Instrumentalizing sustainability as greenwashing

Many corporations have been instrumentalizing the sustainability boom and skillfully use it as a marketing and sales strategy by simulating fair products with their own slogans and labels.

Good intent or greenwashing?
Sometimes I have the feeling that those who strive to bring good into the world are viewed particularly critically, because everything is being questioned today. And that's a good thing, because the mistrust is often absolutely justified, as countless examples testify to. 

Many work with hidden compromises - insofar as a small part is environmentally friendly, but the rest is not talked about - or with glossing over, veiling and images that distract from the content. Even false statements are used or the evidence of the proclaimed sustainability is simply missing, because "as we know, paper is patient". Let us accept good intentions, because greenwashing does not necessarily have to be intentional. The question is also: where does greenwashing begin? And as is so often the case: “The devil is in the details.”

I recently saw a press release with the headline “Austria prevents greenwashing”. While many member states wanted to establish a close link between nuclear research and Europe's climate neutrality, Austria has spoken out against it and is of the opinion that nuclear energy does not deserve the label “climate neutral”. Just because this form of energy is less polluted with CO2 than others, the long-term risks of nuclear power plants for our planet should not be “washed green.” The subject of nuclear power is a very suitable example to show that the debate on the subject of greenwashing is not an easy one. Where does greenwashing begin and where does it end?

Task Force for Sustainability
The subject is now being pursued very seriously at the political and regulatory level. A report by the meta-supervisory authority (International Organization of Securities Commissions), identified three recurring problem areas after reviewing the initiatives of individual supervisory authorities and market participants: First, the divergent activities of various regulatory authorities, especially in the area of ​​disclosure obligations, second, the lack of common definitions of sustainable activities, and third, greenwashing as a challenge for investor protection.

IOSCO wants to deal with these defined problem areas in depth and is setting up a sustainability task force for this purpose. This should also facilitate the coordination of relevant regulatory and supervisory approaches, create transparency and comparability of ESG data, examine the methods and governance of credit and ESG rating agencies and analyze the risks of greenwashing.

Awareness creates value
Integrity and transparency are particularly important in the economic and financial sector, because the leverage is great here! Anyone who works in customer service knows that building trust is extremely important. Trust is conveyed through the competent transport of values. And awareness creates value. According to a survey by the VKI (Verein für Konsumenteninformation in Austria) on the subject of “Seals and Greenwashing” on the occasion of the World Ecolabel Day, awareness-raising is perceived as an opportunity to give consumers the appropriate tools for this discussion. The survey showed that consumers want more “tested” products - because it means certified sustainability. This role is passed on to legislators and independent NGOs. In any case, the topic of greenwashing is exciting and probably will cause many more discussions and that's a good thing.

Original contribution in german: Guest commentary Dr. Susanne Lederer-Pabst: Geld-Magazin_Februar/2021