Written by: Katrin Humal

Social media is widely seen as a great opportunity for marketing and brand management, stepping on the heels of the old-fashioned offline methods. Through online word-of-mouth (eWOM), the brand and its image could reach almost anyone... But what often gets overlooked is that just as good news travels fast on social media, so does bad news. It could even be claimed that due to the interconnectedness of people, nothing remains a secret anymore. That includes instances when a company is trying to pull on an environmentally friendly face that it does not really have – also known as greenwashing. This article looks at the possibilities of social media to help bring an end to greenwashing.

The power of online word-of-mouth

Several authors have drawn attention to the fact that social media works in favour of consumers rather than brands. According to Fournier and Avery (2011), the technologies of Web 2.0 were “created not to sell branded products, but to link people together in collective conversational webs”. It reversed the information asymmetry that had previously worked to the benefit of companies, enabling marketers to create whatever image they wanted to their brand (Christodoulides, 2009). As Kietzmann et al. (2011) note, corporate communication has been democratised.

eWOM is defined as “any positive or negative statement made by potential, actual, or former customers about a productor company, which is made available to a multitude of people and institutions via the Internet” (Hennig-Thurau et al., 2004, p. 39). According to Armelini and Villanueva (2009), WOM is nearly invincible in its power to influence and persuade. The immediateness and interactivity that is added to it online further increases that power (Armelini & Villanueva, 2009) so that it is generally agreed it has more influence than any other marketing communication (King et al., 2014).

However, eWOM might deliver different messages about the same thing, as well as convey messages that have been planted by self-interested companies, for instance fake reviews and discussions (King et al., 2014). Therefore it can be problematic for people to assess the credibility of the information. Regardless, according to a study by InSites Consulting, social network users regard other customers as the most reliable source of information for brands and products (Armelini & Villanueva, 2009).

Communicating sustainability

Lee, Oh and Kim (2013) explain that social media creates “coordinated effects of uncoordinated actions”, meaning that all sorts of contents are freely accessible, searchable and transformable to anyone on the Internet. Therefore it is easily possible to discover and reveal both responsible and irresponsible behaviour of companies, and the evidence of either follows companies through time and space (Lee, Oh & Kim, 2013). Fournier and Avery (2011) even go as far as to claim that thanks to Web 2.0, everything that can be exposed will be exposed.

Considering this, companies that have reasons to fear a negative reaction from stakeholders are more likely to hold back in social media, while socially responsible firms appear to be earlier adopters of social media and are able to reap more benefits from it (Lee, Oh and Kim, 2013). Similarly, Reilly and Hynan (2014) find that “green” firms are more active than “non-green” ones in social media in general, as well as in communicating sustainability in particular.

An example of what might happen if a company that does have things to be ashamed of decides to get active on social media is the McDonald’s Twitter campaign around the hashtag #McDStories, where instead of the intended positive stories about farmers, tweets about food poisoning, animal welfare and low labour standards started flooding in, resulting in the campaign to be pulled already in a few hours (Lyon & Montgomery, 2013).

Lee, Oh and Kim (2013) have noted that companies’ benefits from CSR activities depend on the awareness and favourable attribution of the stakeholders. They point that in general, awareness of companies’ CSR efforts is low among stakeholders, but at the same time their intense promotion easily leads to scepticism of the audience. Therefore the company faces the task of “maximising the awareness of the firms’ activities among the stakeholders, while minimising the scepticism” (Lee, Oh & Kim, 2013, p. 791). Here is where social media comes into play. Not only does it promise extensive coverage through interconnected networks, but also a decrease in companies just feeding information to consumers.

Reilly and Hynan (2014) suggest that corporate communication cannot be considered a proxy for actual sustainability performance, but can offer a look into what is valued by the company and its organisation culture. The authors point to an intriguing question: does a positive (green) corporate image reflect actual company performance or more effective organisational communication?

What is greenwashing?

Greenwashing broadly denotes “any communication that misleads people into adopting overly positive beliefs about an organization’s environmental performance, practices, or products” (Lyon & Montgomery, 2015, p. 224). Greenwashing has received relatively little attention so far in market research, even though it is widely evident that companies use environmentally friendly marketing in order to appeal to stakeholders (Lyon & Montgomery, 2015).

Reilly and Hynan (2014) illustrate that social media messages from actually green companies are much more concrete, highlighting their achievements in measurable numbers, while non-green companies remain fuzzy, using vague messages e.g. about “expanding involvement” and “better understanding”. This falls into the category of “fluffy language” of Gillespie’s (2008) “ten signs of greenwash”.

Another sign is “irrelevant claims” (Gillespie, 2008), which could also include serving an activity as extra green effort, while it is in fact just fulfilling the law. For instance, VF Corp (including brands such as Vans, Lee, The North Face and Timberland) spent a page in its CSR report, describing its factory compliance efforts and inspections by company auditors of factories in 62 countries – while safe working conditions are legally required in most countries anyway. While deceiving a part of the stakeholders, another part becomes less favourable and more sceptical about the company’s sustainability image (Reilly & Hynan, 2014).

Research of deceptive advertising in general has shown that not only does it lead to consumer distrust, but the following negative effects can spread from the specific company to advertising more broadly, and the distrust from consumers can have considerable spillover effects to other persons and situations (Lyon & Montgomery, 2015). As for greenwashing in particular, it can have adverse effects on consumers’ trust towards green products, as well as on the confidence of investors in green firms, thus eroding both the consumer market for green products and services and the green investing capital market (Delmas & Burbano, 2011).

According to the International Institute for Sustainable Development (IISD, 2013), in the North American market the environment almost always loses if choosing an environmentally friendly alternative includes a trade-off in other product attributes such as price, (perceived) quality, convenience and availability. Thus, it is no wonder that making false or misleading claims about greenness becomes attractive to many companies. As Gillespie (2008) has put it, “/.../ you want to buy green, you expect companies to be green and as a result they just cannot quite resist the temptation to tell you that they are, often, unfortunately, without good reason or justification for doing so” (p. 80).

What is more, comparison to competition or industry average might make companies more likely to engage in green communication, even if they are not really green (Delmas & Burbano, 2011). In fact, surveys by TerraChoice have found that the vast majority of products commit at least one of the “Seven Sins of Greenwashing” – for example, in 2010, at least one of the sins was committed by 95% of the home- and family-related products that were under scrutiny (Underwriters Laboratories, 2013).

Greenwashing can sabotage the whole environmental movement – since consumers have such low trust in green information from companies, the latter have little incentive to choose green over non- green products, which means that the motive for the genuinely green companies to provide green products and services will disappear (Gillespie, 2008).

A solution: third-party endorsement and social media

Consumer trust in the product can be increased through objective endorsement or a recognised and respected trademark of a third party (Gillespie, 2008). So one way of reducing scepticism and confusion of consumers is for companies to use eco-labelling and certifications (Lyon & Montgomery, 2013; 2015). According to IISD (2013), the bodies which assign eco-labels should be properly accredited and, so to say, above suspicion – their finances, evaluation criteria, standard setting and monitoring procedures must be transparent and clear to consumers. This is where social media and eWOM can be of help, enabling to spread information between consumers.

To avoid conflicts of interest, manufacturers should not be allowed to operate labelling schemes (IISD, 2013). However, Gillespie (2008) brings out “imaginary friends”, i.e. labels that look like third- party endorsements, while in fact they are just made up, as another sign of greenwash. For instance, SC Johnson was supplying some of its own products with the Greenlist label, which led to lawsuits with customers who argued that the label on the products did not reveal that it was based on internal processes only, as opposed to third-party certification (Bardelline, 2011). It has been found that labels that are perceived as greenwash might even undermine the value of otherwise trusted ecolabels when used simultaneously (Sirieix et al., 2013).

Also, certifiers should keep monitoring the companies that have received certification so that if they no longer fulfil the criteria, the certification would be withdrawn (IISD, 2013). An example is when it turned out that IKEA’s subsidiary Swedwood is cutting down old-growth forest in Northern Russia – while holding a certification from the internationally renowned Forest Stewardship Council (FSC) (Pagge, 2012). When this became public, the certification was temporarily suspended (IKEA, 2014a), although after a later audit the suspension was withdrawn again (IKEA, 2014b).

It has been noted as a problem that sustainability/CSR metrics often are not standardized; in addition, they may rely on complex technology measures that are difficult to interpret (Reilly, 2009). However, in the age of Web 2.0 and social media, this issue becomes lesser, because there is a lot of information available and it is easy for consumers to seek help from other consumers, as well as activist groups and NGOs that have better knowledge of the matter (examples include websites such as goodguide.com and ewg.org). It is also easier for consumers and activists to unite and put pressure on companies, as well as organisations who accredit companies (examples include websites like stopgreenwash.org and fsc-watch.com).

Lastly, news about suspicious companies and cases travels fast and far, so in addition to companies, accreditation organisations are also under scrutiny of the consumers and have to work harder to maintain their credibility. Considering the spillover effects mentioned previously, an accreditation organisation risks damaging the image of all companies that carry its label, giving the companies an extra incentive to stop greenwashing and behave themselves. Lee, Oh and Kim (2013) are likely correct to conclude that as the power of social media continues to increase, it drives companies towards genuinely being more responsible. In turn, this will lead to less scepticism among consumers in the future.

References

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