.7%). Consumers perceive usage of ‗fluffy language' such as the use of words like ‗eco-friendly', ‗natural' as the most frequently used greenwashing communication tactic. A lack of proper regulatory system and compliance by the companies result in poorly researched products and misleading claims aimed at manipulating consumer.
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Volume-04 ISSN: 2455-3085 (Online)
Issue-01 RESEARCH REVIEW International Journal of Multidisciplinary
January -2019 www.rrjournals.com [UGC Listed Journal]
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GREENWASHING: A Study on the Effects of Greenwashing on Consumer
Perception and Trust Build-Up
*1Manvi Khandelwal, 2Ashok Sharma & 3Vinamra Jain
1Research Scholar, Amity Business School, Amity University, Noida (India)
2Professor, Amity Business School, Amity University, Noida (India)
3Assisatant Professor, Amity Business School, Amity University, Noida (India)
ARTICLE DETAILS
ABSTRACT
Article History
Published Online: 10 January 2019
The growing prominence of green advertising has led to an increased confusion in the
minds of the consumers about the green claims used in numerous advertisements. The
purpose of the study is to identify the sectors where greenwashing is most rampant from the
consumer‘s perspective and to analyze the consumer‘s perception of greenwashing tactics,
identify the reasons for greenwashing by brands from the consumer‘s perspective. The
convenience sampling was used for data collection. A sample size of 150 was chosen for
the study. The respondents comprised of individuals across different age group and
professions in Delhi NCR. Research findings showed that the most rampant sectors where
greenwashing is prevalent are ‗Automobile‘, ‗Industrial Manufacturing‘ and ‗Beauty
products/cosmetics (65.7%). Consumers perceive usage of ‗fluffy language‘ such as the use
of words like ‗eco- friendly‘, ‗natural‘ as the most frequently used greenwashing
communication tactic. A lack of proper regulatory system and compliance by the companies
result in poorly researched products and misleading claims aimed at manipulating
consumer.
Keywords
Greenwashing, perception, green
advertising
*Corresponding Author
Email: manvi.khandelwal[at]outlook.com
1. Introduction
In the early 1990s, products touting environmental claims
saw an exponential rise. Although the ‗green‘ phenomenon
vanished as swiftly as it appeared, to attract an increasing
segment of environmentally aware consumers, many
producers are again resorting to the practice of endorsing their
products, or even themselves, as being green. Therefore,
usage of environmentally friendly sounding claims which are
actually ambiguous and at times may be false is becoming
commonplace. ‗Greenwashing‘ refers to disseminating
incomplete or false information by a company in order to
project an ecologically responsible public image. It is not a new
phenomenon; since the mid-1980s, the term ‗greenwashing‘
has garnered wide acceptance and recognition for describing
the practice of making exaggerated or overblown claims of
eco-friendliness or sustainability in an effort to capture market
share.
In current times, appealing at just the functional or
emotional level is not sufficient for a brand. A social obligation
is expected of businesses by the consumers. In the consumer
product industry, firms usually have to incorporate an
ecological dimension to establish a successful brand (Kotler,
2011).
More than half of 18,000 consumers surveyed in 2014
from all over the world stated that environmental performance
was a source of worry for them (Globescan, 2014).
Compared to previous years, an amplified concern about the
environmental issues was shown by consumers in most
countries. In a study conducted by the American PR firm
(Edelman, 2012), consumers‘ attitude regarding the social
responsibility claims by the corporates were examined. The
study comprised 16 countries and its 8,000 consumers.
Irrespective of the country, it exhibited the consumer belief in
the increased importance of environmental responsibility.
Additionally, it was revealed that 85 percent of the consumers
were keen to change brand or alter their own conduct to help
improve the environment. Several instances have occurred
where unjustified and exaggerated claims of eco-friendliness
and sustainability have been made by companies striving to
meet the demand for green products by consumers
(Terrachoice, 2010). Companies‘ attempt to rapidly meet this
increasing demand for green products has led to the rise of the
term greenwashing, which has grown considerably over the
past years and has become increasingly debatable. In this
study, greenwashing is defined as deceptive or misleading
ecological claims that are ambiguous, untrue, or omits vital
information or a combination of these (Carlson, L., Grove, S.
J., & Kangun, N., 1993). For instance, when it comes to either
branding, marketing or packaging, over 90 percent of North
American consumer products are guilty of greenwashing on
some way or the other (Terrachoice, 2010).
Among some consumers, there is a distrust for
communication by corporates concerning green and eco-
friendly products. Instead of actually adhering to their
communicated green message, there are doubts that firms are
framing a responsible green image without really altering their
behavior, therefore the term greenwashing (Darnall, N,
Pointing, & Vazquez-Brust, 2012) (Jones, P., Clarke-Hill, C.,
Comfort, D., & Hillier, 2008) The use of greenwashing in
marketing efforts leads to numerous questions regarding the
term and its consequences. When consumers are making
choices, what is the role played by design and communication
of advertisements? Is it actually possible to influence buying
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intentions and obtain a more environmentally friendly image
with the use of irrelevant claims and greenwashed messages?
There are many sins of green washing like Sin of the Hidden
Trade-off: A claim proposing that a product is ‗green‘ on the
basis of a narrow set of traits without considering other
significant environmental issues. Sin of No Proof: An
environmental claim that cannot be validated by readily
available supporting information or by a credible third-party
certification. The sin of Vagueness: A claim that is so broad
or poorly articulated that its actual meaning is likely to be
misconstrued by the consumer. Sin of Worshipping False
Labels: A product that falsely gives the impression of a third-
party endorsement either through words or images when no
such thing exists; so called fake labels. The sin of
Irrelevance: It is an environmental claim that may be truthful
but for consumers seeking environmentally friendly products, it
is unhelpful or holds no importance. The sin of Lesser of Two
Evils: A claim that might hold true within the product category,
but at the peril of diverting the buyer from the wider-reaching
environmental impacts of the category as a whole. The Sin of
Fibbing: Environmental claims that are purely dishonest.
2. Review of Literature
Green or environmentally friendly products can be largely
defined as products ―that when compared to the standard
substitutes, will cause less harm to the environment, in terms
of contaminating the earth or diminishing the natural resources,
and/or can be preserved or recycled (Shamdasani, P., Ong
Chon-Lin, G. , & Richmond, D. , 1993). From consumer‘s
perspective, being green constitutes of a lifestyle of minimal
impact on the environment, or in the best case, making choices
that help and benefit the environment. In the pursuit of
minimizing environmental damage, consumers are met with
many decisions (Banerjee, S., Gulas, C.S., & Iyer, E., 1995).
Being green is about consistent efforts, whether large or small,
to lessen the environmental impact.
Numerous strategies are employed by companies to show
their concern for environmental issues. A green advertisement
is one such strategy. The concept of green advertising began
in the 1970s when oil price hike instigated recession and
ecological damages that had been disregarded for long. In a
very short span of time, people were confronted with the fact
that resources were limited and that their usage had a
significant impact on the environment. Companies tried to get
on board this green movement and reacted to consumer‘s
anxiety by employing marketing strategies communicating
green messages (Haytko, D. L. & Matulich, E., 2008) Banerjee
et. Al (1995) explain green advertising as any advertisement
that meets one or more of the subsequent criteria: (1) The
association between a product/service and the biophysical
environment is directly or indirectly addressed by it. (2)
Endorses a green lifestyle with or without stressing a
product/service. (3) Showcases an environmentally
responsible corporate image. (Pranee, C., 2010) establishes
that green advertising must be truthful and lawful and in
adherence to environmental rules, regulations, and policies. In
practice, companies often do not conform to all these
statements but manage to follow the set guidelines in their
arena of advertisement (Eltell, T. & Åberg, 2012).
3. Skepticism towards green advertisement
The growing prominence of green advertising has led to
an increased confusion in the minds of the consumers about
the green claims used in numerous advertisements. One of the
key reasons for the confusion is the absence of commonly
accepted definitions of usual claims used by advertisers such
as ―environmentally friendly‖, ―biodegradable‖, ―natural‖, ―ozone
friendly‖, etc. (Paço, A. M. F. & Reis, R., 2012).
Often, there is a lack of knowledge on the part of the
consumers to comprehend the information that such claims are
based on and although the specificity of guidelines is
increasing, green product claims remain to be unclear and
dubious (Newell, S.J., Goldsmith, R.E., & Banzhaf, E.J., 1998).
In contrast, it is likely that the message will be ignored
altogether by the consumer of it is too descriptive or technical
(Paço & Reis, 2012). The difficulties associated with
discovering the truth and the false in green advertising has led
to an overall cynicism among consumers. This skepticism has
made it tough for the actual eco-friendly firms to communicate
their environmental contribution, which may hamper the growth
and development of real green products. In fact, if the
environmental benefits explained by the ads and labels are
stopped being trusted by the consumers, the effort of
employing green communication for marketing may be lost.
Unconsciously, the skeptical consumer might hinder
environmentally friendly products and their development Paço
& Reis, 2012).
If an advertisement is perceived as environmentally
misleading or greenwashed by consumers, they perceive it as
deceptive (Newell et. al, 1998). Therefore, consumers who
identify an advertisement as greenwashed should perceive it
as more deceptive than a neutral ad. The question is if
consumers can detect the greenwashed claims.
Green or Greenwashed advertising claims
Carlson et. al (1993) categorize environmental advertising
claims by dividing the claims into a matrix of 5 different types:
(1) Product-oriented: claims with a focus on characteristics of
a product (e.g., biodegradable). (2) Process oriented: core
production methods or disposal procedures within the
company (e.g., uses only recyclable materials). (3) Image
orientated: the organization is associated with an ecological
cause (e.g., dedicated to saving the trees or the oceans). (4)
Environmental fact: describing the environment or its state at
large through an independent statement (e.g., forests are
being demolished). (5) Amalgamation of the claims above.
Often, the efforts to explain the phenomenon of greenwashing
differ as the term is defined in a vague and broad concept.
(Delmas, M. A. & Burbano, V., 2011)define the term as ‗a
juncture of two organizational behaviors: poor ecological
performance and communicating positively about
environmental performance.
They projected a typology of organizations constructed on
two dimensions: (a) environmental performance (differentiating
between ―green‖ and ―brown‖ establishments) and (b)
communication about environmental performance
(differentiating between ―vocal‖ and ―silent‖ establishments). A
typology with four cells is formed with these two dimensions.
Firms that combine good ecological performance with positive
communication about their environmental performance are
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called vocal green firms. Firms who have good environmental
performance but do not communicate about it are called silent
green organizations. Firms that combine poor ecological
performance with positive communication regarding their
environmental performance And organizations that combine
bad environmental performance with positive communication
are greenwashing organizations. The final category is of silent
brown organizations which have poor environmental
performance and make no communication regarding their
ecological performance.
In their report titled ―The Drivers of Green Washing‖,
Magali A. Delmas and Vanessa Cuerel Burbano proposed that
occurrence of greenwashing has risen steeply in recent years;
firms have been increasingly combining poor environmental
performance and practices with positive communication about
their environmental performance.
Consumer and investor‘s confidence in ecologically
responsible organizations and green products can be deeply
affected negatively because of greenwashing; leading to
stakeholder‘s reluctance to reward organizations for their eco-
friendly performance. In turn, the incentives to engage in
ecologically detrimental behavior by the firms' increases, which
generate negative externalities and hence affect social welfare
negatively.
4. Why companies use greenwashed advertisement
According to Delmas and Burbano (2011), there are
primarily four fundamental reasons why firms choose to
engage in greenwashing: The character of the firm:
Greenwashing is strongly driven by customers‘ and
competitors‘ expectations to positively emphasize their
environmental performance. For instance, more than the
service industry, there‘s a greater pressure on consumer
products from consumers to follow environmentally friendly
practices and green marketing is much more recurrent here.
Ethical climate and incentive structure: Large financial goals
often lead managers to indulge in unethical practices to
achieve them. So, a company‘s willingness to engage in
unscrupulous practices for profits and enhancing their
environmental standing is greatly impacted by the firm and the
industry‘s ethical climate.
Organizational inertia: New environmental targets and
measures are set up by managers and marketing experts, and
companies are painted as ‗green‘ much before these requisites
are met. Particularly in large older firms, because of the
organizational inertia, operational changes are difficult despite
the promises.
Business‘s internal communication and its effectiveness:
Different departments of a company often communicate poorly
or sub-optimally. Many times, a well-developed strategy for
green marketing by certain superiors or an outside marketing
firm is not aligned with the objectives or resources of other
parts of the organization. Often, inertia in the organization is
associated with this factor.
5. Purpose of the study
To identify the sectors where greenwashing is most
rampant from the consumer‘s perspective. To analyze the
consumer‘s perception of greenwashing tactics. To identify the
reasons for greenwashing by brands from the consumer‘s
perspective. To analyze consumer loyalty and trust build up
towards green claiming brands.
6. Research Methodology
The convenience sampling was used by the researcher in
selecting the sample from the target population. A sample size
of 150 was chosen for the study. The respondents comprised
of individuals across different age group and professions in
Delhi NCR. A structured questionnaire was used to obtain
relevant primary data which was mailed to respondents. The
questionnaire was constructed using a 5-point rating scale and
consisted of 15 questions. The questionnaire contained various
aspects of greenwashing advertisement and the primary focus
is the consumer‘s perception of greenwashing and its
communication. Personal interviews and observations were
also made for further clarification. SPSS statistics was used to
perform the necessary analysis of the data. Bar graphs, tables,
and charts have been used to present the data. Further
analysis was carried out by calculating the Mean Scores and
performing Cross Tabulations with the help of SPSS.
7. Data Analysis and interpretations
Table1: Respondents profile
Frequency
Gender
Female
84
Male
66
Age
Below 20
13
20-30
73
30-40
47
40 and above
17
Occupation
Self-employed
48
Service
55
Homemaker
17
Student
30
Annual Income
Less than 5 Lakh
49
5-10 Lakh
58
10-15 Lakh
19
More than 15 Lakh
24
Green User
Yes
62
No
88
Out of the total respondents, 55.7% were female and
44.3% were male. 48.6% are in the age group 21-30, 31.4%
are in between 31-40, 11.4% are 40 and above and 8.6% are
below the age of 20. 37% are in service, 31.4% are self-
employed, 20% are students and 11.4% are a homemaker.
38.6% have their annual income between 5-10 lac, 32.9%
have less than 5 lacs, 15.7% have income 15 lac and above
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and 12.9% have income between 10-15 lac. 58.6% of them
consider themselves green users while 41.4% do not consider
themselves green users.
Frequency
68
66
58
39
44
49
44
Out of the total 150 respondents, 62 are green product
users. Further, 78.1% of the users cited ‗value for money‘ and
75% cited ‗I think green products are of superior quality‘ as the
primary reasons they go for green products. Other key reasons
for opting for green products are ‗I trust green-product claims‘
(65.6%), ‗awareness of green products‘ (56.3%), ‗relevance of
green products to the shopping needs‘ and ‗easy availability of
green products‘ (50%).
Table 3: Reasons for not buying Green
Products
Frequency
Don't think Green products are relevant to
shopping needs
56
I am unaware of Green products
24
Don't know where to find Green products
66
Feel there are not enough Green product
options
60
Don't trust Greenproduct claims
38
I think Green products are of lesser quality
26
I think Green products are too expensive
47
Out of the total 150 respondents, 88 denied being green
users. Further, 75.6% of the non-users cited ‗don‘t trust green-
product‘ claims as the chief reason for not buying green
products. The next key reason is ‗not enough green options‘
(68.3%) followed by ‗I think green products are too expensive‘
(63.4%). Other reasons for not buying green products are
‗don‘t think green products are relevant to the shopping needs‘
(53.7%), ‗don‘t know where to find green products‘ (43.9%) and
‗unawareness of green products‘ (29.3%)
Table 4: Sectors where the greenwashing
concept is more rampant according to
consumer
Frequency
Agriculture
49
Automobile
116
Beauty products/Cosmetics
99
Clothing
56
Electronics
94
Food/Beverage
56
Financial Services
28
Government
36
Healthcare
88
Industrial manufacturing
112
Utility goods
77
From the data collected, the most rampant sector engaged
in greenwashing as per the consumer‘s perspective is
‗automobiles‘ with 116 respondents (77.1%) opting for it which
is closely followed by ‗industrial manufacturing‘ with
112(74.3%) responses. The other sectors are ‗beauty
products/cosmetics‘ with 99 (65.7%) responses, ‗electronics‘ at
94(62.9%), ‗healthcare‘ (58.6%), ‗utility goods‘ (51.4%),
clothing and foods/beverages (37.1%), agriculture (32.9%),
‗government‘ (24.3%) and lastly ‗financial services (18.6%).It is
evident from the study that consumers perceive automobiles
and industrial manufacturing as sectors which mislead them
the most regarding their green claims and have the highest
probability of engaging in greenwashing.
The data obtained from the questionnaire meets the
reliability standards. Cronbach‘s Alpha value gained is 0.729
and the minimum acceptable value for the reliability of data is
0.7.
Table 5: Greenwashing tactics perceived
by the consumers
Mean
Std.
Deviation
Fluffy language(Words or terms with 2 clear
meaning e.g. eco- friendly
1.63
0.783
Green product vs. dirty company(Such as
efficient light bulbs made in a factory that
pollutes rivers.)
2.04
0.751
Suggestive pictures(Green images that
indicate an (unjustified) green impact (e.g.
flowers blooming from exhaust pipes).
1.96
0.824
Emphasizing one tiny green attribute when
everything else is not green
2.03
0.701
Declaring they are slightly greener than the
rest, even if the rest are pretty terrible.
2.06
0.883
Greening a dangerous product (e.g.
Cigarettes)
2
0.722
Use of scientific words
1.83
0.722
It could be right, but there is no evidence
2.37
0.951
Totally fabricated claims or data.
2.56
1.03
The most commonly used greenwashing communication
tactic as perceived by the consumers is ‗fluffy language‘ with a
mean score of 1.63. The second place is occupied by ‗use of
scientific words with a mean score of 1.83 followed
Volume-04, Issue-01, January-2019 RESEARCH REVIEW International Journal of Multidisciplinary
RRIJM 2015, All Rights Reserved 611 | Page
by‗suggestive pictures‘ with a mean score of 1.96. Other
greenwashing tactics used by the companies and their mean
scores are ‗greening a dangerous product‘ (2.00),
‗emphasizing one tiny green attribute when everything else is
not green‘ (2.03), ‗green product vs dirty company‘ (2.04),
‗declaring they are slightly greener than the rest even if rest is
pretty terrible‘ (2.06), ‗totally fabricated claims or data‘ (2.56)
and ‗no evidence‘ (2.37)
Table 6: Reasons why companies use
Greenwashing as perceived by
Consumer
Mean
Std.
Deviation
To Increase brand credibility
1.63
0.685
To Improve company or brand image
1.94
0.657
Competitive advantage
2.27
0.588
Employee satisfaction, morale, retention
2.47
0.829
Product, service or market innovation
2.16
0.792
Business model or process innovation
2.13
0.76
New sources of revenue or cash flow
2.21
0.815
Enhanced stakeholder relations
2.8
0.987
The most common reason for the brands to engage in
greenwashing as perceived by the consumers is ‗to increase
the brand credibility‘ with a mean score of1.63. The second
most important reason is ‗‘to improve company or brand
image‘. Other motives and their mean scores are ‗business
model or process innovation‘ (2.13), ‗product, service or market
innovation‘ (2.16), ‗new sources of revenue or cash flow‘
(2.21), ‗competitive advantage‘ (2.27), ‗employee satisfaction,
morale, retention‘ (2.47), and ‗enhanced stakeholder relations‘
(2.80)
Table7:
Crosstab
I will terminate
any relationship
between me
and the
company if I find
the brand is
engaged in
Greenwashing.
Agree
Neutral
Disagree
Total
Victim of
Greenwashing
Yes
22
7
8
37
No
20
3
2
25
Maybe
30
38
20
88
Total
72
48
30
150
Out of the 37 respondents who agreed to have been
victims of greenwashing, 22 agreed that they will terminate any
relationship with the company engaged in greenwashing, 7
were neutral, 8 disagreed. Out of the 25 respondents who have
never been a victim of greenwashing, 20 agreed that they will
terminate any relationship with the company engaged in
greenwashing, 3 were neutral and 2 disagreed. The maximum
number of respondents, i.e., 88 opted for ‗maybe‘ and were
unsure whether they have been victims of greenwashing. Out
of these 88 people, 30 agreed that they will terminate any
relationship with the company engaged in greenwashing, 48
were neutral, 30 disagreed
Table 8: Crosstab
I intend to keep purchasing
from the
brands claiming green.
Total
Agree
Neutral
Disagree
Victim of
Greenwashing
Yes
17
10
10
37
No
15
4
6
25
Maybe
48
30
10
88
Total
80
44
26
150
Interpretation: Out of the 37 respondents who agreed to
have been victims of greenwashing, 17 agreed that they intend
to keep purchasing from the brands claiming green, 10 were
neutral and 10 disagreed. Out of the 25 respondents who have
never been a victim of greenwashing, 15 agreed that they
intend to keep purchasing from the brands claiming green, 4
were neutral and 6 disagreed. The maximum number of
respondents, i.e., 88 opted for ‗maybe‘ and were unsure
whether they have been victims of greenwashing. Out of these
88 people, 48 agreed that they intend to keep purchasing from
the brands claiming green, 30 were neutral and 10 disagreed.
8. Result and discussions
According to the consumers, the most rampant sectors
where greenwashing is prevalent are ‗Automobile‘ (77.1%),
‗Industrial Manufacturing‘ (74.3%) and ‗Beauty
products/cosmetics (65.7%). Consumers perceive usage of
‗fluffy language‘ such as the use of words like ‗eco- friendly‘,
‗natural‘ as the most frequently used greenwashing
communication tactic. It is followed by the use of ‗scientific
language‘, use of ‗suggestive pictures‘ such as that of flowers
blooming from an exhaust pipe or unnecessarily using the
green background to falsely imply a green product or brand
and ‗greening a dangerous product‘ such as cigarettes.
‗Increasing the brand credibility‘ is one of the major reasons
why brands engage in greenwashing according to consumer
perception. Portraying a brand as ‗green‘ is supposed make it
more trustworthy and reliable. ‗Improving the company or
brand image‘, ‗business or process innovation‘ and ‗new
revenues of cash flow are other reasons consumer perceive
as motivating organizations to greenwash consumers.
Out of the total respondents surveyed, 25% agreed to have
been greenwashed while only 16% denied being
greenwashed. A majority of those surveyed, i.e., 59% were
unsure whether they had been greenwashed at some point. It
can be inferred that consumer awareness about greenwashing
is relatively low and so they can be easily misled by the profit-
hungry companies.
Irrespective of the fact whether they have been
greenwashed before, a majority of the respondents were in
agreement that they will terminate any relationship with the
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brand if they find out about its greenwashing practices.
However, the respondents show an inclination towards the
brands claiming green which may lead to repeat buying
behavior. It can be inferred that merely portraying a brand as
green can have significant trust build up among the consumers
and increase consumer loyalty.
9. Conclusion
In recent times, the number of products advertised as
being green as increased enormously. Changing consumer
lifestyle, growing awareness about harmful chemicals,
increasing disposable incomes, proven efficacy of natural
products and growing concern for the issues plaguing the
environment have all led to companies trying to cash on this
shift in consumer attitude. As a result, greenwashing has
become rampant, as the overlap between the real business
practices and what is communicated to the consumers
reduces. Especially in India, a lack of proper regulatory system
and compliance by the companies result in poorly researched
products and misleading claims aimed at manipulating
consumer.
The presence of loopholes and an almost-80-year law
finally affect only one segment consumers. Buyers often do
not have enough information about such products but
nevertheless, make purchases based on advertisements and
market positioning.
From the study conducted, it is inferred that consumers do
have an understanding of greenwashing tactics used by the
firms such as the use of words like ‗herbal‘, ‗organic‘ and
natural but when it comes to their buying behavior, they often
do not make informed choices and end up being greenwashed.
‗Green‘ suggestive labels, pictures, words, and packaging
seem attractive to the new age consumer who is inclined to
buy the product.
Firms try to increase their credibility and improve brand
image through the practice of greenwashing. But the truth is
once the false claims are revealed, there is a greater risk of
tarnishing the brand image and losing the trust built over the
years among the consumers as happened with the case of
Volkswagen, also leading to legal hassles. Hence, it is
imperative for companies to conduct their business ethically
and for the consumers to be aware and make informed
purchase choices such as check if the product packaging has
the full list of ingredients, take a look at what is mentioned in
the company‘s website and that the product should be certified
by an authorized government body.
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... Changing consumer lifestyles, raising awareness of harmful chemicals, increasing revenue, proven effectiveness of natural products and growing concern for environmental issues have led all companies to try to benefit from this change in consumer attitudes. As a result, greenwashing has become refined, as this practice overlaps with real business practices and what is communicated to consumers (Khandelwal et al. 2019). ...
... The study found that some consumers have an understanding of the greenwashing tactics used by companies, such as the use of images, words and suggestive packaging that seem attractive to the consumer who is inclined to buy the product, but when it comes to their buying behavior, they often do not make 30% 70% yes no 24% 76% yes no 83% 17% yes no informed choices and continue to buy the products of greenwashing companies. These conclusions are în accordance with those of the study conducted by Khandelwal 2019. By describing the essence of consumers' lived experiences with companies that practice greenwashing, we sought to discover new meanings related to the phenomenon. ...
... Users of cosmetic products do not have an understanding of green washing tactics used by the firms such as the use of words like herbal, organic and natural. When it comes to making the purchase decision users often do not make informed choices and end up being green washed (Manvi Khandelwal, 2019) 3 . ...
... Users of cosmetic products do not have an understanding of green washing tactics used by the firms such as the use of words like herbal, organic and natural. When it comes to making the purchase decision users often do not make informed choices and end up being green washed (Manvi Khandelwal, 2019) 3 . ...
Article
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Cosmetic companies seek to build strong bonds with its users and green washing is a strategy used by companies to emphasise sustainability. Green washing includes irrelevant claims, misleading labels, usage of fluffy language, images of leaves and flowers on products, green packaging and jargons on products that only scientists could understand. This paper throws light on various dimensions of user's perception towards green washing and its ethical implication on firms selling cosmetic products in Madurai District of Tamilnadu. The results of a survey conducted among female users of cosmetic products in Madurai district are presented.
... Therefore, any sustainability claims that companies belonging to such industries make are likely to be met with distrust. For instance, respondents to a survey ranked the Automobile sector to be the most highly engaged in greenwashing of all industries (Khandelwal et al., 2019). Therefore, consumer skepticism toward claims of sustainability could be dependent on the industry. ...
... Therefore, To analyze whether consumer skepticism is industry-specific (H6a), respondents were asked to rank five industries based on their trust in them from 1 to 5 ("1" as low trust and "5" high trust). They were given options of industry sectors where greenwashing is more rampant, such as the oil and automotive sectors (Khandelwal et al., 2019), as well as sectors that have a broad range of consumers independent from culture, gender, and age, such as fashion and technology. The food sector was also chosen since consumers are becoming increasingly concerned about environmental and social sustainability within the food sector (Civero et al., 2017). ...
Article
With the increasing trend toward sustainable purchasing, companies invest vast sums of money advertising their sustainability. Yet there are also companies doing the exact opposite for fear of consumer skepticism toward sustainability claims. Consumer skepticism can have adverse effects on company image and performance. Therefore, for the success of a company's sustainability campaign, it is essential that they are familiar with the factors resulting in consumer skepticism. This research has investigated these factors. Through a survey-based approach and analysis using structural equation modeling, it has been found that a main cause of consumer skepticism is previous incidents of greenwashing. Furthermore, consumers are more skeptical of large companies than smaller companies. The research also indicates that consumer skepticism towards a company is industry-specific, with the oil industry being the least trusted. The effect of demographics was also studied, finding that women are more skeptical. Contrary to previous literature, collectivist cultures were found to be more skeptical than individualistic cultures. This research has also explored consumer perspectives towards silent sustainability, finding that highly skeptical consumers prefer companies to limit their sustainability advertisements. Companies silent about their sustainability invoke less consumer skepticism than those advertising sustainability. This research has filled major research gaps in the field of consumer skepticism and silent sustainability and carries important implications for companies advertising in today's market, as well as for policy makers.
... Bu uygulamalar yoğun olarak reklam aracılığıyla gerçekleşir (Feinstein, 2013, s. 229). Bir araştırmada tüketicilerde 'çevre dostu', 'doğal' gibi kelimelerin kullanılması gibi 'kabarık dil' kullanımını en sık kullanılan yeşile boyama iletişim taktiği olarak algılandığını ortaya koymuştur (Khandelwal, Sharma ve Jain, 2019). Yeşile boyama ile işletme amaçlarının ve/veya politikalarının çevre dostu olduğu algısı oluşturmak için yeşil halkla ilişkiler veya yeşil pazarlama faaliyetleri müşterileri aldatıcı, yanıltıcı bir şekilde uygulamaya konulur (Du, 2015, s. 548). ...
Article
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Çalışma, işletmelerin yeşile boyama uygulamalarına ilişkin tüketici algılarını ölçmek amacıyla gerçekleştirilmiştir. Bu kapsamda işletmelerin yeşile boyama uygulamaları ile tüketicilerin yeşil marka aşkı, yeşil marka imajı, yeşil marka sadakati ve yeşil satın alma davranışları arasındaki ilişki incelenmiştir. Araştırmanın evrenini Türkiye’de yeşil ürünleri deneyimleyen tüketiciler oluşturmaktadır. Araştırmanın veri analizi için Smart (PLS-SEM) kullanılmıştır. Gerçekleştirilen yapısal eşitlik modeli sonuçlarına göre, yeşile boyamanın yeşil satın alma davranışı, yeşil marka aşkı, yeşil marka imajı ve yeşil marka sadakati üzerinde olumsuz bir etkisinin olduğu tespit edilmiştir. Diğer yandan yeşil marka aşkı, yeşil marka imajı ve yeşil marka sadakatinin yeşil satın alma davranışı üzerinde olumlu etkileri olduğu belirlenmiştir. Çalışma kapsamında yeşil marka aşkı, yeşil marka imajı ve yeşil marka sadakatinin yeşile boyama ile yeşil satın alma davranışı arasında aracılık etkisi belirlenmeye çalışılmıştır. Gerçekleştirilen analizler neticesinde yeşil marka aşkı, yeşil marka imajı ve yeşil marka sadakatinin yeşile boyama ile yeşil satın alma davranışı arasında negatif kısmi aracılık etkisi tespit edilmiştir.
... The argument behind such a result was that markets can respond negatively to announcements by a firm that they are engaging in environmental sustainability initiatives. This is because most stakeholders associate such moves with greenwashing (Griese et al., 2017;Khandelwal et al., 2019). ...
Article
Full-text available
Attaining sustainable development will remain an elusive agenda if there is no effective stakeholder engagement. All stakeholders need to come on board to share and collaborate on environmental sustainability initiatives. This study investigated the relationship between stakeholder engagement and financial performance. The study area of this study was all FTSE/JSE listed firms. The researcher opted for a quantitative research approach and used a case study research design. The longitudinal design was adopted where the researcher collected panel data from 2011-2018. The sample of this study was 32 firms listed on the FTSE/JSE Responsible Investment Index. This resulted in 256 observations for the period under consideration. This study utilised secondary data, which is annual financial statements of firms listed on the JSE. Stakeholder engagement was the independent variable while the financial performance as measured by the Tobin's Q was the dependent variable. Quantitative content analysis was used to collect data related to stakeholder engagement. Data was analysed using Panel regression analysis model. The Fixed and Random effects models were used to analyse data. The Hausman test was used to evaluate the appropriate model. The findings showed a positive but insignificant relationship between stakeholder engagement and financial performance as measured by Tobin's Q. This suggested that stakeholder engagement does not predict market valuation of the firm. It was deduced that probably the concerned firms are sending weak signals to key stakeholders regarding their genuine commitment towards environmental sustainability initiatives. Recommendations were made for firms to send strong signals to investors which clearly show that they are genuinely committed towards environmental sustainability initiatives.
... Alihalih menerapkan secara nyata nilai ramah lingkungan pada proses dan produknya, terdapat bisnis yang sekadar melabeli diri dengan citra ramah lingkungan tanpa benar-benar meminimalisasi dampak negatif bisnis pada lingkungan. Akibatnya, terdapat fenomena greenwashing yang terjadi karena adanya tumpang tindih antara praktek nyata bisnis dengan apa yang dikomunikasikan kepada konsumen [5]. Greenwashing adalah klaim lingkungan perusahaan yang tidak jujur, meragukan atau menyesatkan. ...
... Nevertheless, listed firms are responding slowly to the call for environmental sustainability commitment in terms of compliance and reporting [7]. Consequently, some firms are involved in fraudulent activities to escape environmental commitment [8], while others are involved in greenwashing [9]. On that backdrop, it is noted that the number of highly sustainable firms remain low as compared to firms that do not commit to environmental sustainability initiatives [10]. ...
Article
Full-text available
The importance of heeding the environmental sustainability commitment call cannot be underestimated. Laggards in terms of environmental sustainability commitment are likely to face fines and penalties as talks to tighten environmental legislation are now at an advanced stage globally. The current work assessed the link between environmental sustainability commitment and financial performance of firms listed on the Johannesburg Stock Exchange (JSE). The study was quantitative in nature with a case study research design. The longitudinal design was adopted where the researcher collected panel data from 2011–2018. The population of the study included all firms listed on the JSE Responsible Investment Index in South Africa. The sample constituted of 32 firms listed on the Financial Times Stock Exchange FTSE/JSE Responsible Investment Index in South Africa. The researchers employed the panel regression analysis model to analyze the data. Specifically, the Feasible Generalized Least Squares regression model was used in this study. Financial performance was treated as the dependent variable as measured by earnings per share and share price. The independent variables of the study included components of environmental sustainability such as carbon emission reduction and environmental compliance. Control variables such as firm size and liquidity were used in the study. The findings indicated that carbon emission reduction was positively and significantly related to earnings per share and share price. The findings further exhibited that environmental compliance was positively related to earnings per share and share price. It was concluded that firms can enhance their financial performance from environmental investment as all the hypotheses were supported. This study contributes practically towards shaping environmental policies and it also serves as motivation to listed companies that they can enhance both their profitability and market value from environmental investments.
Article
Full-text available
As organizations seek to communicate with consumers who are concerned about the environment, advertisements containing environmental claims are becoming more prominent. While much has been written about environmental advertising, this phenomenon has seldom been examined systematically. This paper presents an empirical study which combines two classification schemes to create a matrix that identifies different types of environmental claims and the likelihood that such claims will be judged as misleading and/or deceptive. Results suggest that those claims which extol the environmental benefits of products and those that are designed to enhance the environmental image of an organization are most prone to be considered misleading and/or deceptive. Methods for improving environmental advertising are suggested.
Article
Full-text available
Recently, global warming and environmental issues have come to the forefront, with companies like Coca-Cola joining General Electric Co., Toyota, IBM and others to focus on sustainability (Bush, 2008). The results of this study uncover additional factors beyond those found 15 years ago in studying green advertising and consumer behaviors. However, similar to previous research, consumers who are more proactive with their environmental behaviors also have better attitudes toward green advertising. The results imply that green advertising may be best at reaching those who are already practicing green behaviors.
Article
This study investigates whether consumers who are exposed to an ad containing a deceptive environmental claim have significantly different attitudes about the ad than those consumers exposed to a similar non-deceptive ad. As hypothesized, higher levels of perceived deception were associated with lower levels of perceived corporate credibility, less favorable attitudes toward the ad, less favorable attitudes toward the advertised brand, and decreased purchase intentions toward the product in the ad. In addition, the study found that the perception of deception was enough to create negative feelings toward the ad, whether the ad was objectively misleading or not. Consequently, marketing and advertising managers need to proceed with caution when developing environmentally focused ad campaigns.
Article
Despite the growth of green marketing, there is a shortage of studies on green communication. Thus, this research aims to understand whether consumers who are concerned about the environment conserve resources and have environmentally friendly buying habits and whether they are skeptical about the green communications conveyed by companies. Using a proposal of a model about skepticism toward green advertising, several hypotheses are tested. The results indicate that the more environmentally concerned an individual is, the more skepticism he or she will be toward green claims exhibited on packages or featured in ads. In addition, results indicated no significant differences between men and women regarding this skepticism.
Article
Environmental appeals are becoming increasingly common in advertising, but all green ads are not created equal. The authors report the results of a content analysis designed to uncover the underlying structure of green advertising. A convenience sample of 95 green TV ads and 173 green print ads were content-analyzed. Multidimensional analysis indicates that the structure of green advertising can be captured in three dimensions: sponsor type (for-profit or nonprofit), ad focus (whether the ad focuses on the advertiser or the consumer), and depth of ad (shallow, moderate, or deep depending on the extent of environmental information mentioned). A majority of advertisers in the sample attempted to project a green corporate image rather than focusing on the environmental benefits of their product or service.
Article
Purpose – The purpose of this paper is to raise for debate among marketers the issue of the relationship between marketing and sustainability. Design/methodology/approach – An opinion piece, that presents the views of four authors on the current state of the debate in this field. Findings – There is little consensus on these matters. There are those who believe that marketing and sustainability simply cannot be reconciled, while there are others who argue that marketing can contribute to the development of sustainable consumption. Originality/value – The paper opens up the debate on a subject that is clearly going to be high on the agenda for years to come.
Green-Growth: Managing the Transition to Sustainable Capitalism
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Darnall, N, Pointing, C., & Vazquez-Brust, D. (2012). Green-Growth: Managing the Transition to Sustainable Capitalism. New York: Springer, 287-308.
The drivers of greenwashing. California management review
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Marketing ethical implication & social responsibility
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