Introduction
In 2008, a commercial commissioned by the Malaysia Palm Oil Council was aired across the globe, featuring a voiceover which stated:
“Malaysia Palm Oil - its trees give life and help our planet breath and give home to hundreds of species of flora and fauna. Malaysia Palm Oil - a gift from nature, a gift for life”.
As an example of greenwashing, this advertisement faced widespread outcry. While it was quickly retracted, this was not before thousands of people viewed this palm oil brand as "helping the planet breath".
Greenwashing is defined as “expressions of environmentalist concerns especially as a cover for products, policies, or activities”. In response to an overwhelming public shift toward ethical forms of consumption, major corporations such as Chevron, the Italian oil corporation Eni, Shell, and SC Johnson jumped on the bandwagon of "green" marketing. BlackRock Chief Investment Officer Tariq Fancy refers to this as a “marketing hype”, where major corporations are promoting their products under the guise of being "clean" and "sustainable". Consumers in turn believe they are using their buying power in the name of social and environmental good, even when purchasing products such as palm oil, crude gas, or fast fashion. Largely unregulated, terms like "sustainable" and "green" are yet to be defined by courts or the Federal Trade Commission (FTC) in the United States.
The First Complaint
In advertising campaigns, Chevron Corporation has flaunted its investments in "clean tech" industries and has pledged “ever-cleaner energy”. By doing so, the oil giant green-washes its products in the hopes that consumers will purchase from them rather than their competition. This is despite the company's contributions to greenhouse gas emissions and global pollution; according to Greenpeace, Chevron is the second most polluting company in the world, having emitted more than 43.34 billion tons of carbon dioxide since 1965.
In early 2021, a formal complaint was filed with the Federal Trade Commission in the United States by three climate change nonprofit organsiations Global Witness, Greenpeace USA, and Earthworks just three days after Chevron announced their new "higher returns, lower carbon" strategy. Josh Eisenfeld, a spokesperson for the environmental nonprofit Earthworks states, "they're trying to capitalise on a market in a predatory way. They're doing that to maintain their social license, they're doing that to attract investors and keep the ones they have".
The complaint also argued that Chevron is “consistently misrepresenting its image to appear climate-friendly and racial justice-oriented while its business operations overwhelmingly rely on climate-polluting fossil fuels, which disproportionately harm communities of colour”.
Backed by the 1992 FTC "Green Guides" - a set of principles produced to protect consumers from greenwashing, this complaint is the first to criticise a major fossil fuel corporation for unethical advertising. Lodging the complaint with the Federal Trade Commission, rather than suing through the court system, opened a dialogue into the regulation of advertisement and targeted marketing.
Future
The FTC, which seats five appointed members, is currently split in a two-to-two deadlock between Republicans and Democrats with one seat currently open. The Biden administration, running on a platform of clean energy, upheld its promise by canceling the construction of the Keystone Pipeline which ran across Native American land. Biden’s appointment to the last chair of the FTC will determine the future of regulated and "green" advertising, as well as set the tone for his promise of sustainable, clean energy.
What can Consumers do?
Greenwashing was largely in response to public pressure to spend money in ways deemed "ethical" or ‘"sustainable’" that began in the early 2010s. In response, sustainable investment options more than doubled in 2020, reaching US$ 51 billion (around GBP 37 billion), according to research firm Morningstar.
Morningstar's Director of Investment Education states, "It means a lot to people that their money is making an impact". Funds are now available that exclude certain industries like tobacco, weapons, oil, gas, or farming. Therefore, consumers are advised to focus instead on industries like renewable energy or water.