Unmasking Greenwashing: Grow Your Store with Authentic Green E-commerce Practices!

Gabe · ‎08-29-2023

Introduction

CSR (Corporate Social Responsibility), CCR (Corporate Climate Responsibility), and other terms like "ethical shipping" are now the new buzzwords among startups, SMEs, or large corps, as well as among young (Gen-X and Z) consumer groups and online shoppers. We all know the hashtags like #circulareconomy, #wastenot, #upcycling, and #slowfashion!

Especially now, that BFCM is around the corner, we have a huge opportunity to really hone in the importance of strategies of increasing the sustainability of our stores and business. We know that global sales go up exponentially around the BFCM weekend and this also causes carbon emissions to go up exponentially. Carbon emissions around the BFCM weekend have been likened with the same amount of CO2 during the entire eruption of a volcano.

A simple example: The Instagram profile of the Austrian jewelry label Bruna, states "fine jewelry made responsibly". On Bruna's homepage, there's even a dedicated tab called "Our responsibility", where it says, "100% responsible gold and silver. We use recycled precious metals to minimize environmental impacts, while supporting artisanal communities.."

A linked sustainability report from Bruna says they want to have a "positive impact on our ecosystem" with the production of the jewelry. However, research by the Viennese magazine Fleisch found that these statements were not entirely true.

So in this article, I will try to figure out how we as retailers can incorporate more recycled and reused products and packaging into our business operations. A simple example could be to create an extra shipping rate called "recycled packaging" (or similar) and adding an extra $ or 2 to the rate. Data shows that customers are willing to pay a little more for "green shipping" or recycled packaging.

I will therefore be looking at the topic of greenwashing and how we can avoid it in our stores e.g., whether carbon offsetting is really a sustainable solution or not. Are there better solutions that can have a direct positive effect on our environment, such as the SirPlus store that resells rejected food? They salvage and resell discarded food products for lower prices. I would buy from them in a heartbeat! What about stores that resell discarded "fast fashion"? More on that below.

Some Concrete Examples

Online Shoppers are looking for that extra “feel-good factor” when shopping online. Simply "clicking and buying" is not enough anymore these days. If your store shows that you are socially and ethically engaged or that you manufacture and sell in an environmentally conscious way, committed to the environment, e.g., with some ethical shipping strategies, or an environmental badge like the ones from OneTreePlanted or Aspire Sustainability, then can you foster loyalty and increase AOV and CLV. Should you shout that out in your store and increase your sales with it? A win-win and no-brainer?

“I have high bounce rates in my store and was wondering if selling with the environment in mind could reduce my bounce rates and increase sales? "

Quick Stats

According to Forbes, data shows that the consumer is increasingly demanding sustainable products and shopping formats. The linked report reveals that 62% of Gen Z shoppers prefer to buy from sustainable brands, and a staggering 73% are willing to pay more for sustainable products. Moreover, Gen Z and Millennials are the most likely to make purchase decisions based on personal, social, and environmental values. The Canadian startup The Final Straw have designed their own reusable and innovative aluminum drinking straw in order to help reduce the "plastic straw in the ocean" problem.

More examples: Returns make up a large part of the global air-freight traffic, and so looking for ways how we can reduce returns or make our returns processes more efficient especially when it comes to dropshipping from China, is a huge step to not only make your store greener, but also increase your store’s customer satisfaction rates. An example is Retury, a small German startup that is offering sustainable returns solutions by directly connecting the returning customer directly with customers who want that same product, thus cutting out the many unnecessary carbon-emitting middlemen and routing of returned goods along very inefficient routes:

Potential Growth Strategies

“Ethical shipping” is therefore about the environmental impact of your shipping strategies and how you as a store owner can help reduce that impact. For example, is all packaging that use made of recycled material and do you send products bundled together as much as possible or in single packages? What are your package weights and sizes i.e., how much room do they take in the cargo freight? How much can you sell via Click & Collect? Sending goods in too large packages can unnecessarily pollute the environment.

Here are some strategies for ethical shipping:

Returns make up a large portion of the current air freight traffic. Reduce your order return rates proactively with better product descriptions or some AR (augmented reality) to better showcase the product.
Offer sustainable returns with EcoReturns.
Offer some carbon offsetting with EcoCart or Carbon Neutral Shipping.
Offer a sustainable or “green/recycled” packaging option in the checkout at a slightly increased shipping rate. We know from data that people are willing to pay a bit extra if they feel it’s for a good cause.
More tips on how to run a low-cost and sustainable store.

Navigating the Greenwashing Phenomenon and Safeguarding Authenticity

Do some online stores nowadays offer more “green talk” than “green walk”? Many stores and apps promise more “environmental protection” and “green sustainability” in their descriptions than they often deliver. In the following tips I will dive into this topic and show some ways we can offer “real sustainability” and “ethical shipping” in our stores whilst avoiding the “greenwashing” effect.

I will now address the important issue of greenwashing and how we can avoid it in our stores, such as whether or not carbon offsetting is really a sustainable solution. Are there better solutions out there that can have a direct positive impact on our environment, such as, SirPlus reselling discarded food? Can your Print-on-Demand store also have a menu tab like "Used Items for sale" or "Second-hand -> great value!" where you offer discarded items? This could increase the "feel-good factor" in the store and thus also increase the level of trust in the visitors to your store.

You’re also probably familiar with some products in online stores, like bathroom cleaners, promising to be more “eco-friendly" but at the same time showing signs that they are not, such as having very low prices? The reality is that selling eco-friendly products usually means the prices are higher due to the more complex and expensive eco-friendly manufacturing processes.

We know from studies, however, that online buyers are willing to pay a bit more for sustainably and fairly produced products due to the so-called “feel-good factor”. However, some companies may also artificially inflate their prices and slap “eco-friendly” labels on their products that are not actually as eco-friendly as they claim to be.

Chinchilla.pro is a store that sells sustainable and plastic-free products such as razors made with local beech wood. The store offers materials which are recyclable, washable or reusable, with a good longevity. Their Dryer Balls are made from New Zealand sheep's wool and are an excellent ecological alternative for harmful fabric softeners. These are placed in the dryer to reduce dryer time by up to 40% and "save electricity, time, money & CO2". Their natural dental floss refill pack is also plastic-free & 100% compostable. Online shoppers are now increasingly looking for exactly such products to eliminate plastic as much as possible from their daily lives.

And what about stores that resell second-hand, discarded "fast fashion"? Are they also part of a rapidly growing economic sector? Fast fashion giants like H&M or ZARA, for example, advertise on their websites that they are committed to CSR and human rights and do not allow child labor. Public interest in environmental awareness has thus increased in large markets like in Germany - and with it the demand for sustainable and ethically produced products.

Defining and Understanding Greenwashing

So do many online stores offer more "green talk" than "green walk" these days? Do they promise more "environmental protection" and "green sustainability" in their descriptions than they actually deliver?

"Greenwashing" is thus the term used to describe PR measures that companies use to burnish their CSR and CCR (corporate climate responsibility) image. They portray themselves as environmentally conscious and promote products as sustainable, even though they are usually not as they are portrayed. Online or supermarket shoppers are thus deliberately deceived in order to lure them into buying.

To be truly sustainable, companies usually have to incur high costs and a lot of effort, such as being certified with an environmental label like the Global Organic Textile Standard (GOTS) seal. In addition, governments and the EU are currently setting out specific requirements that will make it more difficult to engage in any type Greenwashing. Companies can't afford to do little for the environment these days and hence that's why many rely on greenwashing.

Legal Cases Against Greenwashers

The German drugstore chain DM was recently sued because it had advertised its own brands as "climate neutral" or "environmentally neutral". The chain is now no longer allowed to advertise the products in this way, the Karlsruhe Regional Court ruled at the end of July.

It said in its ruling that the promise of such a climate-neutral product could not be upheld and that the description "environmentally neutral" was misleading. The organization Deutsche Umwelthilfe (DUH) had filed a lawsuit against dm's misleading terms, and since May of last year, the organization has already filed suit against 21 other companies who have been found to “greenwash” their own products.

Want to see some more great example stores? See our blog on 15 Sustainable online stores on Shopify here.

The 7 Sins

The environmental group TerraChoice has a great infographic that classifies the different types of “greenwashing” into 7 deadly sins that are found in supermarkets and in online stores today. Another example was Volkswagen's diesel scandal, which would fall under deadly sin #6 below - so-called "fibbing". In 2015, automaker Volkswagen claimed that their diesel vehicles emitted fewer pollutants than gasoline vehicles. But in reality, they had rigged 11 million of the "Bluemotion" line of diesel engines with software that tricked the emissions tests. The vehicles allegedly emitted 40 times more pollutants than legally permitted.

So greenwashing is more common than you might think, wherever "sustainability" and "ecological" have become the new buzzwords. This is because, unlike "organic" and "eco," these terms are not protected by law. Anyone and everyone can use them - and use them to advertise themselves, their products or services.

So it takes an attentive and smart consumer to recognize all these sins, which I now list below:

Hidden trade-off: When products are marketed on some environmental benefit while other much larger hidden and detrimental issues are not mentioned. Example: car batteries that are marketed as “zero-pollution” (greenwashing) instead of “zero-emissions” (fine) which focuses only on the usage and not on their production carbon footprint which causes pollution. In 2018, Starbucks also introduced a strawless drinking lid, eliminating the need for plastic straws in an effort to appear environmentally conscious. However, the new lid contained more plastic by weight than the old design. Euphemistic wording is another indicator. For example, the apple slices in the apple bag at McDonald's are organic, but they are in plastic packaging that is guaranteed not to be environmentally friendly.
Lack of proof: When the sustainability claims are put out there without any scientific backup or supporting documentation. Example: a product is “100% biodegradable” (see an example in the post below on the CSR case study - Will's Vegan Shoe Store) but this figure is more or less guesswork, i.e., pulled out of a hat, instead of being backed up with reproducible scientific test results.
Vagueness: Claims that sounds great but have little meaning e.g., “this product is 100% natural”. Arsenic is natural but it’s neither good nor bad for the environment. Or the “climate positive” label you see on many products, which is supposed to mean the product is taking more CO2 out of the air than it produces. Most plants do this via photosynthesis and respiration:

Irrelevance: When claims are correct but don’t really matter e.g., “free of CFCs" (which are bad for the Ozone layer). The issue here is that these chemicals are banned anyway.
Lesser of two evils: When a claim is comparatively true within a product category but it ignores the base rate e.g., SUV 1 is much more environmentally friendly than SUV 2. At the end of the day both are bad for the environment.
Fibbing (telling small lies): One common example is the claim that paper or plastic is made from 100% recycled material but ignoring that the material comes from industrial waste (see post below on ”Der Grüne Punkt”) and not from private consumer waste. So while it is recycled, it is misleading and doesn’t mean what it says on the tin. Like that, the backpack manufacturer Got Bag, for example, also advertised products that were supposedly "made of 100 percent marine plastic”. However, research by "Flip" and "Zeit" showed that this was greenwashing and published their findings.
Worshipping false labelling: When using atrust-badgesapp to attachtrust-labels to your products that have no basis in reality or simply imitate reliable certification badges while youhope the consumers won’t really investigate or do their homework.

So greenwashing can be quite widespread when it comes to “reducing CO2 emissions” and a recent study of the German nonprofit “New Climate Institute” looked at the pledges of 24 large multinationals such as Samsung, Walmart, Apple and others who claim to do much more than they are actually able to achieve (see chart on page 6 of PDF).

Entire nations are in similar boats pledging to reach 50% carbon emission reductions by 2030 when in actual fact they will barely reach 30% reductions (example being the Republic of Ireland where I live). Rather than achieving net zero emissions by 2050 they will at most manage to reduce emissions by 33%.

How Merchants can Influence or Steer Consumer Behavior

Consumers are notoriously unreliable. While surveys increasingly show that online consumers are more likely to look for stores that offer “eco-friendly”, “carbon neutral”, or “climate positive” labelled products and shipping (see also the survey links in other posts below or above), they will often not really check if the “eco-friendly” labels are real.

The study The elusive Green Consumer from Harvard found that while consumers say they want eco-friendly products, they will not always choose one when it comes to a choice between an eco-friendly product and a product with a large carbon footprint. While 65% of Gen-Z consumers say they look for eco-friendly products, only 26% actually buy them acc. to the study. Companies see this consumer behaviour in their BI and analytics and so they go along with this elusive consumer behaviour exasperating the situation even further.

Or, on the other hand, they may also be highly skeptical and not believe what the stores are saying. A recent study “Beyond the greenwash” found that only 25% of consumers trust the eco-friendly claims of online or physical stores.

So the consumer can perceive a loss of integrity in an online or physical retail store that they have shopped in if they believe the store is greenwashing and this can damage the store’s business reputation and hence growth immensely. It’s precisely here where our merchants need to recognize the need to be integral in any environmental claims about their products. Empty environmental claims can really damage a business's reputation with the consumers and this can also lead to loss of potential investments from business incubators and investors.

A major conundrum for companies is therefore the level difficulty and the costs involved to be fully eco-friendly, carbon-neutral, or climate positive. To reach the high bar of eco-friendliness most companies would have to radically change their selling, manufacturing and shipping processes, root and branch.

So providing an “appearance of greenness” seems to be a standard practice amongst many large corporations which causes a false sense of progress and ecological security. Are companies seemingly making an effort or are they simply distracting us from the harsh reality? Do corporate investments pretend to be “green” while not actually protecting the environment? Is everything therefore totally pointless?

7 Virtues of Green Shopping and Retailing

The global market for green products and sustainable technologies is growing exponentially while we type and is projected to dominate the markets by 2027. Ikea has invested billions into outfitted their stores with solar panels. Hershey Chocolates has reduced their carbon footprint by 41% (verified by independent certifiers) by improving energy efficiency and switching to renewables. Read all about Shopify’s climate report here.

So what are the 7 virtues of green shopping and retailing, and how can they be useful to our merchants?

Virtue 1: Focus on the simple stuff like offering products that the consumers regularly buy for their homes and they are more likely to purchase if they are environmentally friendly.
Virtue 2: Check what other stores are doing that is successful and learn from them such as biggreensmile.com, ecohoy.com, sustainkart.com.
Virtue 3: There’s an app for everything! See what app technology can help your store to reduce its carbon footprint.
Virtue 4: Look for organizations and green labels you can collaborate with and get their labels such as OneTreePlanted over Aspire Sustainability. Check out ecolabelindex.com for more green organizations to collaborate with and labels to get for your store. The Green Seal for Sustainability and the Energy Star for energy efficiency are two very important labels to get into your store!
Virtue 5: Eliminate any vagueness of meaning in your store. Remove “green” words that have little to no clear meaning like “green”, “climate positive”, “natural”, or “eco-friendly”. Words that have no proof of any certification standards attached to them are not really green flags, but rather red flags that can elicit a sense of skepticism in any online buyer.
Virtue 6: Show independent information regarding your products e.g., about the manufacturers and producers in order to really build trust in the level of “eco-friendliness” of your store. Show with verified video footage how the products are made in the factories or workshops and shipped in an environmentally friendly way.
Virtue 7: Don’t sweat the small stuff. Don’t get too bogged down with the minor details such as whether paper straws should or shouldn’t be coated in plastic. Focus on the large stuff!

If the merchant is serious about such topics they can follow the above ideas and steps to really grow their business in an environmentally friendly and feel-good way.

Case Study: Will's Vegan Shoe Store

How do they reduce their CO2 footprints? Here is a quick list of great ideas from this store that are “recyclable”:

Their shoes and accessories are from ethically sourced and bio-based vegan materials only (bio-based vegan leather made from plants or ethically sourced cereal crops.
No animals came to any harm in the making of these products. 100% cruelty-free!
Their ethically made vegan clothing are made in Italy only with sustainable materials with bio-oil and a viscose (a natural material from eucalyptus trees) backing fabric and organic cotton mix linings.
Where they cannot find a suitable natural material they will try to use a recycled alternative.
Any polyurethane or polyester they use is recycled.
They also sell vegan grocery & lifestyle products to help people shop kindly and sustainably. Even their sneaker is biodegradable!
All packaging is plastic-free and uses compressed 100% recycled cardboard.
The parcels contain the following:

Non treated paper shipping bags from sustainable sources.
Non treated cardboard boxes from sustainable sources.
Non treated paper parcel tape from sustainable sources.
Shredded cardboard from recycled boxes from their warehouses.

They offer a ReBound return to recycle service where the products are recycled or fixed for reselling.
They have built a network of fulfillment centers around the US and Europe to reduce inefficient shipping routes.
All employees are protected under EU workers and good working conditions laws, with rights that cover:

Working hours, time off & annual leave, equal pay, maternity/parental leave, anti-discrimination, compensation for discrimination victims, TU and agency worker protection, and good health and safety measures.

They have invested in nature-based offsetting projects like avoiding deforestation in Papua New Guinea and Columbia to offset their carbon emissions to zero.
They don't do fast fashion tactics like discounts for more sales. They design and manufacture, and stock to be sustainable, so the customer doesn't overbuy but instead buys less and more sustainable products that they use for a longer life cycle than conventional product life cycles, reducing the overall impact of the product's life cycle on the environment.

Test Our shop.app/ai

Now you can ask some great sustainability-related questions in our AI-assisted Shop VA feature, supporting 50+ languages. Why not run some test questions in your own language like the following and check out the great results in the center stage to the left:

What Shopify stores offer eco-friendly soap? (Will probably not offer any concrete stores but other options)
What ingredients are needed for sustainable soap?
Can you recommend a recipe for eco-friendly soap?
Where can I find sustainable soap-making supplies?