Want a more sustainable future? We have to tackle greenwashing first.
Cowritten with Regan Plekenpol, MPH
I like to think it would be hard to find someone who actively tries to be unsupportive of the environment. Saying “screw Mother Earth” probably carries similar social condemnation to saying “I hate puppies.” Even more importantly, the majority of Americans actually view climate change as a major threat, according to a Pew Research Center survey conducted in 2020. When people view climate change as a major threat, they are more likely to take and support action to combat it. Theoretically, this is good news for Mother Earth (and all of our future children, grandchildren and great-grandchildren), but — you guessed it — there’s a “but”….
One of the most popular actions for the average American to take to “save the planet” is to purchase “greener” products. This could be an especially powerful lever in industries like fashion because while the fashion industry makes up just 4% of the global economy, the World Bank estimates that the fashion supply chain is responsible for 20% of all industrial water pollution annually, and McKinsey & Company projects that the fashion sector alone generates 10% of total greenhouse gas emissions and uses 25% of all chemicals produced worldwide. But what if people’s well-intended efforts aren’t leaving the impact they think they are?
When is buying “greener” products not actually helpful?
When companies market their products as “greener” and more environmentally-friendly, but, in reality, they are not. This deceptive marketing practice is called “greenwashing,” and it permeates industries ranging from fashion to food, vitamins to vehicles. The DL on greenwashing is that companies will throw labels on their products, calling them things like “sustainable” and “responsible,” or maybe just change the tag or label color to green. However, these claims aren’t necessarily backed up because there’s no standardized qualification for a company to call their products any of these things. (In economics, this costless, non-binding, non-verifiable communication is referred to as “cheap talk.”) In fact, when a study called the Six Sins of Greenwashing measured the pervasiveness of greenwashing in over 1,000 “green” products from category-leading brands, all but one of the evaluated products made environmental claims judged “demonstrably false” or misleading.
Why is greenwashing a thing?
Many companies have realized green is the new black and that making their products appear as “green” as possible is good business. After all, which shirt would you rather buy: a fast fashion shirt associated with human industrial disasters, like the Rana Plaza building collapse in Bangladesh or the shirt that is made from plastic that has been taken out of the ocean?
What does this say about us, the consumers?
The “conscious consumer” should not be at fault here. In fact, they should be given serious snaps for trying to save the planet. The problem here is that we as consumers are being put at a significant disadvantage because greenwashing takes advantage of economic principles alongside systematic biases and heuristics in human decision-making.
Say what now?
“Biases” and “heuristics” are two central components to behavioral science, a field that sits at the nexus of psychology and economics, dedicated to the study of how humans make decisions and how that decision-making process systematically deviates from traditional economics’ “rational” decision-making. A fundamental concept of behavioral science is the simultaneous function of two systems in the brain: System 1 and System 2. Initially coined by Daniel Kahneman, System 1 guides us through many critical decisions — like detecting emotions on the faces of people we talk with and mindlessly walking to your favorite cafe. System 1 requires minimal effort to guide these quick, automatic decisions. Meanwhile, System 2 is a more effortful, slow, deliberative decision-making process that we engage for decisions like who we will marry and how we weigh different job offers.
One primary advantage of System 1 is that it demands less cognitive effort. People have limited cognitive capacity, and to thoroughly process all the information coming in from the world around us would be inefficient, if not impossible. To streamline the abundance of informational inputs, we rely on mental shortcuts, something referred to as “heuristics” in behavioral science, to make decisions. That said, System 1 is not without its Achilles’ heel. In its attempt at efficiency, System 1 is also susceptible to systematic biases in decision-making. People take advantage of cognitive overload and exploit System 1 in marketing constantly, using claims and labels that marketers count on causing people to jump to conclusions and largely go unchecked. In this way, greenwashing exhorts cues, like the color green, depictions of nature and words like “sustainable” in the hopes that consumers’ System 1 makes the jump to saving the planet, and in turn that influencing their choices. The average consumer sees these images and buzzwords and automatically associates concepts like healthy, pure and natural. However, these are just leaps we make and often not aligned with reality.
So what else is going on here?
Greenwashing mistakenly leads consumers to believe that it is possible to purchase — or even plant — their way out of a problem that is largely consumption-driven. When consumers are faced with purchasing choices, they make decisions with incomplete information, creating fertile ground for companies selling goods to engage in “signaling” to provide information that influences decision-making.
Each product evaluation involves two groups of characteristics: indices and signals. Indices are observable, unalterable attributes (such as the material of a shirt or the ripeness of a fruit) while signals are subject to manipulation (such as the label or price attached to a product). Many companies recognize that it’s easier to change things associated with a product than the product itself, so they strategically manipulate signals — such as labels — to guide consumers’ decision-making processes. Utilizing signals benefits a company by alerting consumers to desirable attributes, like health benefits (e.g., via claims on the bottle) or ethical processes (e.g., via smiling photos of those involved in production), and justifying increases in price. When compared with cheaper, non-green counterparts, the relative price positioning alone can suggest (or signal) corporate social responsibility (CSR) and high quality. Environmental products typically retail at comparatively high prices, as buyers perceive additional benefits and succumb to a “vote with your dollar” mentality that deceptively levels consumption with activism. However, in these purchase contracts, a firm may provide misleading information about a product’s environmental attributes or CSR activities through self-declared labels. Customers are then affected because they do not receive the environmental impact for which they paid. If you’re getting fired up and want to see a pretty egregious case of greenwashing, check out this class-action suit targeted luxury beverage retailer Fiji Water.
Is there any good news?
While economic and behavioral science principles make greenwashing more effective, they also offer ways to combat the effects of greenwashing. Shy of federal regulation setting detailed requirements to substantiate the most common terms and phrases used to greenwash directly, there are a number of other possible solutions.
Defaults are one of the most effective, well-established concepts in behavioral science and can be used to counteract the deception of greenwashing. The strengths of defaults lie in not only in providing a mechanism to harness human tendency towards inaction (I’m sorry but in general, we’re lazy) but also in conveying an implied endorsement — just as consumers assume things on the shelf are regulated for safety and claims, they also assume the default option is the recommended one. One idea here is that regulation could mandate that e-commerce platforms use verified “green” claims to inform the layout of their website and make the default sort order for products one that lists the most environmentally responsible items first. (After all, how often do you ever really go past the first page?) Regulations could also mandate that fashion companies offer opt-out buy-back programs, where brands commit to nudging a circular economy by rewarding customers who return garments for repair, resale or recycling.
Without federal regulation, the main agent to instigate change lies in the market. Since it’s in companies’ best interests to cater to consumer demand, in a way that change agent is us. What’s one way to promote a consumer shift towards choices that are more sustainable? Show people their friends are doing it. For example, the Fashion Revolution uses the social media hashtag “who made my clothes?” to encourage consumers to publicly hold fast fashion brands accountable to their environmental and labor rights claims while at the same time providing a way to show their friends what a good person they are. Such movements help shift social norms, encouraging consumers to visibly endorse and support environmentally-friendly brands and practices, and to simultaneously stigmatize those that fall short. When greenwashing is exposed, the perpetrators’ reputational costs may come to outweigh greenwashing benefits, providing a deterrent effect. What was once costless cheap talk for brands now has a price. In other words, movements such as #whomademyclothes have the potential to become so impactful that the cost of claims could outweigh the benefit, forcing brands to sincerely clean up their practices if they seek to profit from the emerging consumer inclination towards genuinely eco-friendly products.
Where does that leave us?
Environmentalism and the hedonic treadmill of consumer culture, fueled by ceaseless promotion, planned obsolescence and artificial need, are fundamentally at odds — “biodegradable” or not. While few shoppers solely prioritize environmentalism, all consumers have a right to protection from deceit. Until regulation is enforced, transparency is improved, and citizens are informed, greenwashing will persist. Shy of regulation targeting greenwashing directly, behavioral science principles, such as defaults and social norms, can be leveraged to drive credible environmental action, going further than simply reducing harm, but radically reversing the greenwashing trend by shifting the market equilibrium. The status-quo cannot remain the default. The looming climate crisis can’t afford it.
