Greenwashing and Việt Nam’s Business Ethics Dilemma

BT wrote this article in Vietnamese and published it in Luật Khoa Magazine on Sept. 9, 2025. Đàm Vĩnh Hằng translated it into English for The Vietnamese Magazine.

As consumer demand for environmentally friendly products grows, more businesses are adopting "green" marketing to reach more customers and build their brand. But behind the polished ads touting eco-friendly, organic, or natural goods often lies a deceptive practice known as “greenwashing.” This strategy misleads consumers, harms the environment, erodes public trust, and undermines the efforts of genuinely sustainable companies.

What is Greenwashing?

The roots of the term trace back to the environmental movements of the 1960s and 70s, leading to rising public concern for the planet and the signing of several international environmental agreements.

Amid these developments, businesses saw a new trend—and a new marketing opportunity. The strategy of appearing environmentally conscious, regardless of reality, began to emerge: Greenwashing.

“Grenwashing” was coined in 1986 by environmentalist Jay Westerveld in a now-famous essay targeting the hotel industry. He criticized hotels for asking guests to reuse towels to "protect the environment," a measure they claimed saved water and reduced waste.

Westerveld, however, argued that these token efforts had a negligible environmental impact and primarily served to cut the hotels' laundry costs. He exposed that beyond the eco-friendly slogans, many of these companies had no meaningful environmental action plans. [1]

By 1999, the term was being formally defined by major dictionaries. Webster’s New Millennium English Dictionary describes it as “the practice of promoting environmentally friendly programs to divert attention from an organization’s environmentally harmful or less attractive activities.”

The Oxford English Dictionary added another definition, describing it as “disinformation disseminated by an organization so as to present an environmentally responsible public image; an environmental image publicized for or by an organization, which is considered unfounded or deliberately misleading.” [2]

In essence, greenwashing occurs when a company or organization presents itself as environmentally friendly while concealing the fact that its actual business model or operations cause significant environmental harm.

The Many Faces of Greenwashing and How to Spot Them

In today's highly competitive global market, consumers have become more demanding and discerning, forcing greenwashing strategies to become more sophisticated to avoid exposure. This reality means that consumers, regulators, and watchdogs must be equally vigilant in identifying the many forms of corporate greenwashing.

A report, The Greenwashing Hydra, by Planet Tracker outlines six common types: greencrowding, greenlighting, greenshifting, greenlabeling, greenrinsing, and greenhushing.

First is greencrowding: the tactic of hiding in a crowd to avoid individual scrutiny. [3] A company may point to the collective goals of an industry alliance to deflect criticism from its own harmful practices. For example, a fashion brand might join a “Sustainable Apparel Alliance” to gain a veneer of sustainability while still mass-producing clothes with toxic materials.

Next is greenlighting, which involves spotlighting a minor green initiative to distract from much larger environmental harms. [4] A beverage conglomerate might heavily promote its sponsorship of a beach cleanup project while continuing to produce billions of single-use plastic bottles annually. The cleanup becomes a "green light" that draws attention away from the mountain of waste.

Another tactic is greenshifting, which pushes the responsibility for environmental protection onto consumers. [5] A company might run campaigns urging people to recycle without making any effort to change its own polluting production methods. The result is a false image of corporate responsibility that blames customer inaction for environmental harm rather than corporate negligence.

Greenlabeling is perhaps the most common tactic, plastering products with vague terms like “100% natural” or “eco-friendly” without any independent certification. [6] Consumers should instead look for credible, third-party certifications, such as FSC for sustainable wood products or Energy Star for energy-efficient appliances.

Greenrinsing refers to the practice of constantly changing or postponing environmental goals. [7] A company might announce bold sustainability targets, only to quietly delay the deadlines or revise the goals downward as they approach. This tactic can be spotted by tracking whether a company consistently shifts its own goalposts.

Finally, greenhushing is a form of reverse greenwashing where a company deliberately hides its legitimate environmental efforts to avoid scrutiny from regulators or the public. [8] While difficult for outsiders to detect, if a company known for progressive practices never publicizes its achievements, it may be a sign of greenhushing.

Greenwashing and the Ethics of Corporate Responsibility

As environmental awareness rises, so too has the prevalence of greenwashing, resulting in numerous public scandals. In 2019, for instance, McDonald’s launched paper straws that were later found to be non-recyclable, contradicting its green commitments. Coca-Cola similarly introduced “Coca-Cola Life” with green packaging that misled consumers into believing it was a healthier option, despite containing 6.6% sugar. [9]

These cases demonstrate how, when profit is prioritized above all else, companies may ignore basic ethical principles and deploy false environmental claims to attract customers and boost sales. While greenwashing may yield short-term gains, the long-term damage from exposure is severe, ranging from eroded consumer trust and a tarnished reputation to potential legal consequences.

A solid ethical foundation is therefore crucial for any business seeking sustainable growth. Instead of relying on flashy advertising, companies should:

• Be truthful in their environmental claims;
• Avoid using misleading terms, imagery, or packaging;
• Commit to concrete, measurable sustainability goals instead of vague promises.

The Legal Challenge for Việt Nam

Many countries have already adopted robust measures to combat greenwashing. The European Union, for example, has passed regulations requiring companies to back up green claims with scientific evidence.

The U.S. Federal Trade Commission has issued strict environmental marketing guidelines that demand specific, verifiable, and truthful claims. The United Kingdom has also introduced a Green Claims Code to ensure that businesses accurately communicate and do not mislead consumers.

These international efforts present both a challenge and a roadmap for Việt Nam, underscoring the need for swift action. Drawing from global experience, Việt Nam could consider a multi-pronged strategy.

First, it should establish a clear legal framework that requires companies to substantiate environmental claims with verifiable evidence.

Second, an independent supervisory agency should be created—or an existing authority empowered—to investigate and penalize false advertising.

Finally, raising consumer awareness is crucial so that the public can recognize the deceptive practices of greenwashing and exert market pressure for more responsible corporate behavior.