Greenwashing vs. Real Change:

How Companies Can Build Credibility and Trust

In business and life, we often face tough choices. Companies have an obligation to their consumers and shareholders to deliver a high-quality product that is quick, efficient, and cost-effective. The need for strong returns can put decision-makers in a difficult position. Creating sustainable products often costs more, with little immediate return on investment, making it tempting for companies to cut corners.

While small changes are a good starting point, there’s a risk when companies oversell these changes, creating an image of being more environmentally conscious than they actually are. This practice is called "greenwashing” (Stein, 2024). Greenwashing can ultimately backfire and damage the trust of both customers (Ioannou et al., 2022) and investors (File, 2024)—the very groups companies rely on to maintain profitability.

Corporate Social Responsibility (CSR) strategies have evolved over time, and the increasing presence of social media has made these relationships with customers more important than ever. Many companies use CSR to build brand loyalty by associating themselves with favorable values, thus differentiating themselves from competitors (Marin, 2009). However, this can create a dilemma for companies when the visible changes don’t directly impact the bottom line, but instead only shape consumer perceptions.

Perception can be powerful. Customers may choose to purchase from a company they perceive as more environmentally responsible (“Recent,” 2021). But when customers eventually discover that they were misled, the repercussions are severe. Not only can customer loyalty be lost, but those customers may switch to another brand that they believe is more trustworthy. The frustration and betrayal felt by these consumers can spread, damaging the company’s reputation and resulting in lost sales that may be difficult, if not impossible, to recover (Sajid et al., 2024).

Environmental consciousness is growing among consumers, and some are even willing to pay a premium for products that align with their values (Am et al., 2023). One study showed that public perception of environmentally responsible practices positively influences customer behavior, and a company’s CSR initiatives can resonate with these consumers and influence their purchasing decisions. However, when these companies are exposed for being dishonest about their sustainable practices, the backlash can be swift (Neureiter and Matthes, 2023).

Instead of using social concerns, including environmental action as a marketing tactic, your organization needs to be proactive in terms of the work that you do to address sustainability, including the way you present that information.

To avoid the greenwashing label and engage in authentic CSR initiatives, companies can create opportunities for themselves. Authentic change happens when organizations create a company culture of change (Martin and Rubio, 2024); a belief that permeates an organization’s identity is a good place to start. More than simply paying lip service to sustainable practices, a company that invests in a full cultural overhaul will see social issues like sustainability become part of the brand.

Other ways you can embrace sustainable practices in authentic ways (Davison, 2024; and Reckmann, 2024):

• Commit to responsible practices: reduce waste, improve supply chain practices, and use sustainable materials.
• Use clear messaging with your customers so they understand precisely what measures you have taken toward sustainability.
• Keep going. It’s okay to start small, but continue to improve
• Monitor best practices, and honestly assess your organization’s progress.
• Seek feedback from customers and industry members to keep your claims honest and focused on appropriate goals.
• Keep informed about regulations, and, if in doubt, consult an environmental attorney.
• Clearly communicate your claims so that you do not overstate your claims.
• Adhere to environmental standards like ISO 14001 and other regulations for transparency and accountability.
• Provide evidence of your claims through independent, third-party certifications.

Once the CSR efforts become an integrated part of your company’s culture—not simply a marketing initiative—the story can be told in a way to shine a spotlight on your contribution to sustainability. Effective communication allows transparency, and using technology can help with messaging (Davison, 2024). Product QR codes allow succinct delivery of the full scope of sustainability efforts, allowing embedded fact sheets, video testimonials, and progress updates.

WIST can help to support your sustainability claims. Our testing services allow you to back up your claims with real science and industry-standard endorsements. With 15 years of industry experience, our team of experts is ready to assist you.

Contact us today for more information about services.

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