• Marcin Kulik, CEO of Eiravato

Greenwashing - the circular economy's greatest competitor

Updated: Mar 29

Greenwashing is controversial subject. Some believe it really serves our lives and benefits the environment, other thinks it is just a way of distracting people, leaders from what matters most. A viable healthy circular economy delivers real and measurable change on the ground that is visible and trustworthy. Many leading brand organisations need to be cognisant of greenwashing circular economy as consumers are becoming increasing concerned about the plethora of badges and labels where real value and impact is difficult to extract.

Table of contents

  1. What does greenwashing mean

  2. Is greenwashing ethical

  3. Why do companies greenwash

  4. How to use the circular economy to turn a profit?

  5. Build new circular ecosystems

  6. Greenwashing better than circular model?

  7. What is the future of greenwashing

What does greenwashing mean?

A standard definition "Greenwashing is the process of conveying a false impression or providing misleading information about how a company's products are more environmentally sound" (Source: internet). But is it that simple. Not all greenwashing vehicles have deliberate intent to mislead, but when measured under the lens of cause and effect, what are the real results. Another definition is that greenwashing is a process that does not measure real impact predictions upfront and is poor at valorizing results on conclusion.

definition of greenwashing
what is greenwashing

Is greenwashing ethical?

That goes to intent. For many realising the difference may be quite tricky as many organisations start out with great intentions. Ignorance however is not bliss as the effects of misguided vehicles upon genuine impact focused circular activities transfers investment and energy. Greenwashing is often like a sugar rush, instant buzz but when reality kicks in you are left with feeling of that was not good for me.

Why do companies greenwash?

There are no doubt many answers to this question. A good example of such greenwashing project are paper straws of a famous fast-food chain. Original plastic straws due to organic contamination were incinerated generating energy, yet they fit the purpose perfectly. Introduction of “sustainable” paper straws returned with mixed feelings from the customers, one straw was no longer enough to complete your drink. Few months later company disclosed that new straws are non-recyclable and are in fact incinerated like their predecessors.

Was the objective driven by the headline that plastics are bad or was it an impact measured response. How was functionality measured. Was the specter of unintended consequences evaluated should functional deficiencies actually increase volumes where the consumer had to use two paper straws to drink their beverage. Circular economy is not the domain of one, it is a network of critical stakeholders that manage materials to a regenerative or least impact conclusion. The balance between greenwashing and circular economy is LCA measurement and facts. How did purchasing ledgers between paper and plastic straws perform. In functional terms, how was consumer satisfaction measured. For accruing waste, what was the differential in performance.

Please see the table below and look at impact of paper vs plastic straws in detail. Looking at 3 main carbon impact areas: material co2, transport co2 and disposal co2.

table circular project plastic straw
Plastic Straw Project's data

As you can see the CO2 impact difference is 0.07g in favour of paper (4.83%), yet cost difference is 0.37$, making paper straws 1233% more expensive. While in volume-based economics the numbers CO2 may make sense, economical and customer experience impact I leave to your opinion.

It is worth to mention that the data does not consider project cost or environmental impact of de-forestation for paper straw material harvesting.

How to use the circular economy to turn a profit?

The circularity is not a one trick pony, rather it is complex if not supported by an enabling network technology that is an educator, guide, roadmap and protector. It is to economy in circular economy that can be tricky. It is clearly recognised that a vibrant healthy circular economy can not be achieved when trapped in linear economics. For many and quite rightly the value proposition of transition is most unclear, even more so when the roadmap does not have a definitive destination. How do we perceive it, nice to have, a bolt on to other sustainable activities or something we had better be seen to do. The fact is that through a recognition that there is a need for systemic 'not the domain of one thinking' that is embedded upon a robust technology that harvests multiple profit opportunities heretofore unseen.

Looking again at the Co2 performance of the plastic straw, the key contributor is inherent value. So, what if we look at the problem through another lens. What if we sought a solution rather than ineffective replacement where we could design-out to enable re-capture of materials that reduces inherent Co2 as a result of circular re-use. What for example that there was a social modelling context that would be relevant to the European Green Deal.

The value proposition is naturally relevant for industry manufacturers and those sectors who use products like straws, but governing authorities need to be up to speed too. Banning single use plastics as with paper straws may have unintended consequences more so in the light of the Covid19 pandemic where such materials were the only option. They too need to need to be measured and informed how their actions and supports could transform the profit question that by result encourages more participation resulting in a multiplier effect win for all.

As you can see the largest CO2 cost is related to material embedded CO2. So what if we design out the problem and instead of seeking complete alternative, we could design a process allowing re-capture of the material reducing embedded CO2 profile with each circular use.

text about designing out
Designing out in circular economy

Currently the cost of processing of such materials will not be cost effective, yet what if volume based economy principles were applied? I believe there is a lot of margin to work with within 1233% additional cost of paper straw.

Build new circular ecosystems

Any economy requires systemic data underpinning, network infrastructure and tools that enable industry to mobilise. If not, it is just a rag-tag of activities deployed in isolation that are likely to become stranded rather than delivering real tangible impact on the ground. Smart managed data utilising predictive analytics connects multiple key stakeholders on a common frame of reference with the result that intelligence driven collaborative projects can embark. Network communication tools such as embedded media creates an ecosystem of Q&A, shared focus, participation planning that recognises not the domain of one, rather that success is driven by co-operation.

Employing data and predictive analytics can enable collaborative project that capture critical volume of material presenting triple bottom line commercial opportunity. With data we can aim our focus on specific issues, run multiple scenarios to de-risk transformation and identify infrastructural gaps.

With shared knowledge, intelligence and smart data, new circular ecosystems based on solid economic value propositions will arise. Network connectivity including governing authorities can as a result of solid metrics identify infrastructure deficits aligned with materials that could have a circular outcome if new converter solutions were deployed.

Greenwashing better than circular model?

Sustainability does not and should not be a costly enterprise, rather an opportunity for economic growth. One such example is of a Medical Device Manager that in 2020 directed 75% of all waste to defined circular closed loop value chains embedded on Blockchain. Waste costs were radically reduced and transferred materials as circular assets created a double value effect of creating revenue. In-house replaced of old waste management process, saw a significant space saving, so important to most manufacturing plants. Think collaboratively and engaged with their vendor partners, utilising defined circular lean methodologies, the reality was that the impact of circular transition was far more favorable that the old model. For 2020 the result was 100% zero waste to landfill and 100% zero incineration with only 14.9% remaining as traditional recovery/disposal waste planned to be reduced to 8% as continuous improvement in 2021.


What is the future of greenwashing

Greenwashing cannot compete with real genuine data measuring strategies. The European Commission states, " Greenwashing misleads market actors and does not give due advantage to those companies that are making the effort to green their products and activities. It ultimately leads to a less green economy. To tackle this issue, the European Green Deal states “Companies making ‘green claims’ should substantiate these against a standard methodology to assess their impact on the environment”.

The world is changing and it is time to think out of the box. It is not that difficult when the box is ready flourished with network technology, tools and methodologies that are the know-how for rapid, profitable transition to the circular economy.


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