Avoiding the greenwashing trap: A guide for small businesses
Year after year, consumers become increasingly environmentally conscious, actively seeking brands and products that align with their personal values around sustainability. This shift has led to a surge in “green marketing,” where companies highlight their eco-friendly practices to attract customers. However, a fine line exists between genuine sustainability efforts and what’s commonly known as “greenwashing.”
What is Greenwashing?
It’s when a company or brand presents itself as environmentally friendly, without having sufficient practices or evidence to back it up. They will often spend more resources on marketing an eco-friendly image than actually implementing practices to reduce environmental impact. This can include vague or unsupported claims, as well as emphasising one small “green” initiative while ignoring larger, environmentally damaging practices or a supply chain that cancels out any goodness in the product itself.
A recent example I’ve seen is some laundry detergent sheets that are brilliant at reducing plastic packaging but on closer inspection contain palm oil which is a no from me. Had I not dug a little deeper, I would have felt ‘tricked’ into supporting an industry that I cannot.
Misleading customers in this way, or using ‘smoke and mirrors’ can not only damage a company’s credibility, but can also undermine the genuine efforts of sustainable brands, creating confusion about what true sustainability looks like.
What to look for
To avoid greenwashing, it’s essential to understand its common forms, including:
Vague claims: Using words like “eco-friendly,” “green,” or “sustainable” without clear definitions or supporting evidence.
Lack of certifications: Claiming environmental responsibility without credible third-party certifications or documentation.
Focusing on minor improvements: Highlighting a small eco-friendly feature while ignoring the larger environmental footprint of the company’s products or operations.
Irrelevant claims: Promoting “sustainable” qualities that have little impact on the environment, such as “CFC-free” labelling when CFCs are already banned.
The rise of greenwashing in Australia
In 2022, the Australian Competition and Consumer Commission (ACCC) examined 247 companies and found that 57% had made potentially misleading environmental claims. Common phrases like “100% plastic-free” or “kind to the planet” were used without specifics, leaving consumers unclear about what these claims actually mean. This vague language can be problematic, especially in a market where more than half of surveyed Australians express concern over the legitimacy of environmental claims.
The ACCC also found that consumers are increasingly sceptical of green claims, particularly from industries known for high environmental impact. Surveys reveal that Australians’ biggest concerns surround energy providers (72%), clothing and fashion brands (71%), and household cleaning brands (71%) - all industries that frequently market their products as eco-friendly but face scrutiny over genuine sustainability or their ingredients, labour or manufacturing practices.
Some recent examples in Australia
I don’t want to get into the weeds on this, but several notable Australian brands have been accused of greenwashing in recent years. Here are a few examples:
Coca-Cola Amatil
In 2021, Coca-Cola Amatil faced criticism for marketing its bottles as “100% recyclable.” Environmentalists pointed out that while the claim was technically accurate, it did not address the company’s significant role in contributing to plastic waste. Critics argued that recycling efforts alone were insufficient without a commitment to reducing plastic at the source.Woolworths
In 2023, Woolworths promoted its “sustainable” shopping bags, which were criticised for not being biodegradable and still contributing to plastic waste. Environmental groups saw this as misleading since the campaign suggested a higher level of environmental responsibility than the product itself delivered.Rip Curl
Came under fire after revelations that some of its “eco-friendly” clothing was manufactured in factories with poor environmental practices. This example underscores the need for brands to ensure that all aspects of their production and supply chain align with their eco-friendly image.
Intentionally misleading customers is the quickest way to lose trust
How small businesses can avoid greenwashing
Avoiding greenwashing is both a responsibility and an opportunity. If you are transparent and authentic, small businesses and brands can build trust and stand out in a crowded market. Here are some ideas to help ensure your marketing aligns with genuine sustainability efforts:
Be transparent and specific
Avoid vague claims. Instead of simply labelling products as “eco-friendly,” explain the specific steps you’re taking to reduce environmental impact. Whether it’s using sustainably sourced materials, offering recyclable or reusable packaging, or reducing waste, break down these details for your customers. Transparency builds credibility and demonstrates that your commitment to sustainability is genuine.
Provide evidence and certifications
Seek third-party certifications like Fair Trade, FSC (Forest Stewardship Council), or Carbon Neutral to validate your environmental claims. These certifications provide independent verification of your claims, adding credibility. Displaying these certifications on your website and packaging reassures customers that your sustainability claims are backed by an objective standard.
Educate your audience on sustainable choices
Use your social media, blog, or newsletter to share insights into your eco-friendly practices and why they matter. Educating customers on the importance of sustainability can strengthen your brand’s mission and build a supportive community around your business. When consumers understand the reasons behind your efforts, they’re more likely to appreciate and trust your brand.
Educate your audience on sustainable choices
Use your social media, blog, or newsletter to share insights into your eco-friendly practices and why they matter. Educating customers on the importance of sustainability can strengthen your brand’s mission and build a supportive community around your business. When consumers understand the reasons behind your efforts, they’re more likely to appreciate and trust your brand.
Be across your marketing
If you are using an agency, SMM or third-party to help with your marketing and promotion, don’t imagine there is plausible deniability - your customers won’t care and you won’t get a chance to explain. Work with your experts on building a marketing strategy that highlights your achievements, your journey and your plans.
Focus on continuous improvement, not perfection
This one is super important. Sustainability is a journey, and most consumers understand that. Instead of making sweeping claims, share your progress and the challenges you face along the way. Your customers and followers will appreciate honesty, and communicating your ongoing efforts demonstrates a long-term commitment to environmental responsibility. Most people want to work towards being better, so this journey you take them on will be relatable.
Engage in collaborative sustainability initiatives
Partner with reputable environmental organisations or participate in local initiatives to add legitimacy to your efforts. Consumers are more likely to support brands that actively contribute to their communities or the planet, rather than simply marketing green practices.
Building trust through certification and transparency
Third-party certifications are one of the most effective ways to build trust. Nearly 69% of Australians report feeling more confident about environmental claims when backed by a trusted certification mark. To maximise the value of certifications, the ACCC advises companies to:
Choose reputable certifications: Ensure that the certification body is well-regarded and unbiased.
Align with product characteristics: Make sure the certification accurately reflects the environmental attributes of the product or service.
Provide clear information: Explain the significance of the certification or direct customers to resources for further information.
Using certifications allows small businesses to differentiate themselves in a market increasingly sensitive to environmental issues. That said, some of these certifications come with an administrative and financial commitment that’s difficult for small or new businesses to justify.
The future of sustainable branding for small businesses
Greenwashing can harm a brand’s reputation, but it also presents an opportunity for businesses that are willing to lead with honesty and authenticity. Consumers today are increasingly selective about the brands they support, with many seeking out those that make genuine steps toward sustainability. For small businesses, this shift represents a chance to embrace sustainable practices, build transparency into your operations, and share your journey with customers.
Sustainable branding should not be just a marketing tactic, but a commitment to authentic values. Businesses that balance transparency with genuine eco-friendly practices are best positioned to build consumer trust and create lasting loyalty. Sustainable marketing isn’t only about attracting customers; it’s about fostering trust, establishing credibility, and contributing to a more sustainable future.
Even small steps taken genuinely can have a significant impact, both on the environment and on your business and brand’s success.
By understanding what greenwashing is, recognising its risks, and following guidelines set out by the government, small businesses can make a meaningful contribution to the environment, build a “greener” reputation and stand out from competitors.
I hope this has inspired you to look at your own sustainability and perhaps plan how to use it in your marketing - if done right, it’s a winner for you and your customers.
Want more? The ACCC has a fabulous and comprehensive draft guide that you can download here.
❤️ Hi I’m Erika ✌️
I’m a marketing specialist with a BA in Media and Comms, Masters of Marketing, Certificate in CX (Customer Experience) and 28 years marketing experience.
I’m well-placed to help you navigate the sometimes overwhelming world of marketing and social media. I work with you one-on-one or create fun and action-oriented workshops and webinars for groups, organisations and businesses.
Connect with me on social media for more tips or to start a conversation 👇
