Six months after Lazada was accused of greenwashing for labeling less-plastic products as “green” in a one-off Earth Day sales promotion, the e-commerce firm’s head of sustainability quietly departed and the company stopped communicating its green efforts.
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It was a case of “green hush” – when brands downplay or underreport their green credentials because they worry they will be called out for greenwashing – that is, making exaggerated or false green claims.
Eco-Business reached out to Lazada, and parent company Alibaba, to ask how the incident in April had affected its sustainability communications and programmes. The Singapore-headquartered firm did not respond.
Lazada could be among a growing number of firms choosing to keep quiet about their sustainability efforts. An October report by South Pole, a climate project developer, found that one of four large private firms with net-zero targets have not publicised their decarbonisation progress.
Such green-hushing is happening even as more companies spend bigger budgets on meeting their climate commitments, the report noted.
Recent high-profile cases of multinational brands landing in hot water for greenwashing may be putting firms off talking about their sustainability endeavours.
The offices of Deutsche Bank were raided by police in June over allegations the bank’s asset management arm, DWS, had been falsely labelling investments as green, and last week, HSBC was banned from advertising its climate credentials in the United Kingdom.
No legislative moves have been made to clamp down on greenwashing in Asia, but growing public scrutiny of corporate sustainability claims by consumers and activists could be persuading firms to go dark.
Green-hushing is concerning as less public-facing communication makes targets harder to scrutinise, according to South Pole’s report.
“The negative impact from the threat of accusations of greenwashing can increase the risk of inaction among companies already lacking in confidence when it comes to communicating their sustainability efforts,” said Suzy Goulding, who leads a new sustainability practice at public relations firm MSL.
“Companies may feel that the steps they are taking aren’t yet good enough to communicate to stakeholders or may feel that they cannot communicate on sustainability initiatives until they’ve hit their targets,” she told Eco-Business.
How greenwashing accusations affect companies
Singapore bank DBS was recently called out for greenwashing a plan to stop coal financing, while oil major Shell was found to be making green claims that were not justified by its investments in clean energy.
Both companies declined to comment on how the greenwashing allegations affected their communications or sustainability programmes.
Asia Pulp and Paper (APP), an Indonesian paper company that has often been accused of flouting a commitment it made a decade ago to stop cutting down forests, said greenwashing accusations can be demotivating for sustainability teams, particularly those on the ground implementing commitments.
“When we started our sustainability journey a decade ago we were idealistic and imagined that everyone would be just as excited as we were to see our plans unfold and to celebrate the progress we were making,” said Elim Sritaba, the company’s chief sustainability officer.
The firm has been linked to deforestation through its suppliers and sparked outcry when a plan emerged last July to expand its huge paper mill in Sumatra. APP’s plan to go net-zero, which emerged in May, drew allegations of greenwash for omitting the emissions from operating on peatlands from its net-zero calculation.
As a result, “pragmatism has replaced idealism” in how APP communicates, Sritaba said.
The company maintains an open dialogue with stakeholders, always responded to criticisms, which are published on its website, and has improved how it monitors its concessions, including third-party auditing of its sustainability data, she said.
APP’s sustainability progress may not be 100 per cent perfect, but critics will always highlight the areas that aren’t working, Sritaba said.
“Unfortunately the spotlight is usually on our history. They [campaign NGOs] repeat allegations about our past without acknowledging the progress we have made,” she said.
“Opinions can be stubborn. To some observers, it doesn’t matter what we do, they just close their eyes,” Sritaba said.
Does green hush mean sustainability programmes go dark too?
Calling out a company for greenwashing could push the firm to raise its sustainability game, but it may risk derailing sustainability programmes, some observers suggest.
Cherie Tan, Asia Pacific head of public affairs, science and sustainability, for agrochemicals firm Bayer Crop Science, says greenwashing allegations can make getting internal buy-in for sustainability projects more difficult.
“It takes a lot more explaining to stakeholders and a lot more time to get sign-off for the resources needed for the work,” said Tan, who has also worked in sustainability and communications for consumer goods firm Unilever and Indonesian pulp and paper company APR.
But Tan said greenwash criticism can push organisations to improve, citing improvements made to the Roundtable on Sustainable Palm Oil, a palm oil standards body, over criticism from NGOs for its controversial “green palm” certificates.
Corporate vulnerability
Part of the problem for companies worried about greenwashing blow-back is a low risk-appetite for talking honestly about how difficult sustainability is to get right, Tan said.
Sustainability is a “moving target”, a constantly evolving process of improvement, and companies should try communicating that reality, she said.
“Corporate vulnerability” – in which companies acknowledge their strengths and weaknesses is a way of tempering criticism. But companies rarely want to talk about failure and setbacks.
“There’s lots of corporate communications around commitments - too much. There’s not enough about the journey, delivery and implementation phase,” said Tan.
More transparency around the challenges of implementing green goals could pave the way for more credible sustainability communications and result in fewer allegations of greenwashing, she said.
Companies seem to be even less willing to communicate “the bottom-up perspective”; stories about actors in the supply chain, for instance customers, farmers or fisherfolk, that are key to progress, Tan noted.
Companies may quietly acknowledge their struggles to improve supply chain sustainability in the fine print of annual reports or at conferences under the promised anonymity of the Chatham House Rule, but rarely more openly than that, she said. Under the Chatham House Rule, participants in a discussion may use any information exchanged at the session but must not disclose who gave that information.
When wielded with confidence and authenticity, communicating corporate vulnerability can be a powerful communication tool, said Tan.
