"Understanding the Hidden Risks of False Eco-Friendly Claims in Business and Fashion"
Published: 2024-09-13In today’s fast-changing world, many people want to leave a better planet for future generations. But the journey to true environmental care often hits bumps because of tricky practices. Some companies make false claims about their green efforts. These lies can be small or very big.
Companies do greenwashing by making their eco-friendly actions look bigger than they are. For example, a company might say a product is “eco-friendly” because it uses recycled packaging. But the product itself might still harm the environment. Another trick is to highlight one green feature while hiding other harmful parts.
John Moutsopoulos, a partner at Mills Oakley, talks about the growing risks of greenwashing. The Australian Securities and Investments Commission (ASIC) is now watching these claims more closely. They have made nearly 50 regulatory interventions and given big penalties. Moutsopoulos advises fund managers to check their greenwashing risk strategies. He warns of possible class actions and stresses the need for clear public claims. Australia’s changing sustainability rules may affect views on ESG (Environmental, Social, and Governance) integration. Fund managers need to meet sustainability expectations while following strict rules.
The rise of generative AI tools in business brings new risks, including greenwashing. These tools can help with work but also bring dangers, especially if misused by employees. Key concerns include unreliable AI outputs, data privacy breaches, bias, intellectual property issues, cybersecurity threats, and environmental impacts. Canada doesn’t have AI-specific laws yet, but existing rules on data protection, intellectual property, and anti-discrimination still apply. Businesses should create internal AI policies to manage these risks and prepare for future rules. These policies should focus on human oversight, data privacy, bias reduction, intellectual property checks, cybersecurity, and ESG goals.
People need to know about greenwashing because it can hurt real efforts to promote sustainability. When companies lie about their green efforts, they trick consumers and make it hard for honest businesses. This can make the public doubt all sustainability claims, making it tough for consumers to make good choices.
Public opinion is important when it comes to greenwashing. If consumers believe a company is truly green, they are more likely to buy from that company. But if they find out the company is lying, it can cause a big backlash. For example, when Volkswagen’s emissions scandal was exposed, it hurt the company’s reputation and caused big financial losses.
The fashion industry also faces greenwashing issues. Brands like H&M have been criticized for their “Conscious” collections. While these collections claim to use sustainable materials, critics say fast fashion is still unsustainable. This has led to more scrutiny and calls for more honesty in the industry.
By learning how greenwashing works and its dangers, consumers can better understand sustainability claims. Demanding honesty and responsibility from businesses ensures that efforts to create a sustainable future are not ruined by lies.
https://www.investordaily.com.au/superannuation/55817-super-funds-and-managers-face-tougher-greenwashing-standards-as-asic-intensifies-action