Do Greenwashing Claims Destroy Reputations? 4 Examples and the Outcomes

Corporations account for the majority of carbon emissions. Therefore, they have the most considerable responsibility for fixing the planet. Goals hit managerial desks, and questionable results arise. How frequently do companies receive greenwashing claims because they don’t understand the weight of their environmental commitment or invest enough time and energy into solving the problem? Let’s see a few famous examples and how they impacted the bottom lines.

An Introduction to Greenwashing

Almost every company is making some environmental commitment. It can be environmental, social, and governance (ESG) objectives or corporate social responsibility (CSR) promises. Administrative staff can give convincing speeches to stakeholders and post documents on their websites for consumers to see how dedicated they are to having a less negative impact on the planet. However, these don’t always pan out or have good intentions backing them.

Greenwashing happens when companies make these promises and fail to hold themselves accountable or use deceptive tactics to convince customers they’re achieving their objectives when they are far from improving eco-conscious metrics. Usually, greenwashing behaviors intentionally cover up unethical, environmentally destructive business practices while attempting to monetize on customer ignorance because they would instead purchase from a company that tries to take care of the planet.

Greenwashing manifests in several ways, and the end goal of greenwashing claims is to remind companies of their responsibilities to the planet. Usually, this results in a loss in revenue because customer loyalty goes down. Some environmentalists hope for this outcome, leaving more room for environmentally responsible companies to usurp them in sales and notoriety. Does this happen, or do greenwashing claims hold no long-term impact on the bottom lines?

1. McDonald’s and Straws in 2019

The mega-giant McDonald’s attempted to replace their plastic straws with paper-based alternatives in 2019. They were supposed to be recyclable but weren’t because their thickness prevented them from processing. It highlights how companies make cheap replacements that appear eco-friendly without performing research or committing to a long-term effort.

Experts question the value of straw campaigns anyway because while they are a waste concern, food and beverage companies have more pressing concerns like food waste or transporting out-of-season produce with more of a carbon footprint and adverse environmental impact. 

Companies attach to consumers with straw campaigns because they’re attacking what customers know — easy, small, and the least financially straining change they can make in a company to look greener.

2. IKEA’s Illegal Logging in 2021

An environmental nonprofit called Earthsight exposed IKEA for illegal logging behaviors connected to Russian forests in 2021. Questionable clear-cutting practices that impacted biodiversity were some of the primary concerns, but underneath the apparent unfortunate forestry practices were confusing certifications.

Federal governments do not regulate most third-party green seals of approval. Instead, companies and customers choose to trust these experts based in good faith. The Forest Stewardship Council is one of those organizations, and they gave their certification for this illegally gotten wood, making companies and customers question the meaning behind their approval and if they care about the environment. 

Their justification was that they outsourced their logging audits, and they were misguided by the Russian auditors who reported to the parent company in Germany. However, IKEA nor the FSC provided meaningful responses to the handling of their internal standardization practices.

3. Shell’s Social Media Gaslighting in 2020

Oil and gas companies are a willful contributor to environmental degradation. However, Shell had the gall to post a Twitter poll placing customers responsible for fixing the planet. In the survey, they asked customers what they were willing to do to reduce personal emissions — suggesting Shell is aware of environmental action but choosing to displace it. 

Politicians and social media advocates cried out at this gaslighting, requesting Shell turn the tables back on them on how they intend to fix their adverse impact. They must act quickly to conjure proof of their efforts, too. European court orders are forcing them to meet specific climate targets by 2030, and who knows how long they will put off starting these projects.

4. Apple’s Mining Lawsuit in 2022

Apple touts its high environmental standards, admitting to the massive 17 megatons of carbon emissions they produce from iPhones alone. They claim to encourage repairs over new purchases, but their in-house repairs have a steep charge that almost enables new purchases. A few other efforts, like removing charging cables and bricks from new phones, reduced some e-waste. But, Apple still participates in shady waste practices that have a deep-rooted connection to environmental racism. 

In 2022, a lawsuit unfurled because children were mining materials like cobalt for Apple in the Congo. The class-action suit was dropped because the judge cited there were too many contingencies to place total blame on tech giants. However, Apple did not change its blueprints to avoid cobalt or other materials often associated with exploitative labor practices. They escaped legal action and disguised a lack of care for ethical labor and environmentally abusive material extraction for reduced Lightning cables in packaging.

So, How Does it Affect Bottom Lines?

Customers are more willing to call out companies than ever, especially with the high response rate of social media discourse. The rise in awareness can shake up a company’s reputation as trending media news spreads across all platforms. However, much like the news cycle, the tarnished image doesn’t last in customers’ minds for long.

Though most customers claim to care about a company’s environmental commitment, supporting only when they prove to execute effectively only goes so far. A business that already has built a fanbase of loyal customers will hold their attention and business, even after greenwashing claims. Customers default back to their previous, esteemed assumptions about a company’s image when making future purchasing decisions.

However, this is mostly for major companies. Small- to medium-sized businesses are at higher risk because they do not have the business resilience that Fortune 500s do.

Do Greenwashing Claims Have an Impact?

Regarding profits, greenwashing claims do little to impact a business negatively. Corporations rely on customers to revert to their pre-greenwashing visages, and it’s usually a safe bet. 

However, what greenwashing claims do best is raise environmental awareness and corporate skepticism. Regardless of how much it impacts bottom lines, continued callouts will change some company behaviors, which must happen to heal the planet — and that’s better than nothing.