Greenwashing: What Is It and Why Do We Care?

June 7, 2024

Greenwashing in the food industry isn’t a new trend. The act has plagued the world for a long, long time. And as long as regulations fail to fight against these practices, the maladies incurred by greenwashing will continue.

But hold on - we need to take a quick step back to discuss what greenwashing is, and why everyone should take it seriously.

This isn’t just about the CPG industry. This isn’t just about our economy. It’s about living honestly and sustainably. It’s about being responsible and proactive to humanity.

What Exactly is Greenwashing?

“Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound. Greenwashing is considered an unsubstantiated claim to deceive consumers into believing that a company's products are environmentally friendly.”

Investopedia

The ramifications for such practices are, for lack of a better term, severe.

Much of this goes without saying, but let’s reflect on just a few of the detrimental effects of greenwashing that immediately come to mind:

  • Greenwashing poses a threat to our environment, which poses a threat to humanity (duh). The efforts put in place to encourage green living and sustainable development are directly undermined and attacked when companies engage in greenwashing.
  • Greenwashing impairs public perception. If sustainable practices are seen as a “hoax” or a “money-maker”, the public may gravitate toward a cheaper less green alternative. We’re fighting hard enough as it is to educate the masses on sustainability.
  • Greenwashing, if left unchecked, encourages businesses to lie about their practices. This is extremely dangerous. Not only is the environment being affected by unchecked, ungreen processes; but the potential for poor employee treatment and work conditions is also left unchecked.

Recent Events

We usually don’t write about specific CPGs and companies, but today is an exception. To look further into the dystrophic nature of greenwashing, we need real-world examples.

The controversy at Oatly is the big talk right now, so let’s dive into that.

***And please note that we’re just relaying what’s on the interwebs. We encourage you to come to your own conclusions.***

Oatly

The oat milk brand Oatly has been on blast recently for greenwashing. Now, some of the claims against Oatly are purported, or alleged. But many of these claims are backed up by reporting and research from Spruce Point Management. Let’s look at some of the claims:

Misreporting in terms of revenue: 

A CNBC piece mentions accounting allegations found in the Spruce Point report linked above. According to the report, Oatly overstated its revenue and gross margin. While this is more whitewashing than greenwashing, it shows dishonesty… which is not a good sign when a company makes claims about its environmental impact. Investors see a company that is green, sustainable, and profitable - so they invest… instead of investing in another more honest company that doesn’t lie about its practices.

Cherry-picking sustainability stats: 

Spruce Point believes that Oatly “cherry-picked” results found in their sustainability study. Oatly failed to show that its impact on water consumption is worse than dairy milk.

The Spruce Point report also states that Oatly “says 49% of its current climate impact comes from ingredients, with 73% of this ingredient impact tied to oats. It stands to reason that Oatly should be locating its facilities as close as possible to its oat supply. However, we find evidence that Oatly has not only located production facilities thousands of miles from its oat sources, but also massively overpaid and run wildly overbudget in its capital planning.”

Investor Choice: 

This part is a kind of a mess. Check out this Twitter thread (you’re in for a trip). Basically, one of Oatly’s investors is accused of unsustainable practices and deforestation in the Amazon. We encourage you to go through these facts yourself and come to your own conclusion.

Sweeping Overall Environmental Impact Under the Rug: 

Through a FOIA request, Spruce Point found that Oatly’s production process generates a dangerous amount of wastewater. Another FOIA request showed that Oatly’s NJ location was inspected by local environmental health experts and cited for excessive trash dumping.

To Conclude...

It’s not difficult at all to find more examples of greenwashing.

You can easily find allegations against brand names such as Tide, Pepsi, BP, Shell, Star Bucks, Patagonia, Amazon, Nike, and many, many others.

As we become more environmentally conscious - more educated on the ethics of sustainability and corporate honesty - it becomes easier to spot the folks who actually care about their business practices, their employees, and the world.

Be honest. Care for others.

Be Well,

The Team here at Journey Foods

We’d love to hear from you!

If you have any questions or thoughts, throw them in the comments below.

You can also hit us up on Instagram, LinkedIn, or Twitter.

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