Katherine: Having a transparent, evidence backed story behind why your business is sustainable and what the impact is. Something that is specific and measurable is absolutely crucial for a scaling green tech company, both for finding investment, finding new customers and navigating a changing regulatory environment. So we have businesses where the vast majority of their work is actively harmful to the environment, but the vast majority of their marketing is focused on the kind of green energy work that they're doing, consistently announcing, getting the glory as it were about your sustainability claims. And then when it gets near the time, quietly taking it down and announcing another goal. That's a good example of that.
Matt: Yeah. So you are always a couple steps away, but you are not actually getting closer to the goal in a meaningful way. The solutions we need to save the planet from climate and biodiversity crisis are here, but they won't make a difference unless adopted at scale. We are Matt Jaworski and Katherine Keddie, and we focused our careers on ensuring this happens in time. Back in 2021, we started Adopter, Europe's first marketing company working exclusively with Scaling Green Innovation. Since then, we've supported organizations from preseed startups and Earthshot Prize finalists to international unicorns and global NGOs. We've worked with Green Tech Solutions across FinTech, construction, food systems, nature finance and more. We also mentor on some of the world's leading venture builders such as SOSV, Indie Bio, Carbon 13 and Conception X. We are on a mission to support 100 high integrity green innovation solutions by the end of 2025 and 1000 by 2030. This podcast is the next step on this journey.
Today, in this episode, we'll be having a look at one of the probably biggest and probably also most important topics in the world of green tech, climate tech marketing, which is greenwashing, and most importantly, how to do marketing for your climate change solution without greenwashing. Without further ado, Kat, how would you explain what is greenwashing to a 5-year-old?
Katherine: Firstly, I love this question because it makes you clear. How would I describe greenwashing to a 5-year-old? I would say it's when you are pretending that you are doing good things, but you're not, or you are lying about doing bad things by talking about the good things that you are doing and not talking about the bad things. Or you are doing good things, but you don't want to tell anyone about it. So you are lying by not talking about it.
Matt: It's spot on. What you could probably add to it, is also this element, to get some benefits. So you do bad things, you don't talk about them because you don't want your parents to give you a punishment or maybe take a cookie away from you, or you want them to give you a cookie so you talk only about the good things you do, but you never mention the bad things, right? Because then the parents wouldn't give you a cookie. And that's essentially what greenwashing is in the context of Green Tech innovation. And even more broadly, right? That's what businesses do when a company creates a new collection of sustainable clothing made fully out of hundreds of thousands recycled bottles. But then when you look into it deeper, you realize that they actually had those bottles manufactured to order so that they could recycle them because that would give them the marketing benefit.
Katherine: Yeah, absolutely. And I mean, it's something that we're asked about in our work constantly. I think not greenwashing or another way of putting it is having a really clear evidence backed story behind why your company or solution is sustainable. And the detail to be able to actually back that up is absolutely crucial for providing that and building that authority and credibility that you really need to get those early customers investors, people excited and invested in your idea. So it's such an important topic, and actually Planet Tracker came up with six types of greenwashing, which I think are really useful because it's actually a slightly more broad term than you may initially think. So when you think about greenwashing, you think about people actively lying. But there's also other forms which are, I'll go through in a second, but that include talking specifically about the good thing that you're doing here and ignoring the bad thing, signing up for green initiatives and then not doing anything about it, pushing back your goals. So there's a range of different things. What I'll do now is I'll just walk through maybe the first six and then we can go through some examples.
Why greenwashing is not always intentional
Matt: Yeah, absolutely. But before we get started, what I remember now, and I think it's very relevant to this conversation, is something I talked about in an interview with Aled, with Dr. Aled Roberts, founder of Deakin Bio, currently rebranding to Deakin with our help. When we're doing interview for another of those episodes, which might or might not be out at the time someone is listening to this episode, depending on our publication queue. We talked about there being cases of companies, maybe emphasizing their impact with good intentions or maybe being unsure of their impact at the beginning of their journey, and then getting stuck in, well essentially impact washing and greenwashing as they scale not the case of that company, just something that tends to happen from time to time in just the broader tech space. The key point is that greenwashing does not have to be intentional.
As you mentioned, there will be the cases of companies, I don't know, taking plain old concrete, putting a green leaf on the packaging, buying some low quality offsets from a distant part of the world and claiming that they're selling now net zero concrete instead of having actual meaningful innovation. But there will be also cases of companies doing greenwashing by accident unwillingly or sort of getting stuck with it because of some decisions they made earlier due to, let's say, less rigorous impact or carbon accounting practices that don't scale as well as they hoped with your business's growth.
Katherine: Yeah, absolutely. I think, the challenging thing is as well, previously this was seen as being kind of a nice to have, to be really clear about your sustainability claims, but more and more it's becoming part of regulations. But you also have more questions being asked by specific investors, accelerator programs. Like you have to be coming to these parties with a really clear case, evidence backed case of why your solution is sustainable. And then obviously, some of the examples you gave are also important for other businesses that are trying to be sustainable and have a positive impact that are not necessarily climate tech. So yeah, it covers a lot of different ground, I think.
Matt: Absolutely. Absolutely. And we already touched on a couple of those different types of greenwashing, already dropped the name of impact washing. We touched on a few other types. Well, I think we should get right into it, right? So we align on the wars, we can then discuss each of them in more detail.
Green labeling
Katherine: Sure, yeah. So I will kick us off with green labeling. So that's, I think probably the most obvious example that you think of when you think of greenwashing. It's saying this thing is sustainable for this reason. This thing is biodegradable, for example. But not having any kind of evidence to back it up. One example of green labeling that happened kind of over 10 years ago is there was a company that is known for selling kind of children's products and they were making claims around the specific kind of materials that were in these products. And it turned out that those actually made a really small percentage of kind of the broad material mix that was within them and that's something that you see quite often where you say, okay, well it's better because it's got this and this in it, but you're saying, okay, for that reason it is, and then give it a kind of sustainability label rather than work on the basis that it's actually only making up quite a small percentage of the material as a whole.
Matt: Yeah. So it's kind of like made with natural materials rather than made out of natural materials. And then when you look at it, it actually turns out that natural materials are a fraction of the product's content and it's not enough to meaningfully influence its sustainability.
Green lighting
Katherine: Yes, absolutely. You've also got green lighting, which is when you talk specifically about a really positive initiative you're doing, while let's say 80% of your business is doing things that are actively harmful to the environment, but actually, that only makes up a very tiny percentage of your marketing, and all of your marketing is focused on one small green initiative that you are running.
Matt: Would you say that this could be example of some oil companies at times sort of rebranding, trying to reposition themselves as hydrogen manufacturers just focusing on not green hydrogen, but on those types of hydrogen that are derived from fossil fuels?
Green shifting and green rinsing
Katherine: Yes, exactly. Great example. So we have businesses where the vast majority of their work is actively harmful to the environment, but the vast majority of their marketing is focused on the kind of green energy work that they're doing. So that would be a really good example. Aside from kind of the oil and gas examples that we just gave, there's also a lot of discussion around green lighting in relation to some kind of larger banks, which say talk widely about their sustainability initiatives. And a vast percentage of their marketing is focused on those initiatives, but at the same time, invest a lot of money to support industries that are not sustainable. So that's a commonly talked about example. The third one is green shifting, which is when you shift the blame onto consumers and you actually don't consider those kind of bigger bodies like big corporates, for example, that have a far larger environmental footprint. We've also got green rinsing, which is revising sustainability targets. So if I have a big announcement where I go, we've got this really ambitious goal by 2030 that we are going to become net zero, for example. And then it gets nearer the time, and then we quietly take that down and then add up another one to the website.
Matt: We say that we're going to be carbon negative by 2040 now because we are pushing the envelope, we are becoming more ambitious.
Katherine: Exactly.
Matt: That would be an example of it.
Katherine: Consistently announcing, getting the glory as it were about your sustainability claims. And then when it gets near the time, quietly taking it down and announcing another goal. That's a good example of that.
Matt: Yeah. So you are always a couple steps away, but you are not actually getting closer to the goal in a meaningful way.
Green crowding
Katherine: Exactly. Exactly. Similar example is green crowding, which is when you sign up for sustainability initiatives, again, get the glory from doing that and then don't actually do anything to kind of maintain that. So once again, you are joining an initiative or you are kind of announcing your involvement with something that's well known to be sustainable, but actually you're not tangibly doing anything to reduce your impact or to create positive impact even with the businesses that we work with.
Matt: Absolutely. It reminds me of a new story I read, a year, two or three years ago about some group of big companies that came together to reduce, I think it was a specific type of plastic pollution in the oceans, something like this. Again, I think the broad example will still stand even if I don't remember all those small details. And after 10 years of this initiative, some, I think journalists reviewed the progress results and nothing was done. So there was the initial announcement, the launch of the initiative, good publicity for those involved with it. However, it has not led to any meaningful outcomes. Now we see there will be some initiatives that lead to meaningful outcomes, however, those that fall under the label of green crowding, those will be the ones that were a PR stand from the beginning.
Green hushing
Katherine: Yeah, absolutely. And then the sixth one is actually a bit more controversial because I think we always encourage the clients that we work with and the businesses and solutions that we support to be evidence backed and even conservative with their green claims, and that we would rather that they're clear and we'd rather that we are a hundred percent certain and they are a hundred percent certain that this is the impact that they can make. Then they kind of charge in with lots of claims, as startups and early solutions tend to do and then have a challenge. So the sixth one is focusing on green hushing, which is the idea that because you are concerned about potential backlash from talking about the efforts you are making to have a good business and to be sustainable and to reduce your carbon emissions you actually underreport your impact, which can be very negative for an industry as a whole because you're not sharing ideas, you're not sharing progress. And that's considered another form of greenwashing.
Matt: Absolutely. I could see this becoming relevant, especially now with a lot of shifts in the public discourse and global international policy, especially led by the US shifting away from ESG, equality, diversity and inclusion initiatives and let's say such topics, right? Some companies that are making meaningful progress in those areas might choose not to publicize it or share it as widely because they would be afraid of getting backlash from those let's say political movements or people who might disagree with this or in some way or for some reason be opposed to them.
Katherine: Yeah, exactly. I think it's more broadly a challenge. And I would also say on the other side, there's a challenge broadly with the environmental movement where it sort of eats itself and there's a standard for perfection, which if not achieved, is kind of criticized, which is also a challenge because realistically, if a business is making progress, there is a learning component to that. And going net zero as an economy let's say in the UK is a huge industrial shift. It's a major change happening in a short time period, and that will involve some kind of learning process. And I think if we keep our achievements and our results to ourselves, or if we are worried because of this potential backlash to not talk about them, it holds the industry back and means that it's not as easy for us to achieve our goals.
Matt: It's kind of as if you were embarrassed to say at school that are just not willing to say that you got an A at school because someone might point out that you didn't get an A star.
Katherine: Yeah, exactly. Exactly. And I think the fear of backlash is something that I think is important from a marketing professional perspective to really understand that your claims are accurate and evidence-based and using the language that makes most sense and follows the regulatory demands that are coming into your region. But at the same time, that means you're confident to be able to talk about the benefits that you are bringing as a business or through specific policies or if you're a climate tech company, the impact of your business as a whole, aside from just the kind of broad investment case or the benefit to the customer, what is the broader impact story that you are telling and you have confidence to be able to actually tell that story.
Matt: Absolutely. So if you are transparent as a business, if you are working on meaningful innovation, then you'll be also able to transparently communicate your progress without the risk of falling into any of those greenwashing categories from green lighting to green hushing, right? There might be obviously moments when it's too early for you to share it. You are working on verifying your claims, that's perfectly fine. That's different from green hushing.
Greenwashing as an investor risk
Katherine: One of the reasons why it is so important, if you are an early stage or a scaling green technology company that is going to raise investor funding to avoid greenwashing at all costs and have a really clear and transparent kind of carbon case that you put across to investors, is because it is a key part of their due diligence specifically more of those that are focused on green technology or this specific niche, but also more broadly as being seen as obviously a reputational risk, but also a risk when it comes to policy and regulation and customer expectations, all of the things that we've been talking about.
Matt: To jump in really quickly, it makes perfect sense that well, if a company starts to engage in greenwashing or maybe their way of impact accounting works due to some loophole in the current regulations, systems, approaches, whatever, this is a risk for an investor because if that loophole gets closed, that company won't have any competitive advantage, won't have a place in the market, it'll be wiped out.
Carbon 13's approach to impact accountability
Katherine: Yeah, absolutely. And I think that's a great example, but I think it's also a broad like trust thing. If you are exaggerating the claims that you're making about your business, what else are you exaggerating? How can you trust or how can you authority build on the side of the startup that's just, it makes it much more tricky. And I think a good example of how important this is comes from Carbon13, who are the UK's top climate tech venture builder and accelerator. I know you are a domain expert, Matt, so you'll know a lot about this, but one of the things they do from the start, which I think is really important is they look specifically to build ventures that have the potential to remove 10 million tons of carbon per year per venture.
So that's the sort of scale that they're looking at. And one of the ways they kind of consider that is they really enforce at the beginning that you should be building your startup on the basis that you're going to have two kind of main tenants of your business. So there's the investor story, so why is your business investor ready and how is it going to scale? And then the carbon story, which is how are you actually going to scale impact to reduce those 10 million tons of CO2 per year? And building this transparency and this kind of evidence backed specific story about why you're sustainable from the start is a key thing that they put across and it's why their businesses are so successful and growing so quickly.
Matt: Absolutely. And it's great that they combine them sustainability impact with, well, something that makes a viable business, the investment case, because sometimes there is this old fashioned perception of green tech as companies that deliver sustainable impact, but not necessarily real tangible business benefits, while Carbon 13 ensures that those are companies that create both, and there is a valid reason to invest in them as an investor or to buy from them as a customer in addition to just the sustainability impacts and results.
Matt: Perfect. Wow So big topic. I think we only scratched the surface of it, didn't we? Because we could be talking about it for a whole weekend, for a whole week, but we need to post somewhere. We need to stop at some level of simplified view of it. If we were to wrap up our conversation, what would you say are the key takeaways and why does it matter and how is it relevant in the context of scaling green tech companies?
Katherine: That's a great question. I would summarize it as having a transparent, evidence backed story behind why your business is sustainable and what the impact is. Something that is specific and measurable, is absolutely crucial for a scaling green tech company, both for finding investment, finding new customers, and navigating a changing regulatory environment.
Matt: Perfect. And it's not something that's relevant only to a story or a story you tell on the conferences that you put into a pitch deck. It's something that should be present across your entire marketing and sales activity. It should be present on your website, it should be present on your social media and in all of those places, all of those channels that you're using, you should also make sure that you don't lean into the territory of greenwashing. So yeah, thank you very much Kat for this overview. It was great to exchange thoughts. I learned a bit myself too. And for those of you who'd like to learn more about greenwashing and most importantly, how to create impactful and authentic messaging that is free of greenwashing, make sure to go to our website where we have available dedicated resource. You'll find a link in the episode's description. Now thank you very much Kat once again. And thank you all for listening in. Until the next episode.
Katherine: Can't wait.
