Businesses worldwide have found themselves in a tricky situation. On the one hand, consumers, investors and regulators expect them to make serious commitments to environmental responsibility. On the other, greenwashing and allegations thereof have cast a shadow over many well-intentioned corporate initiatives and left many firms fearful of erring in this sensitive area.
The harmful effects of greenwashing are extensive. This deceptive practice takes management focus and valuable resources away from addressing real environmental challenges. Where a case is discovered and publicised, it damages customer loyalty to the affected brand and public confidence in business generally. It undermines the corporate social licence to operate and, more generally, poses legal, regulatory and financial risks.
Global clothing retailer Patagonia is well known for its commitment to sustainability, but even it has faced challenges