Greenwashing and Green Brands: A Challenge in the Era of Sustainability

By Bárbara Dollstadt and Clara Ortiz, BKM-BERKEMEYER

With the growing interest in environmental protection, driven by the increasing fragility of our surroundings, many companies have adopted sustainability strategies to attract consumers and boost sales. This approach has given rise to the phenomenon of greenwashing, which involves exaggerating or even falsifying companies' environmental credentials by presenting their products as “eco-friendly” or “sustainable” through the use of terms and symbols that do not always reflect a true commitment to environmental responsibility.

The concept of “green trademarks” is closely associated with greenwashing, as many companies use these designations in their brands to create the impression that their products are more sustainable than they actually are, employing visual elements, names, or terms related to sustainability to position their products or services as environmentally friendly.

Greenwashing manifests when companies use misleading marketing tactics to project themselves as eco-friendly without implementing truly sustainable practices or when only part of their process is environmentally friendly. These practices pose not only an ethical issue but also a legal one, affecting market integrity and consumer trust, which plays a crucial role in the fight against greenwashing.

In a market saturated with information, distinguishing between genuinely sustainable companies and those that merely claim to be can be complicated. Currently, companies are increasingly inclined to use terms like “sustainable,” “biodegradable,” “organic,” or “100% natural,” as well as imagery and descriptions suggesting environmental benefits, which facilitates confusion. This rise may be due to reports indicating that consumers seek and prefer brands that contribute to environmental care, even being willing to pay more for these products.

Companies have billions of dollars at stake, reliant on the proper management of their brand reputation. In a much more demanding market, greater proof is required to show that products are truly environmentally friendly; otherwise, brands risk losing visibility and reputation, directly impacting their market position and finances.

Regulation of greenwashing is still developing in many regions. The lack of clear regulations allows companies to use terms like “eco” or “green” without a solid basis, harming both consumers and businesses genuinely committed to sustainability. While the European Union and the United States have made strides in regulating these practices through frameworks requiring concrete evidence for environmental claims, it is crucial in Latin America to strengthen laws and promote certifications to combat greenwashing and foster a more transparent market.

In Paraguay, there is a rising trend in adopting brand names that include terms related to sustainability, resulting in a noticeable increase in trademark applications with these characteristics. Given the global experience, we consider it timely to conduct statistics on the growth of such practices that reflect data enabling us to regulate this phenomenon and prevent consumers from being misled by unsupported claims. Additionally, another aspect to consider regarding this phenomenon is what will ultimately happen to trademark applications currently in process, as in many cases, the name for which registration has been requested could be classified as generic or descriptive, leading to its rejection.

In this context, it is essential for our regulations to evolve to protect both consumers and the environment. Regulatory bodies must establish clear standards requiring companies to substantiate the truthfulness of their environmental claims. Implementing quality seals and certified brands is also crucial to ensure transparency and facilitate the verification of companies' environmental claims.

In conclusion, greenwashing and the misleading use of green brands represent significant challenges in the pursuit of true sustainability. Consumer education and the promotion of independent certifications will play a fundamental role in ensuring that sustainability is not merely a marketing strategy but a genuine commitment to protecting the planet. Only through coordinated and effective action can we guarantee that the move towards sustainability is authentic and benefits both the environment and consumer trust.

For more information, please contact barbara.dollstadt@berke.com.py and/or clara.ortiz@berke.com.py