Italia study: 'Stopping greenwashing is not enough, without incentives the environment does not improve'

Companies can really improve their environmental impact and at the same time do greenwashing by communicating a higher than actual 'green' commitment: this is what emerges from new research by three professors of the Faculty of Economics at the Free University of Bozen/Bolzano published in the scientific journal Economics Letters. The study analyses how companies behave when consumers cannot directly verify the environmental quality of products and have to rely on information provided by companies. In this scenario, the researchers explain, investing in the environment and greenwashing are not alternative choices, but often go hand in hand.

Greenwashing, or 'green window dressing', is a deceptive marketing strategy that presents products or companies as environmentally friendly in order to enhance their image, while hiding a real negative environmental impact. This practice, often based on vague and unverified claims, aims to exploit consumers' growing ecological awareness.

Another result emerging from the research concerns the role of consumers. When consumers become more attentive and informed, companies tend to reduce greenwashing, but they also reduce real environmental investments. A counterintuitive effect that challenges the idea that increased awareness automatically leads to increased sustainability.

Research also shows that competition does not always have a positive effect. In some markets, especially when products are complementary, companies with greater market power may invest more in the environment but, at the same time, intensify greenwashing. In other cases, competition reduces both practices.

Overall, the study sends a clear message to public decision-makers: combating greenwashing is necessary, but not sufficient. Overly rigid policies or interventions that only focus on consumer awareness can have unintended effects, even reducing real investments in sustainability.