Green brand of companies and greenwashing under sustainable development Goals

Coffee labelled as “eco-friendly” can attract a premium, with consumers led to believe it tastes better, according to new research from Sweden. The researchers, from the University of Gavle and the University…

When social responsibility – in small businesses and corporate social responsibility (CSR) in larger businesses – is implemented correctly, it’s no longer 'static' or just 'philanthropic' as referred to in the past. It’s also no longer a stand-alone form of 'cause-related marketing' or 'green marketing'. Instead, CSR is now multileveled and includes 'active implementation' of initiatives, to tackle the world’s most wicked challenges, at the centre of the business model (Munro, 2020a).

Amidst the challenges of COVID-19, we are witnessing an evolution of social responsibility and CSR (Carroll, 2021). In this context, the Sustainable Development Goals (SDGs) provide a realistic approach toward this dimension and a way to navigate societies through and beyond the COVID-19 pandemic (van Zanten & van Tulder, 2020). COVID-19 therefore provides an 'opportunity' for corporates (and business managers) to lead the way during COVID-19 lockdowns and setbacks, and continue to implement the SDGs at varying levels of scale, and as part of their CSR strategy.

The UN 2015 launch of the SDGs, and their inclusion in CSR strategy soon after, helped bed down a new movement in social responsibility. This paved the way for what I call 'active' implementation of CSR initiatives (Munro, 2020b) through adapting SIs or social and environmental initiatives within a United Nations SDG framework (Munro 2018). In this context, SIs are defined as:

'the micro "social and community initiatives" (or larger projects) an organisation adopts and supports in an ongoing and sustainable fashion and relates to the "needs" of the society and the community surrounding the organisation’s geographical location and market areas'. (Munro, 2013b, p. 73).

The development of SIs (and social and environmental projects) under each of the categories for the 17 SDGs was originally seen as the ticket to achieving the SDG agenda within CSR strategy. As a result, SIs of this nature have been increasingly embedded in overall business strategy in the last five years and are increasingly placed at the core of business operations. Correct implementation of the SDGs is therefore 'active' (and throughout company operations), rather than 'static' (or 'one-off'). This has helped move away from past strategy such as 'cause-related' and 'green marketing' (sometimes also referred to as 'greenwashing'). Therefore, initiatives are no longer 'tacked on' to CSR strategy and instead are at the core of the company’s business model.

The irony in this argument suggests that the movement away from 'green marketing' (or 'greenwashing') toward 'active' implementation of social and environmental SIs, through SDG implementation of these initiatives, may have instead witnessed a movement away from 'greenwashing' toward a form of 'SDG washing'. (Munro, 2020c).

If it’s allowed to continue, 'SDG washing' will decrease the credibility of the goals over time. The repercussions of this will be enormous

To determine the likelihood of the movement from 'greenwashing' to 'SDG washing', I examine briefly prominent definitions in the literature. Firstly, 'green marketing':

'Green or Environmental Marketing consists of all activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants, such that the satisfaction of these needs and wants occurs, with minimal detrimental impact on the natural environment. [Polonsky 1994b, 2]. This definition incorporates much of the traditional components of the marketing definition, that is "All activities designed to generate and facilitate any exchanges intended to satisfy human needs or wants" [Stanton and Futrell 1987]... The above definition also includes the protection of the natural environment, by attempting to minimize the detrimental impact this exchange has on the environment... thus green marketing should look at minimizing environmental harm, not necessarily eliminating it.' (cited in Polonsky, 1994).

The effects of 'green marketing' suggested in this definition are for a much broader debate. The point of this article, however, is to highlight the use of the terms 'green marketing' and 'greenwashing', and to note their use interchangeably in media and general literature. Using the terms interchangeably is an incorrect assumption, as the definition for 'greenwashing' is obviously a very different term:

'Greenwashing is the dissemination of false or incomplete information by an organisation to present an environmentally responsible public image.' (Furlow, 2010, p. 22).

Therefore, while 'green marketing' is pushing the green or environmental aspects of a product, 'greenwashing' is the false or incomplete presentation of this type of information, and the 'Greenwashing Index' was developed to monitor environmental claims used by manufacturers (Miller, 2008) and prevent overuse and misuse of 'green' claims.

This leads to the suggestion that there may also be a risk of 'embracing' the SDGs at 'face-value' without 'actively implementing' them. At the time of writing my book CSR for Purpose, Shared Value and Deep Transformation: The New Responsibility I noted that, 'SDG washing' (was increasingly) reported in the academic literature without being defined, therefore I provide the following definition: ' "SDG washing" is embracing the SDGs by listing social and environmental initiatives (SIs) under SDG categories without actively implementing them with purpose and intention, and therefore at the heart of the business model (Munro, 2020d).

During my research in this topic area, I noted that various issues regarding SDG implementation had the potential to become mainstream. I therefore wrote about these findings:

'Concerns have arisen, such as the thought that SDGs may be used as PR or marketing vehicles, and come to pass as “greenwashing” or, in this case, “SDG washing” (Nieuwenkamp, 2017) or become just a set of norms, as they are not legalised or compulsory (Eccles, 2015). For this reason, encouraging “genuine” commitment and efficient and fair enforcement of the SDGs, alongside measurement mechanisms (Kim, 2018) that are easily accessible and standardised across nations and countries is necessary.' (Munro, 2020c, p. 86).

It is clear that if 'SDG washing' continues to occur, it will 'greatly decrease the credibility of the goals over time' (Munro, 2020c, p. 85). For this reason, it is 'vitally important to measure the impact of initiatives (SIs) introduced to fit each SDG category and label' and this will ultimately 'assist with funding SDG implementation at a much faster rate'. (Munro, 2020c, p. 85).

Following further research I noted additional reports, such as the Ethical Corporation whom revealed a large majority of companies announced their engagement in SDGs 'but less than 10% had measurable targets on their contribution to the SDGs' (Ethical Corporation, 2018). Other research such as the report by PwC and CSR Europe (2018), outlines various risks and opportunities and recommends focusing on improving impact through collaboration to achieve targets by 2030. (as cited in Munro, 2020c, p. 87).

To conclude, I mention several tools to assist in implementation and measurement of the SDGs in chapter 3 of my my book, and emphasise, that if the SDGs were to become just a 'set of norms', as they are not legalised or compulsory, this will mean that adoption of the SDGs is dependent on voluntary commitment. 'If the exercise or task is voluntary, the level of reporting tends to reflect this, leaving the impact unknown, with no measurable targets' (Munro, 2020c, p.98). This means researchers and business commentators should not only have concerns on the failure of measuring SDG uptake and their impact – there are also concerns regarding the use of SDGs as a public relations and marketing vehicle, suggesting the risk of 'SDG washing'. I then relate this to a similar argument in the literature, regarding the uptake of CSR discretionary activities in the past and therefore issues like 'green marketing' and 'greenwashing' and the forward movement toward ESG accountability:

'The concern surrounding “SDG washing” as mentioned previously makes measuring the impact of the SDGs extremely important for corporates and investors to pursue. The Global Goals challenge corporates, enterprises, and investors to understand and manage all their effects on the communities where they reside. This also includes the effects that will enable and determine progress toward the SDGs. It is suggested that the Global Goals will also provide a common ground for previously siloed activities (Impact Management Project, 2018). Measuring this activity is relevant alongside ESG risk management, which many companies (are) already (or beginning to) assess.'

(Munro, 2020c, p. 99)

Measurement mechanisms (therefore) need to be easily accessible (to companies, NGOs and all organisations implementing the SDGs) and they need to be standardised across nations and countries. All these topics require further (academic) research and are considered emerging research opportunities for scholars in this area (see chapter 3 of my book, which lists these opportunities).

Further research is required to determine fully my proposal, that 'greenwashing' has been replaced by 'SDG washing'. In the interim, it is an extremely good way to bring attention to the risks of 'SDG washing', and create awareness of it, in an attempt to solve this issue and eliminate its practice. One certainty however is, if it’s allowed to continue, 'SDG washing' will decrease the credibility of the goals over time. The repercussions of this will be enormous.

My research on this to date suggests, we need to encourage 'genuine' commitment from organisations, alongside the development of efficient and fair enforcement of the SDGs and the development of standardised measurement mechanisms.

References:

Carroll, A. (2021). Corporate social responsibility (CSR) and the COVID-19 pandemic: organizational and managerial implications, Journal of Strategy and Management, https://doi.org/10.1108/JSMA-07-2021-0145

Furlow, N., (2010) Greenwashing in the new millennium, The Journal of Applied Business and Economics, 10(6), 22–25.

Miller, S. (2008). Watchdogs to raise red flags over green marketing practices. Brandweek, 49(1), 11.

Munro, V. (2013b). Stakeholder understanding of corporate social responsibility (CSR) in emerging markets with a focus on Middle East, Africa (MEA) and Asia. Journal of Global Policy and Governance, 2(1), 59–77.

Munro, V. (2020a), "Introduction", CSR for Purpose, Shared Value and Deep Transformation, Emerald Publishing Limited (UK), pp. 1-14. https://doi.org/10.1108/978-1-80043-035-820200003

Munro, V. (2020b), "The Future of CSR and the New Ecosystem for CSR 4.0", CSR for Purpose, Shared Value and Deep Transformation, Emerald Publishing Limited (UK), Chapter 6, pp. 203-229. https://doi.org/10.1108/978-1-80043-035-820200009

Munro, V. (2020c), "The Universal Sustainable Development Goals for Purpose and Change", CSR for Purpose, Shared Value and Deep Transformation, Emerald Publishing Limited (UK), Chapter 3, pp. 85-117. https://doi.org/10.1108/978-1-80043-035-820200006

Munro, V. (2020d). CSR for Purpose, Shared Value and Deep Transformation: The New Responsibility, Emerald Publishing Limited (UK). https://books.emeraldinsight.com/page/detail/CSR-for-Purpose-Shared-Value-and-Deep-TransformationCSR-for-Purpose,-Shared-Value-and-Deep-Transformation/?k=9781800430365

https://books.emeraldinsight.com/page/detail/CSR-for-Purpose-Shared-Val…

Munro, V. (2018). Changing the Boundaries of Expectations: MNE Uptake of Universal Principles and Global Goals. In S. A. Hipsher (Ed.), Examining the Private Sector's Role in Wealth Creation and Poverty Reduction. Hershey, PA: IGI Global.

Polonsky, M (1994), An Introduction To Green Marketing, Electronic Green Journal, 1(2), https://escholarship.org/uc/item/49n325b7 DOI: 10.5070/G31210177

United Nations Substantiable Development Goals, The 17 SDGs https://sdgs.un.org/goals

van Zanten, J.A., van Tulder, R. (2020) Beyond COVID-19: Applying “SDG logics” for resilient transformations. J Int Bus Policy 3, 451–464. https://doi.org/10.1057/s42214-020-00076-4

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