Sandra Ericson, APR, Executive Vice President, rbb Communications|Apr 8, 2024

As climate concerns continue to escalate, there is no shortage of conversation from emerging energy players now entering the market alongside traditional oil and gas companies, all recognizing both the imperative and financial benefits of throwing their hat into the renewable ring.  It’s no surprise the increase in dialogue comes with claims of greenwashing and speculation about the net climate impact of some of the efforts. The uncertainty and risk are leaving some brand managers in a quandary about how to communicate, even when environmental goals are legitimate and well-intended.  

Consider that a recent European Commission review found that 42 percent of green online claims from various business sectors were exaggerated, false or deceptive, potentially qualifying as unfair commercial practices. Similarly, a global review by the International Consumer Protection and Enforcement Network (ICPEN), found that 40 percent of the companies reviewed “appeared to be using tactics that could be considered misleading and therefore potentially break consumer law.” As noted by Columbia Business School Shivaram Rajgopal, “Greenwashing is rampant. With money to be made from environmental credentials … greenwashing has never been more of a temptation.” 

Understandably, this has created a high degree of distrust among consumers. A 2022 Harvard Business Review study found that customers are likely aware of gaps between a company’s stated environmental goals and the implementation of those goals. Further, it found that when companies fail to meet stated social responsibility goals – for any reason – customers perceive them to be greenwashing. And we know from other research that even minor decreases in customer satisfaction scores impact net earnings per share and return on investment.  

Of course, there are a thousand reasons that companies may fail to meet their goals, many beyond their control. So what’s a company to do when it wants to share legitimate climate goals but recognizes that progress toward those goals may be uneven along the way? 

Based on our experience, there are 5 key considerations that should be reviewed.  

1. What exactly does our unique customer care about? 

The company may have goals around reducing emissions but customers may be focused more on price reduction. They may support efforts to electrify a delivery fleet but not care about much solar power usage. Understanding your customers closely means knowing the nuances of their pain points and bettering the chance they’ll respond positively to your message.  

2. What exactly does our unique customer understand about green initiatives?  

What customers care about is directly related to what they understand. Communication about social responsibility efforts must be done in a way that the consumer can easily grasp the benefit to them. This isn’t about dumbing down policies so much as it is about using more effective communications tools, like video and infographics to cut through the clutter.  

3. How can we manage expectations around our initiatives?  

It’s not enough to put forward environmental goals alone. They need to be accompanied by plans as to how they will be met and the challenges that may impact those plans. Bringing consumers into the discussion about the difficulty associated with reaching goals will help mitigate any perception of failure down the line.  

4. What does success look like?  

We all know it is better to underpromise and over-deliver. For that reason, we may have internal, moon-shot goals that inspire performance but externally communicate goals that are more likely to be reached. There is no rule book that says a singular goal is required – there may be a continuum of success instead that accounts for the disruption of efforts.  

5. What is our capability reputation?  

The Harvard Business Review research suggests that a company with quality products and effective customer service could temporarily buffer any negative effects of greenwashing based on its capability reputation. This isn’t a finding to support greenwashing, of course. Rather, understanding capability reputation helps define whether or not a safety net for missed goals may exist.  

There are efforts underway to further codify environmental goals, making it more difficult to put forward greenwashing claims.  In early March, the SEC adopted the Climate-Related Disclosure Rule requiring large publicly traded companies to disclose climate action, greenhouse gas emissions, and the financial impacts of severe weather events, beginning in 2026.  For some, it doesn’t go far enough with the final regulations only including Scope 1 (the company’s direct GHG emissions) and Scope 2 (GHG emissions of their energy providers) but not Scope 3, which ensures climate credibility all along the supply chain. Some states like California, have taken it upon themselves to hold large companies accountable but are still being challenged in court. 

Even as regulatory and legislative solutions to greenwashing are put forward, it falls to communicators to draw a bright line between legitimate environmental efforts and those that exaggerate efforts. By incorporating our key considerations, the difference between the two will become ever more distinct, helping customers distinguish between real green and Astroturf.   


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