Green communication can improve a firm’s reputation and performance, regardless of their genuine green conduct. This book investigates the greenwashing phenomenon and maps how firms mislead consumers by not delivering on their environmental promises.
Lucia Gatti is an assistant professor at the Department of Economics and management, University of Trento
Ludovico Giacomo Conti is a PhD candidate, Faculty of Communication, Culture and Society, University of Italian Switzerland (USI), Lugano, Switzerland
Peter Seele is a professor at the Faculty of Communication, Culture and Society, University of Italian Switzerland (USI), Lugano, Switzerland
From Chapter 1: Introduction to greenwashing (p.3)
Greenwashing — How it all started: not washing towels in the hotel and the historical evolution of the “green and business” discourse
“We’ll destroy the environment, but make sure you reuse your towel”, wrote the activist Jay Westerveld ironically in his now famous 1986 essay titled “It all comes out in the greenwash”, where the term greenwashing was mentioned for the very first time (Johnson, 2022). At that time, the American environmentalist and field biologist was in Samoa studying tooth-billed pigeons when he stopped off in a resort to surf in Fiji. In his hotel room, he found a card with the following message:
“Save Our Planet: every day, millions of gallons of water are used to wash towels that have only been used once. You make the choice: a towel on the rack means “I will use again”. A towel on the floor means “Please replace”. Thank you for helping us conserve the Earth’s vital resources”.
The card was decorated with the three green arrows of the recycling symbol. Westerveld noted the irony of that message, considering the hotel was focused on a building expansion at the time, with little regard for the surrounding natural environment.
In an interview conducted by Motavalli in 2011 for the Daily Finance, Westerveld explained that the word green was taken by the Green Party in Germany, which used to mention the term in the context of its work preserving old buildings (instead of building new ones) and stopping forest destruction. “Then, the word greenwashing just came to me”, said Westerveld. “It seemed really logical, pretty simple, kind of like whitewashing”.
At the end of the 90s, the term greenwashing gained popularity among activist groups and environmentalists thanks to Greer and Bruno’s book, Greenwash: The Reality Behind Corporate Environmentalism (Greer & Bruno, 1996). The book provided an overview of the damaging effects of transnational corporations (TNCs) actual behaviour, claiming that TNCs are the primary creators of dirty, unsustainable technologies.
Before the 2000s, however, greenwashing references and, more in general, the debate around the impact of business on our natural environment remained a concern primarily for environmental activists and NGOs on the left. While civil society was trying to boost the issue and create awareness, business companies have been silent about the topic for a long time.
From Chapter 2: Academic accounts of greenwashing (p. 42-45)
Why do companies engage on greenwashing?
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Current market opportunities may also stimulate a company to greenwash. As global warming concerns continue to escalate, customers have shown an increased environmental consciousness. Even if genuine corporate green initiatives are certainly a means to attract eco-conscious consumers, greenwashing as well may also attract new segments. This explains why greenwashing has become a common practice for companies seeking to capitalise on market opportunities.
Finally, according to Yang et al. (2020), a company may engage in greenwashing due to competitive pressure. Pushed by the fear of being left behind, a firm may decide to overcommunicate its environmental credentials.
[...]
Individual drivers are related to individual cognitive tendencies characterising managers and decision-makers responsible for green communication. Research suggests that narrow decision framing, hyperbolic intertemporal discounting, and optimistic bias lead to greater involvement in greenwashing. Narrow decision framing refers to the inclination to make decisions in isolation, i.e., without considering the broader context. Decision-makers might focus on promoting the environmental friendliness of a product or the firm itself without adequately considering the future requirements for implementing green initiatives. A decision-maker may also decide to prioritise short-term gains from greenwashing without weighing the potential long-term negative effects on corporate image or reputation in case of a greenwashing accusation. This relates to another cognitive tendency that could lead to greenwashing, namely hyperbolic intertemporal discounting.
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Firm responses to external drivers are influenced and mediated by various organisational-level factors, such as firm characteristics, incentive structures, ethical climate, effectiveness of intra-firm communication, and organisational inertia. Firm characteristics influence the strategic choice related to green marketing and greenwashing, as well as the degree to which a company perceives external pressure to greenwash. They include variables such as company size, industry, internal capabilities and resources, and lifecycle stage. For example, B2C firms tend to experience higher levels of consumer pressure to portray themselves as environmentally friendly than B2B companies.
From Chapter 3: All sorts of *washings: a comprehensive overview (p. 54 – 55)
AI-washing
Definition
AI-washing defines the accusation of the practice of misleadingly claiming, through unfounded and hollow assertions, to be using or being powered by AI technology – while lacking or not fulfilling the necessary requirements to be defined as AI-powered – to, among others, promote a positive image, increase financial returns, and secure funding.AI-washing cases
Engineer.ai is a tech company founded in 2012 that claimed to have developed a platform based on an “AI-powered software assembly line that breaks projects into small building blocks of re-usable features that are customised by elastic human capacity from around the world” (Azevedo, 2018), which permitted non-tech-geeks to create almost an entire mobile app with minimal efforts and within an hour (Woollacott, 2023). This alleged innovation facilitated the accrual of approximately $30 million in investments by the end of 2018 (Azevedo, 2018). However, following a report by the Wall Street Journal by Purnell and Olson (2019), it was later revealed that the assertion was overstated since behind the alleged AI, there were Indian software engineers. Although Engineer.ai had started to “work on AI-based automation”, they were still “at least a year away from being used as the foundation for the advertised service” (Smolaks, 2019). The report also underlined how the tech company lacked machine learning and data science experts, which questioned how the company could have implemented the advertised feature, and a Google Cache of the tech company’s webpage dated 2019 highlighted the company’s reliance on 75’000 external contractors (Smolaks, 2019).
The above-mentioned example represents a case study of the growing practice of AI-washing – which is now worrying the U.S. Federal Trade and Commission (FTC) authorities (Vanderford, 2023). Analogous to the concept of greenwashing in the context of sustainable products, companies have started to capitalise on hype for AI technology and consumers’ willingness to buy or invest in AI-powered technologies by misleadingly claiming to key stakeholders, through unfounded assertions, their utilisation or reliance on AI technology (Dey, 2023; Vanderford, 2023) – despite lacking or not fulfilling the necessary requirements to be defined as AI-powered (Prisznyák, 2023). Such a practice is carried out primarily to increase short-term sales, differentiate oneself from competitors (Dey, 2023), and secure funding – as evidenced by a study by MMC Ventures indicating that start-ups that mention AI in their description raise 15% more funding than those who do not (Ram, 2019). In addition, engaging in AI-washing can be done out of ignorance of the meaning of AI or, more strategically, to stall and buy time for implementing the necessary changes in one’s technology (Rosencrance, 2022).
Like in greenwashing, the fallout from AI-washed claims can be severe and long-lasting. Exposed deceptive practices can significantly damage a company’s reputation, resulting in diminished sales and a dearth of investments (Dey, 2023). Moreover, these adverse outcomes could ripple across the entire sector, creating a crisis of confidence in AI technology and trivialising its meaning (Rosencrance, 2022).
From Chapter 4: The washing machine and counting: outlook (p. 149)
The latest: greenwashing truthers, greenlash and greenhushing as part of the ongoing polarisation in society
This book’s final section outlines some of the latest trends primarily sourced from general media, given that there is no research literature yet. The two trends we explore in this chapter – greenwashing truthers and greenhushing ¬– are indicative of the broader societal polarisation, where the ends of the spectrum drift apart, and are characterised by a certain incommensurability.
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