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What is greenwashing and how can companies avoid it?

‘Companies really need to be held accountable when they greenwash,’ expert says

When a company makes a claim about its environmental or social practices that is not true, that’s called greenwashing. Companies that do this are often seeking customer or investor support or approval, especially if they are under pressure to reduce emissions.

One example of greenwashing in the transportation industry is Volkswagen. The company advertised its vehicles as low-emission, eco-friendly vehicles when they were in fact violating Clean Air Act levels of nitrogen oxides, which are air pollutants that harm human health.  

The company sold approximately 590,000 model 2009 to 2016 vehicles equipped with devices designed to help the vehicles’ software “cheat on federal emissions tests,” according to the Environmental Protection Agency.

Some trucking companies may be using electric truck pilots as a way to “display some sort of green credential but not really to lay the foundation for broader scale implementation,” Tharsis Teoh, technical manager at the Smart Freight Centre, told FreightWaves. 

This could be considered greenwashing if the company is drawing a lot of attention to an EV pilot for five-plus years and isn’t doing much to reduce emissions companywide.

“Companies really need to be held accountable when they greenwash,” Maya van Rossum, founder of the Green Amendment For The Generations Movement, told FreightWaves. She said there are sometimes legal ramifications for misleading customers about sustainability claims, but it’s difficult when companies make general claims that are hard to prove false.

Clarifications in trucking to avoid greenwashing

Teoh said his opinion is that greenwashing in trucking “isn’t really severe,” but he prefaced the statement by saying it was just based on observations and not on industrywide data.

He said it’s typical that a vehicle may have “zero-emissions vehicle” or “100% electric refrigeration” displayed on the side of a battery electric truck or a truck using a battery instead of a generator tied to a diesel engine for refrigeration. Teoh said, “I doubt they get very far in misleading claims.” 

However, he said using the term “zero-emissions vehicle” for electric or fuel cell vehicles is inaccurate, “unless the upstream emissions to produce the electricity or hydrogen also do not produce emissions.”

Until the electricity grid runs on 100% renewable energy, more correct terms may be “zero tailpipe emissions vehicle” or “almost zero-emissions vehicle.”

Another area that needs greater clarification is biofuels. Teoh said companies need to be transparent about what kind of biofuels they use and what level of biofuel blend it is. The more biofuel there is mixed in with conventional fuel, the greater the emissions benefits. 

The greenhouse gas emissions of biofuel also vary greatly depending on the feedstocks used and where they were sourced from. Teoh said it’s important that trucking companies find out and disclose that specific information to their customers or the public.

How to avoid greenwashing

Some companies are greenwashing their sustainability efforts to mislead customers and investors. But others are making impactful environmental progress, and they don’t know how to communicate that progress to consumers without seeming to greenwash. 

Van Rossum said actions speak louder than words.

“If your company truly is dedicated to being a good actor with regards to the environment or other social issues, then take every step you can to live that commitment. It is fine to then share that information in your annual reports [and] websites, but it has to be genuine and true,” van Rossum said.

She said companies should not donate to nonprofits just to put it in their marketing materials. They should donate to organizations doing work the company believes in “because it is the right thing to do.”

Van Rossum said some things that could decrease the issue of greenwashing are:

  • If nonprofits refuse donations from environmentally damaging corporations.
  • If investors avoid backing those companies and make it clear that greenwashing or poor environmental practices are the reasons for their lack of financial support.
  • If consumers avoid purchasing products from companies that greenwash.

“Greenwashing is a tremendous abuse of the power companies have,” van Rossum said. “Companies need to be shunned, shamed and rejected when they engage in such behavior.”

Standardized emissions calculation frameworks could address some greenwashing issues in trucking “in theory,” Teoh said. Frameworks such as the Smart Freight Centre’s Global Logistics Emissions Council Framework have potential to estimate the impact of operations in a comparable way.

But Teoh said even if companies use a standardized framework, the emissions data calculated is usually only available in a sustainability report and not easily visible on their websites.

“Companies need to begin to make reporting the measured/calculated emissions the norm. Labels are easy, but [they] do not represent the actual state or even progress made,” Teoh said.

He also called on companies purchasing transport services to make emissions intensity of freight companies a “critical requirement in their contracts.” That would reduce the carbon emissions for every ton-mile of goods transported, and it would help the freight purchaser get access to their supply chain emissions (scope 3) data.

Click here for more FreightWaves articles by Alyssa Sporrer.

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Alyssa Sporrer

Alyssa is a staff writer at FreightWaves, covering sustainability news in the freight and supply chain industry, from low-carbon fuels to social sustainability, emissions & more. She graduated from Iowa State University with a double major in Marketing and Environmental Studies. She is passionate about all things environmental and enjoys outdoor activities such as skiing, ultimate frisbee, hiking, and soccer.