Many people are investing in green companies. That’s excellent news for the environment, but it is more critical than ever to spot greenwashing. Greenwashing is when a company tries to make itself look more environmentally conscious than its practices indicate. If you fall for it, you might end up investing in an unethical company.
So today, we’ll teach you how to spot greenwashing so you can avoid investing in unethical businesses. Stay safe and happy investing!
Check A Company’s Certification
One of the ways to spot greenwashing is to check a company’s certification. Several different environmental certifications are available, and companies must meet specific criteria to be certified. By studying a company’s certification, you can be sure that they are operating sustainably and not just trying to take advantage of consumers’ increasing interest in environmentalism.
Check The Company’s Operations
Another way to spot greenwashing is to look at a company’s overall operations. If they claim to be sustainable, but their practices don’t align with their claims, then it’s likely that they’re greenwashing. Pay attention to how a company sources its materials, treats its workers, and disposes of its waste. If their sustainability claims don’t match up with their actual practices, then they’re probably not being truthful about their environmental impact.
Changes To Branding
To avoid investing in unethical companies, it is essential to research and look for any changes to a company’s branding. For example, a company that suddenly starts using green imagery in its advertising may be engaging in greenwashing to convince consumers that they’re more environmentally friendly than they are. To avoid being fooled by greenwashing, take the time to read up on the company and its policies.
Beware Of Common Greenwashing Words
Be aware of common greenwashing words and phrases. Companies will often use language like “sustainable,” “natural,” and “eco-friendly” to make their products sound more environmentally conscious when in reality, they may not be. Do your research to ensure that a company is genuinely committed to sustainable practices before investing.
Check The Company’s Transparency
Look for companies that are transparent about their environmental impact. An excellent way to gauge this is by checking whether or not a company has signed the UN Global Compact’s ten principles on human rights, labor, environment, and anti-corruption. If a company is unwilling to be transparent about its practices, likely, that they’re not acting ethically.
Check The Company’s Media Coverage
Pay attention to the media coverage of a company. If there are multiple stories about them engaging in unethical behavior, it’s probably best to avoid investing in them. By researching and being aware of common red flags, you can ensure you’re only investing in companies that align with your values.
Spotting Greenwashing: In Closing
Following the simple tips in this article, you can help ensure that your hard-earned money goes towards sustainable and ethical companies. It may take a little extra effort to research a company’s practices before investing, but it will be worth it in the end.
