What Is Greenwashing and How To Avoid it When Investing

Greenwashing is a term that has been around for a few decades now, but it seems to be more prevalent than ever before.

You might have seen those commercials for laundry detergent or dish soap where they try to make you think that their product is better for the environment because it’s “eco-friendly.”

The fact is that many of these products are not any better for the environment than their traditional counterparts.

So, what is greenwashing?  How can you avoid it when investing in environmentally-friendly products?  This article will help answer those questions.

How To Know When Greenwashing Is Happening

Greenwashing is the act of making a false claim about the environmental benefits of a product, service, or company. But how can you tell if it’s happening?

Here are a few key ways to tell.

Look for Vague or Inaccurate Claims

See if the company makes an exaggerated claim about its product or service.

For example, a company might claim that its product is “eco-friendly” without providing any specifics.

Or they might make an exaggerated claim, such as saying their product is “carbon neutral” when it only offsets a small amount of carbon dioxide.

Look For Companies That Make A Lot Of Environmental Noise

See if the company makes bold promises while providing minimal or no support for its claims. Look for companies that make a lot of noise about their environmental efforts but don’t have much track record.

For example, they might have a flashy website or ad campaign, but there’s no evidence that they’re doing anything to reduce their environmental impact.

Check The “Eco-Friendly” Symbols

Be wary of companies that make broad, sweeping statements about being “green” without providing any specifics. Greenwashing often relies on symbols or images that create an impression of environmental friendliness without conveying any factual information.

For example, a company might use a lot of green in their branding even though the product has nothing to do with the environment.

How To Avoid Greenwashing

As many companies adopt green initiatives, it can be difficult to know which ones are genuinely committed to sustainability and which ones are just engaging in greenwashing.

Here are a few tips for avoiding greenwashing when investing:

  • Do your research. When considering investing in a company, take the time to research its environmental policies and practices. Look for independent verification of their claims, such as third-party certification.
  • Be skeptical of overblown claims. If a company claims to be completely green or carbon-neutral, that may be a red flag. Many companies are working towards these goals, but few have achieved them.
  • Watch out for greenwashing vocabulary. Some standard greenwashing terms include “natural,” “super green,” and “eco-friendly.” These terms are often used without any real meaning, so it’s essential to look beyond the language and into the company’s actual practices.

Also read: How to choose sustainable products online

Greenwashing In Summary

To make sure that your investments align with your values, it’s essential to be aware of what greenwashing is and how to avoid it. By being skeptical of vague or inaccurate claims and researching before investing, you can feel confident that your money is going towards sustainable businesses. You can help ensure that your investment dollars support companies genuinely committed to sustainability by following these tips.