The environmental issues pose one of the biggest threats to humankind. Today, we are all faced with serious environmental problems that cannot further be ignored. The biggest environmental threats that endanger the Planet’s survival are climate change, deforestation, pollution, loss of biodiversity, melting polar ice and rising sea levels, oceanic dead zones, and explosive population growth. They suddenly became an alarm for action for every person in the Earth.
In the early 1990s, global concern about environment protection intensified and there was a rapid rise in products with environmental claims. Consumers became more conscious that their consumption impacts the environment. Companies started to promote their products as ”green” to attract a growing environmentally aware segment. Companies have recognized environmental concerns as a source of competitive advantage.
However, in attracting a “green” audience, companies often used claims that sound environmental, but were actually vague, and at times false. These suspicious environmental claims have caused consumers to question corporate honesty. “Greenwashing”, as a new term, is defined as a disinformation disseminated by companies so as to present an environmentally responsible public image. It is the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service. Terra Choice listed six sins of greenwashing: sin of the hidden trade off, sin of no proof, sin of vagueness, sin of irrelevance, sin of lesser of two evils and sin of fibbing. The concern over greenwashing is not only that it misleads consumers, but also that if unscrupulous marketers continue to claim to be environmentally friendly, then companies true to their environmental mission lose their competitive edge.
This paper aims to give directions to companies and consumers on how to cope with greenwashing practices.

Key words

greenwashing, competitive advantage, environment, environment protection, environmentally awareness, green products

JEL Codes: М31, Q50


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