• Analysis and Studies
• What is Greenwashing?

Greenwashing in marketing refers to companies presenting product or service information in a way that makes consumers believe it is environmentally friendly. As people have become more aware of the way production impacts the environment, consumers have become more interested in sustainable brands. According to a sustainability report completed by Nielsen’s IQ, 73% of millennials are more likely to purchase a product if it is environmentally friendly and sustainable.

This move towards eco-friendly products has completely changed the direction of marketing. Customers still want products that work well, but now a product is considered sub-par if it’s not also doing its part to protect the environment. This shift in customer concern has shifted marketing strategies as well.

Many companies are working to change their production methods to become eco-friendlier, particularly as they realize more environmentally-friendly companies can perform better than their peers and enjoy a sustainability premium. When marketing messages accurately reflect how a company is working to protect the environment, it’s known as green marketing.

However, as a marketing strategy adopted by many companies worldwide, greenwashing can have serious implications on world trade. For instance, to name a few:

Market Distortion: Companies engaging in greenwashing may gain an unfair competitive advantage over genuinely sustainable businesses. This can distort global markets by incentivizing companies to prioritize the appearance of sustainability over actual environmental improvements.

Regulatory Response: To combat greenwashing, governments and regulatory bodies may implement stricter regulations and standards on environmental claims. These regulations can affect global trade as companies may need to comply with different standards in various markets, potentially leading to trade barriers and compliance costs.

Resource Allocation: Resources that could have been invested in genuinely sustainable practices may be diverted toward greenwashing efforts. This misallocation of resources can affect global trade by slowing down progress toward more sustainable production and consumption patterns.

Erosion of Trust: Over time, repeated instances of greenwashing can erode consumer trust in businesses, sustainability claims, and even government regulations. This loss of trust can have far-reaching consequences for global trade, as consumers may become skeptical of all environmental claims.