The travel and tourism sector can reasonably claim parental responsibility for the concept of greenwashing. Initially, the concept was coined by New York environmentalist Jay Westerveld, in a 1986 essay, to describe the hotel industry’s practice of placing notices in bedrooms promoting the reuse of towels to “save the environment”. As Westerveld pointed out, hotels made little or no effort to reduce water or energy consumption but encouraging the reuse of towels and linen saved costs. This “environmentally conscientious” but ineffective approach was described as greenwashing. There appear to be fewer “A” cards in hotel rooms now, but we are encouraged to put our towels back on the rack and they won’t be changed – experience tells us that they likely will.
Switzerland-based RepRisk committed to “delivering the transparency that drives better decisions”, pointed out in July 2022 that “Greenwashing misleads consumers and stakeholders to view a company’s environmental footprint in a more positive light.” Greenwashing carries ESG risks “such as criticism of an advertising campaign deceiving consumers on environmental impacts, research findings revealing that a company is overstating the impact of an initiative, or coverage of company actions in direct contrast to climate commitments.”
Research published in the Harvard Business Review in July 2022 showed “that when companies overcommit and/or do not deliver on promised socially responsible initiatives, they damage their relationships with their customers.” That affects “the bottom line.” Market leaders in travel and tourism and in other sectors have understood the risk and moved to minimise it by not making false claims. Industry leaders have understood the risk and are being more careful about the claims they make.
In September 2021, I posted here about the “plethora of labels and certification schemes as businesses and destinations seek market advantage. Greenwashing is rife in the sector.” Greenwashing is identified in UK broadsheet newspapers as particularly acute in carbon offsetting, and consumers resist buying them. In a front-page lead in 2020, the Daily Telegraph warned that “Consumers trying to offset their emissions risk being deceived in a “Wild West” unregulated carbon market…” In November 2019, the Financial Times carried an article headlined Carbon offset gold rush is distracting us from climate change.”
Businesses are being much more careful about the claims they make. Gucci no longer claims that it has become “entirely carbon neutral”. Ikea is not using offsets and easyJet has moved away from offsets relying instead on sustainable aviation fuel, more fuel-efficient planes and carbon capture.
The regulators may now be about to catch up. They are talking about regulation, but doubtless, the greenwashers will press to water down the regulations. Writing in The Guardian this month, Patrick Greenfield expressed it well: “the marketing meets the science.” Hopefully, the science will prevail.
In February, the UK’s Advertising Standards Authority (ASA) updated its environment guidance on carbon neutral and net zero claims in advertising. The ASA now requires that businesses “avoid using unqualified carbon neutral, net zero or similar claims” and “ensure that they include accurate information about whether (and the degree to which) they are actively reducing carbon emissions or are basing claims on offsetting, to ensure that consumers do not wrongly assume that products or their manufacture generate no or few emissions.” Claims based on offsetting are now required to “comply with the usual standards of evidence for objective claims set out in this guidance, and marketers should provide information about the offsetting scheme they are using.” The ASA has issued this month detailed advice on travel marketing. The Competition and Markets Authority may be given powers to impose direct civil penalties on companies making misleading environmental claims.
The European Parliament voted earlier this month in favour of a ban on companies claiming that their products are ‘carbon neutral’. But the Parliament stopped short of banning future performance claims even when they misleadingly involve using carbon credits to compensate for emissions rather than actual emissions reductions. Carbon Market Watch recognises that the “Parliament’s amendment is an improvement upon the Commission’s “Empowering Consumers” proposal, it is still insufficient to prevent corporations from claiming climate leadership while continuing to pollute with impunity, as outlined in the recent Corporate Climate Responsibility Monitor.
Regulators are rarely, very rarely, able to regulate quickly enough to assert and protect the public interest and there is always the risk of regulatory capture.