Human activities are producing too many greenhouse gas emissions (such as CO2 and methane) in Africa, causing physical and chemical changes in the land, the atmosphere, and the ocean as well as more unexpected climatic variations like famine, violent thunderstorms, and higher temperatures.
Due to the aggravation of these environmental issues, more stakeholders including investors, consumers, governments, and corporate clients are aware of the importance of taking environmental considerations into account, which puts more pressure on businesses to disclose information about their environmental performance and to produce environmentally friendly products.
To meet these expectations, businesses create and market green products to incorporate social and environmental concerns into their daily operations. Therefore, some companies are motivated to exaggerate or embellish their external communications regarding their environmental actions to generate a positive image when they become aware that their reputation, legitimacy, and image are at risk. In this way, these businesses pretend to be environmentally friendly or engage in good green communication, but what they do may differ from what they say. Thus, businesses engage in “greenwashing” when they mislead or deceive the public about their environmental practices or the environmental benefits of their products or services.
The term “greenwashing” is the practice of exaggerating an organization’s environmental efforts or using more resources to do so than are used to carry out environmentally responsible policies. This is an approach typically used by powerful entities to cover up their environmentally detrimental practices by claiming they are sustainable, eco-friendly, and low carbon to deceive people about climate action.
Greenwashing is often done through the use of eco-conscious buzzwords such as ‘environmentally friendly’, ‘reduced footprint’, ‘green’, and ‘sustainable’ to convince the public that the relevant product or practice is more natural, wholesome, or free of toxins than that of competitors, or that the organization involved is doing more for the environment or sustainability than it is.
Companies that are mostly responsible for climate change and environmental damage in Africa like fossil fuel companies, airlines, and car brands are misleading the public about their sustainability by investing and employing misleading labels or advertising campaigns to create the impression that they are at the forefront of a rapidly transitioning to low-carbon energy and putting a climate-friendly face in front of the public without transforming their existing business models, which seek to maximize profits and delay climate action.
They are increasingly using social media to target younger audiences, including paying social media influencers to depict themselves as being environmentally conscious. These advertisements are an issue because they give a false impression of the company’s overall operations and the effects they do on the environment. The prevalence of greenwashing has increased rapidly in recent years; more and more firms have been combining poor environmental performance with positive communication about environmental performance.
Greenwashing can have a significant negative impact on stakeholders’ trust in environmentally friendly businesses and products, making them hesitant to reward those businesses that go above and beyond in this area. This in turn heightens the incentives for businesses to engage in environmentally harmful activity, which has been demonstrated to produce negative externalities and hence have a significant impact on societal welfare. Additionally, it threatens the effectiveness of genuine environmental efforts as well as the global shift to a sustainable economy.
Understanding the drivers of greenwashing is crucial for managers, regulators, and NGOs who want to put policies into place or take action to reduce its prevalence. This will help them decide how to most effectively combat them. They can, to an extent, eliminate greenwashing by improving the transparency of firm environmental performance, facilitating and improving knowledge about greenwashing, and effectively aligning intra-firm structures, processes, and incentives. When combined, they can offer a serious strategy for preventing greenwashing and assisting stakeholders and businesses to stand out from the competition.
