Will retailers and brands pay a steep price for greenwashing?

Photo: Getty Images/Petmal
Jul 15, 2021

Environmentalism was already on the rise before the novel coronavirus pandemic, with more retailers taking public, environmentally conscious stances. A recent study indicates that since the pandemic, however, consumers are even more driven by environmental concerns and retailers will take a hit if they ignore the phenomenon.

Seventy-two percent of respondents to a survey by research firm GWI said, as of July 2020, that sustainability was more important to them because of COVID-19, Inc. reports. Thirty-nine percent listed a poor environmental record as one of their top purchasing concerns and it was one of the top three factors determining customer behavior. A study by IBM found 60 percent saying that they would change shopping habits to reduce environmental impact. More than 70 percent said they would pay a premium for brands that are sustainable and environmentally responsible.

The article suggests that retailers can beef up their environmental bona fides with customers by:

  • Joining one of the many organizations dedicated to addressing environmental and corporate responsibility issues;
  • Making the management of environmental goals a responsibility for a board member, committee or appropriate associate(s);
  • Attending virtual or physical events pertaining to environmental issues.

It is not so clear, however, that pandemic-era shopping trends have been in keeping with customers’ avowed dedication to environmentalism.

At the start of the pandemic, concerns over potential transmission of the virus via contact with a contaminated surface (which were later proven mostly unwarranted) and the desire for customers to get in and out of stores as quickly as possible led to a proliferation of pre-packaged goods in grocery stores. Single-use plastic bags, which had been banned in many U.S. municipalities, also experienced a resurgence in use with some cities suspending plastic bag taxes.

The number of shipping boxes consumed by customers likewise expanded dramatically as customers were pushed to use e-commerce at an unprecedented rate beginning in March of 2020.

Surveys also indicate that customers are growing suspicious of retailers’ attempts to brand themselves as eco-conscious and skeptical about retailers making good on their environmental commitments.

DISCUSSION QUESTIONS: Do you think that most retailers are engaged in good faith efforts to reduce their environmental impact, or is greenwashing commonplace? What are the most effective ways for retailers and consumer-direct brands to run more ecologically friendly operations?

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10 Comments on "Will retailers and brands pay a steep price for greenwashing?"

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Bob Phibbs

I saw a post yesterday on LI from a supply trade magazine asking if many people outside of the industry cared about sustainability. I don’t doubt people say on an internet survey they care but this anger at pride-washing, green-washing, and the rest seems fueled by a few. Anyone who argues about greenwashing and still uses online services like Blue Apron, Amazon, or the rest has a disconnect. I’m not sure educating them will build sales. Use less energy, recycle at the corporate level, and lead by example – not PR. That’s my advice.

Shep Hyken

Cause marketing, and in this case the cause is the environment, seems to be more important than ever. Many retailers (and brand manufacturers) make “green” commitments. For some customers, this is a big reason why they choose to do business with them. Start by educating the customer and show how the brand or retailer is making impact. That’s a good start.

Jeff Weidauer

Saying that sustainability is important is not the same thing as taking action. Few consumers will pay more for a “greener” product simply because it’s green. Nor will most hold accountable those companies that don’t walk the sustainability talk.

Ron Margulis

Quick answer to the first question is that the retailers I know are sincere in their green efforts, whether that’s reducing their carbon footprint or dozens of other activities.

On the second question, technology has a dramatic impact on reducing waste in the supply chain. Millions of tons of food and other unsold items are sent to landfills every year. By using AI to support consumer analytics, retailers can more accurately sync supply with demand. But that’s just part of the challenge. We consumers throw away more products, particularly food, than retailers, restaurants and suppliers combined. So there needs to be a dramatic adjustment to packaging sizes that lessens the likelihood of the product spoiling before being used. And the retailers, restaurants and suppliers (and others!) need to do a better job educating consumers on portion size and even things like composting.

Venky Ramesh

I don’t think anyone is looking at environment in a holistic manner. Different functions within organizations are looking at sustainability in their own silos. As a result, there has been a lot of progress that has been made towards sustainable sourcing, green manufacturing, and reusable packaging but, in the end, all that is wasted in the last-mile shipment. For retailers and brands to run more ecologically friendly operations, I think they need to come together as an ecosystem to look at it from earth’s point of view (if that makes sense), rather than as individual companies or functions. It will be always good if they can align people, planet and profit objectives.

Keith Anderson

There are legitimate initiatives at both retailers and brands, but greenwashing largely prevails. Decarbonizing commerce is increasingly the highest “environmental” priority, but nothing happening in retail or CPG today is at the pace or scale required to align with industry or society-level targets.

The real work needs to involve the entire supply chain and logistics network. What is produced and how, and how those goods ultimately flow (or circulate) between producers, retailers, and consumers has massive implications for the industry’s impact, and I think consensus is building that more accountability is needed upstream. The industry’s energy, heating and cooling, and transportation systems need to be prioritized.

Technical solutions already exist, as do consumer-accepted (if not preferred) alternatives for many cases. But the economics can be challenging, if only because they require significant capital expenditure and process re-architecture.

I’ve often noted that the only thing that seems to motivate retailers more than their own consumers is what their competition is doing. I’d love to see more competition on this front.

Neil Saunders

Most retailers are committed to becoming more sustainable and many of the efforts they engage in are genuine. The issue is that sustainability policies are often partial and sometimes retailers will act in unsustainable ways out of a drive for growth or the necessity to reduce costs. That is one of the reasons consumers can be skeptical. However looked at positively: taking some steps is better than doing nothing at all. It is also the case that what customers say and do are very contradictory. In surveys, consumers will say that sustainability is important to them, but many do not follow through on these views when determining what, where and how to purchase.

Melissa Minkow

Many retailers have put sustainability goals on their priorities list, but they don’t address the how of getting them accomplished. I would love to see more retailers hire the right people to actually create solutions to become more sustainable at a material level.

The supply chain and waste generation have been the main focuses of sustainability conversations, but there is plenty of room for pursuing energy conservation in the e-commerce arena. Innovation to make digital aspects more sustainable would be an effective way to advance this movement.

James Tenser
Many retailers talk the talk when it comes to environmental responsibility. Far fewer walk the walk. The best way to turn sincere intent into meaningful action is to measure the impact of initiatives and publish the results: If a retailer reduces shrink by adopting inventory optimization practices, that certainly improves their profits, but how much waste and energy use is eliminated in the process? If a retailer re-designs its private-label packaging to eliminate use of non-recyclable plastics, what is the net impact in terms of carbon, landfill space, and impact on the oceans? If a big box retailer installs photovoltaics on all its store rooftops, how many kilowatt hours of electricity would it generate? How much can air conditioning costs be trimmed when the panels cast shade on the buildings? If a huge digital retailer 😉 advances a proactive program to collect and recycle corrugated shipping cartons, how many millions of trees can be saved? In the absence of facts about their outcome, these stories are “greenwashing.” When their impact is measured, indexed and shared,… Read more »
Craig Sundstrom

“I don’t mind risk, I just don’t want to lose money…” is frequently cited as an example of the doublethink that plagues investors; “I’m for ‘being Green’, but not if it involves any extra cost or inconvenience” is the analogous doublethink that plagues consumers, and by extension companies that are trying to serve them.
(And yes there likely is cost/inconvenience: if eco-friendly ideas didn’t involve that they’d already be in place).

So how do we change this? Recognizing the tradeoffs involved is a necessary step … not doing so simply leads to the Greenwashing we’re trying to get away from; and in many cases, technological change or process improvement can help. The question really is are these things — education and innovation — best accomplished by retailers?

"Use less energy, recycle at the corporate level, and lead by example - not PR."

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