In spite of (mostly) well-intentioned actions to conduct their business in a more sustainable fashion, corporates have been spooked by consumer protection watchdogs claiming that established brands and large enterprises are guilty of “Greenwashing“ (and its unsavoury cousins, “Greenbotching” and “Greenwishing” ).
“Greenwashing” is the exaggeration or overselling of environmentally friendly or climate mitigation actions meant to appeal to the consumer without any actual contribution to the environment. “Greenbotching” is the backlash against companies that try to go green but do this badly, and “Greenwishing” is the charge against corporates for thinking big but underachieving. All the greenbashing has even led to “Greenhushing” – a deliberate attempt by corporates to under-communicate or under report progress towards ESG objectives. At the heart of it, Greenwashing and its derivative practices need to be stamped out, as they enable corporates to:
Greenwishing could include, for instance, the use of plastic bottles for making a product, which removes plastic from the usual recycling loop. It could include claims of using sustainable wood or cotton, which in fact was produced in a way which denuded forests or eroded land. Even carbon mitigation measures such as carbon credits and carbon capture and storage (CCS) are not immune to the charge of greenwashing.
Europe has had a headstart in trying to eradicate greenwashing and the list of commercial practices which are considered unfair in all circumstances, in Annex I of Directive 2005/29/EC, is already extended to four practices associated with greenwashing:
As a comparison, Australia prohibits misleading and deceptive statements and conduct, and enforces disclosure obligations. For instance, the Australian Competition and Consumer Commission (ACCC) released, on 2 March 2023, its findings from an internet sweep for misleading 'green' claims, which found that concerning claims were most prevalent in the food and drink, cosmetic and clothing sectors. ACCC raised concerns with the use of vague, unscientific terms such as “green”, “kind to the planet”, “eco-friendly” and “sustainable” which imply that the product is environmentally beneficial. Greenwashing investigations in Australia are already underway and all indications point to upcoming economy-wide and sector-specific regulatory guidance to address greenwashing concerns.
Singapore has not seen a surge in greenwashing claims but clearly corporates are watching the space carefully and taking precautions to avert any such claims. The Singapore Consumer Protection (Fair Trading) Act 2003 (CPFTA) protects consumers against false or misleading claims, including those related to greenwashing. The CPFTA is administered by the Competition and Consumer Commission of Singapore (CCCS) and CCCS will likely be the responsible agency having oversight of any greenwashing concerns.
CCCS is likely still evaluating the empirical impact of misleading sustainability claims (i.e. greenwashing) on consumers and competition . To date there are no specific regulations on greenwashing and neither CCCS nor the Consumers Association of Singapore has not received any specific complaint of greenwashing). However, the regulators are likely monitoring developments on greenwashing, and will develop measures against the practice if necessary.
For corporates seeking a blueprint to avert greenwashing and concomitant claims, EU’s proposed new law on green claims (Green Claims Directive) is instructive. The Green Claims Directive seeks to:
A conscientious effort to undertake business in a way which minimises environmental impact, and careful adherence to the principles set out in the above guidelines where possible should put a corporate in good standing with consumers and avert any taint of greenwashing.