What is Greenwashing? And Why it Matters in Manufacturing

Sustainable. Eco-friendly. Green. Clean. As consumers, we see these labels splashed across the products and companies we interact with every day. And it’s popping up more and more as companies look for ways to slow climate change and empower their customers to do the same. 

What started out as a “back-to-nature” movement in the 70s has evolved into something much bigger, and much smarter, as climate consciousness in the commercial world has grown. If the early days were all about going “green,” the world today is focused on finding the “greenest” solutions possible, no matter the cost.

With Green Power Comes Great Responsibility 

As many as 55% of Americans are willing to pay higher prices for eco-friendly products and boycott a company’s less-green competitors. This buying power is undeniable, and companies are more incentivized than ever to improve their practices. Even the smallest changes to a product or service, like swapping plastic straws for paper, can buy a business a significant amount of consumer loyalty.

However, when one U.S. food giant rolled out their new “eco-friendly” paper straws in 2019, they were met with backlash from customers and activist groups because the straws were not recyclable. Even though paper is widely viewed as a more sustainable option than plastic, it was clear that this tactic was more for customer perception and financial gain than out of care for the environment. This is a classic example of greenwashing.

Greenwashing Defined

Greenwashing can be defined as superficial climate action, usually by a company, that’s more self-serving than actually beneficial to the environment. In these cases, companies will either overstate or falsely represent their impact on the environment.

The Cost of Greenwashing

There’s a long history of companies that have greenwashed. And whether their intentions were to mislead or not, unfortunately, doesn’t matter. Consumers have lost trust. Today 53% of Americans never or rarely believe “green” claims put forth by businesses.

The Rise of Buyer Regulation

While the Federal Trade Commission has established recommendations in their Green Guides around sustainability, recyclability, and carbon footprint claims, there’s a wide variance in how these subjects are talked about. The general lack of regulation and trusted authority on “green” products make it difficult for consumers to navigate and interpret product claims, especially when it comes to understanding the role individual supply chain partners play.

All of this is beginning to change with the rise of ESG, a new era of standardized reporting for environmental, social, and governance—three factors that give a comprehensive picture of a company’s impact on communities worldwide and the climate, and also the ability to maintain it for years to come. These measures are reflected on one ESG scorecard that, in today’s global market, directly affects a company’s valuation and viability in the supply chain.

How to Avoid Greenwashing: Better Decisions Through Data

So how can companies, particularly those in manufacturing, show an honest account of their efforts to reduce their impact on the environment? One of the most effective ways is through data. 

Data gives proof that the energy-efficient equipment your company installed, your work to recover fluid from metalworking processes, and other improvements, are actually working to reduce your company’s footprint. And being able to show a 30% reduction in metal waste for example is data that speaks for itself. 

For many companies that we’ve worked with, having a third-party partner to help accurately track metrics like this and identify new opportunities to save energy and recover wasted resources has been key. Tracking this data can make a meaningful difference in manufacturing companies’ ESG scores and allows them to become stronger supply chain partners. 

Become a True Leader in Sustainability

A growing number of manufacturing companies today are taking measurable action toward a better planet by introducing smart manufacturing practices and by tapping into the circular economy. At Shapiro, we partner with companies worldwide to collect data and optimize processes to help make the planet better for everyone.

Ready to take your first steps toward true carbon neutrality? Connect with a Shapiro rep today so we can start making the planet better together.