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🌍 Greenwashing and Business Ethics in Sustainable Development

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🌍 Greenwashing and Business Ethics in Sustainable Development

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In the current market, sustainability is a growing expectation for companies, but not all statements are authentic. Greenwashing, that is, the exaggeration or manufacture of environmental performance, has become a greater ethical problem that undermines trust, deceives interested parties and slows real progress. This essay analyzes Greenwashing in relation to SDG 12 (Sustainable Development Objective 12): Responsible consumption and production, which requires transparency and responsibility. The analysis applies two ethical theories: utilitarianism, which judges actions for its consequences, and deontology (Kantian ethics), which emphasizes duty and honesty. Using recent literature, the essay explores how Greenwashing violates ethical principles and hinders sustainable development.

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A recent study by del Río, González-Álvarez, & López-Arceiz (2023) provides important insights into how corporations engage with the UN Sustainable Development Goals (SDGs) and the risks of “SDG-washing.” Analyzing over 1,100 firms from the S&P Sustainability Yearbook, the authors compared two types of reporting: ex ante indicators, based on the SDG Compass framework, and ex post measures, reflecting actual compliance and implementation. Their results revealed a striking lack of consistency between what companies claim and what they actually deliver. As they note, “the level of agreement between the ex ante and ex post measures is surprisingly low” (del Río et al., 2023, p. 421). This suggests that many firms strategically highlight SDG areas that are easier to showcase while downplaying those requiring more rigorous action. Such selective disclosure enables both greenwashing and SDG-washing, creating a misleading picture of corporate sustainability performance.

The findings carry serious implications for stakeholders. When companies present exaggerated or incomplete sustainability claims, they compromise transparency and accountability, making it difficult for consumers, investors, and regulators to distinguish between genuinely responsible businesses and those using sustainability merely as a marketing tool. In this way, greenwashing does not just harm individual purchasing decisions; it undermines trust in sustainability reporting more broadly, limiting progress toward SDG 12: Responsible Consumption and Production.

Complementing this perspective, Lopes, Gomes, & Trancoso (2023) examine how greenwashing in marketing affects consumer engagement with circular economy practices. Their study demonstrates that when companies exaggerate their environmental achievements, “consumers tend to adopt a skeptical posture, reducing their willingness to purchase circular products” (Lopes et al., 2023, p. 8). This skepticism not only reduces support for recycling, reuse, and waste reduction but can spill over into other industries, weakening overall trust in sustainability claims.

Taken together, these two studies show that greenwashing is more than a communication problem. It creates systemic barriers to sustainable consumption by distorting market signals, reducing consumer confidence, and discouraging firms that invest in authentic sustainability. This makes greenwashing a direct obstacle to achieving SDG 12, which depends on reliable information and trust between producers and consumers.

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Greenwashing vs. True Transparency: Business Leaders on the Frontlines

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Utilitarianism

Linked to Bentham and Mill, utilitarianism uses a "consequentialist framework" to pursue the "greatest good for the greatest number" (Shaw et al., 2020, p. 45). The short-term gains for shareholders or employees from greenwashing are outweighed by the harms: it deceives consumers, leading them to cause ecological damage, harms authentic sustainable companies and erodes confidence in actions against climate change, generating negative net profit.

Deontology

Kantian deontology focuses on "duty-based morality" rather than on outcomes (Shaw et al., 2020, p. 69). Their categorical imperative has two key rules: actions must be universal (greenwashing would collapse trust if it were to become widespread) and people must be treated as ends in themselves (not as tools for profit). Greenwashing violates both rules, exploiting consumers' ethical desires. Even when it generates some benefits, it is inherently unethical.

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Greenwashing represents a serious ethical and sustainability challenge that undermines trust, responsibility and global progress towards responsible consumption and production. From the perspective of utilitarianism, greenwashing is unethical because it generates much more harm than good, eroding trust and harming collective well-being. From the perspective of deontology, it is incorrect because it violates the moral duty of honesty and treats consumers as mere instruments for profit. As SDG 12 emphasizes, achieving sustainable consumption and production requires transparency and accountability on the part of companies. To combat greenwashing, both regulatory reforms and cultural changes in business ethics are essential. Finally, authentic sustainability cannot be achieved through deception, it requires honesty, responsibility, and a commitment to the common good.

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Greenwashing directly undermines SDG 12: Responsible Consumption and Production, which aims to "ensure sustainable consumption and production patterns". The success of this goal depends on transparent communication, reliable information, and trust between producers and consumers. By misrepresenting their environmental impact, greenwashing companies distort markets and weaken the role of consumers as active agents of sustainability. For example, consumers who want to buy eco-friendly products may unwittingly support environmentally harmful practices if they are misled by false claims. This reduces demand for truly sustainable products, discourages innovation, and prevents markets from aligning with sustainability goals. In addition, greenwashing can have cross-cutting impacts on other SDGs. For example, misleading claims about carbon neutrality or energy efficiency affect SDG 13 (Climate Action), while deceptive claims about working conditions can relate to SDG 8 (Decent Work and Economic Growth). This highlights the interconnectedness of the SDGs and the broader systemic harm that greenwashing causes.

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To deepen the understanding of greenwashing and its broader implications, several recent studies offer valuable insights. Spaniol et al. (2024) conduct a conceptual analysis that clarifies the limits of what constitutes greenwashing, providing a framework for distinguishing authentic sustainable practices from misleading claims. This conceptual clarity is essential for both researchers and practitioners seeking to identify and prevent deceptive practices. From the consumer's perspective, Vilkaitė-Vaitonė (2024) presents empirical evidence showing how misleading marketing erodes consumer trust and discourages sustainable purchasing, especially in industries such as hospitality and tourism. Their findings illustrate the tangible consequences of greenwashing in the marketplace, where consumer skepticism can undermine demand for authentic green products. Finally, Paramitha, Tan, & Lim (2025) discuss how companies can respond when accused of greenwashing, highlighting the role of sincerity in apologies, consumer forgiveness, and perception of the severity of the incident. Their study suggests that while reputational repair is possible, it requires genuine engagement and real corrective actions. Taken together, these sources highlight that greenwashing not only damages consumer trust and behavior, but also complicates efforts to regain credibility, making it a persistent obstacle to sustainable business practices.

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Online Education and Equity in Education (2)

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Del Río, C., González-Álvarez, K., & López-Arceiz, F. J. (2023). Examining greenwashing and SDG-washing: An analysis of corporate engagement with the SDGs. Sustainability Accounting, Management and Policy Journal, 15(2), 412–456. https://doi.org/10.1108/SAMPJ-02-2023-0080

Lopes, J. M., Gomes, S., & Trancoso, T. (2023). The dark side of green marketing: How greenwashing affects circular consumption? Sustainability, 15(15), 11649. https://doi.org/10.3390/su151511649

Paramitha, V., Tan, S. Z., & Lim, W. M. (2025). Undoing greenwashing: The roles of greenwashing severity, consumer forgiveness, growth beliefs and apology sincerity. Journal of Product & Brand Management. Advance online publication. https://doi.org/10.1108/JPBM-11-2023-4846

Shaw, W. H., Barry, V., & Sansbury, G. (2020). Moral issues in business (14th ed.). Cengage.

Spaniol, M. J., Danilova-Jensen, E., Nielsen, M., Rosdahl, C. G., & Schmidt, C. J. (2024). Defining greenwashing: A concept analysis. Sustainability, 16(20), 9055. https://doi.org/10.3390/su16209055

Vilkaitė-Vaitonė, N. (2024). The greenwashing trap: How misleading marketing affects consumer green purchasing habits. Business: Theory and Practice, 25(2), 593–602. https://doi.org/10.3846/btp.2024.21204