It’s time for a Greenwash tax

May 18, 2022 | Blog Post | 0 comments

As consumers, we’ve started to take the practice of greenwashing for granted. The sheer volume of ‘eco-friendly’, ‘low emissions’ and ‘100% recyclable’ products on our shelves is as confusing as it is overwhelming. 

Yet stories of companies painting green facades with their eco-claims have become just as ubiquitous; a fifth of adults stopped using a brand in the last year due to claims of greenwashing. 

In 2021, the Central Markets Authority has released its Green Claims Code, aimed at protecting consumers from misleading environmental claims. If we really want to stop companies from deceiving consumers and using the environment as a marketing gimmick, then the government should implement a muscular levy on those companies that are found guilty of using greenwashing in their advertising. 

By doing so, we can empower consumers to make informed, ecologically-conscious consumer decisions, whilst sending a clear signal to companies who may be tempted to cash in on a green ‘bump’ to their sales. 

Yet another report has recently been published about the acceleration of climate change. UK Met Office researchers say that there’s around a fifty-fifty chance that the world will warm by more than 1.5C over the next five years. Yet we hardly need reports to illustrate the damage of climate change, we simply need to cast an eye across the world. Drastic heatwaves are now hitting India and Pakistan, California has suffered its driest year on record, and an ice shelf the size of Rome has collapsed in Antarctica. 

People care about climate change, and people care about making environmentally conscious decisions. A study by L.E.K Consulting reveals that half of UK consumers would be willing to pay extra for sustainable products from retailers, whilst six in 10 consumers say they would avoid specific materials from being used in their products. 

Fundamentally, consumers wish to make environmentally-friendly decisions. However, they can only do so when presented with the right information. The phenomenon of ‘greenwashing’ the practice of conveying false information or a misleading impression of a product being green, when in fact it isn’t, has become a staple tactic in marketing companies. 

This is a cynical ploy. Companies actively exploit consumers’ good intentions to continue with ‘business as usual’. This subtle deception is not only dishonest, it is cementing environmentally harmful practices. 

Fast fashion outlets are notoriously bad offenders. In fact, a staggering 10,000 items of clothing are sent to landfills every 5 minutes.  So, for example, when H&M launched their “clothes donation scheme”, they collected 1,000 tonnes of clothes in the first week. That would take 12 years to recycle, yet would be produced by H&M in 24 hours.  

McDonald’s launched their ‘eco-friendly’ straws that couldn’t, in fact, be recycled. Ryanair claimed to be “Europe’s lowest emission airline” despite being in the EU’s top 10 emitter list. BP changed its name to Beyond Petroleum and added solar panels to its gas stations whilst continuing to spend more than 96% of its annual spend on oil and gas. 

This practice not only misleads the well-meaning public into acting unsustainably. It can breed suspicion towards those brands that have actually put in the hard yards to create genuinely sustainable business models. 

It is clear, accurate, and honest information that will enable consumers to make the right decisions. Imagine if we wanted to try and lose weight without having any information on the calories and content of our food? We’re trying to make the right consumer decisions towards the environment, but doing so has become a guessing game. 

The UK has launched its ‘crackdown’ on greenwashing, but I can’t help but feel that these measures are somewhat toothless. Following the 2021 findings that 40% of green claims made online could be misleading to consumers, The UK’s Competition and Markets (CMA) authority has recommended a number of actions for the government to consider, Yet definitions of ‘greenwashing’ are yet to be legally defined. 

The CMA has already filed complaints against Pepsi Lipton, Coca-Cola-owned Innocent Smoothies, and Oatly. Yet all the companies had to do was edit their marketing campaigns. For these multinationals, simply editing their campaign would be seen as nothing more than a marketing cost that can be swallowed. 

Boris Johnson has blustered about Britain’s position as one of the world’s ‘Green Leaders’. Yet when companies like Pepsi and Coca-Cola make misleading claims about the sustainability of their products, they receive nothing more than an angry letter and a demand for clarity. Given the scale of the crisis we face, that certainly feels like a light touch. 

In order to build trust and transparency for consumers, we should implement a one-off tax for those companies who are found to be breaking those greenwashing guidelines. If a company is found to break the six principles of the Green Claims Code, it should be taxed as a percentage of the total sales of that product advertised. That raised tax money could be used to invest in Britain’s renewable power infrastructure, rewilding projects and green initiatives. 

Greenwashing is not simply a cheeky marketing sleight of hand. It is a deceitful practice that forces consumers to unwillingly go against their ethics. It stops truly sustainable companies from being heard in the noise. Ultimately, it allows the world’s biggest polluters to put on a green mask whilst continuing with a ‘business as usual’. 

If the government really wants to be seen as a Green Leader, a ‘Greenwash Tax’ is a sensible place to start.

By Tom Macpherson

Published: 18 May 2022 

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