Greenwashing: What Mistake Did Deutsche Bank Make?

How did Greenwashing cause the CEO Deutsche Bank to resign after a greenwashing accusation?

5 min

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Taking the easy pathway to success through greenwashing isn’t the smartest long-term choice, but let’s face it and give credit where it’s due – running a business isn’t easy.

Not only do CEOs have to oversee the company’s  structure, strategy, and communication while also maintaining reasonable profit, but these days – they also have to be wary of their environmental impact. 🌱

If they aren’t, it can cause havoc – which is exactly what just happened with Deutsche Bank. 🏦

The Chief Executive Officer of Deutsche Bank, Asoka Woehrmann, has announced that he will step down from his position following the multiple greenwashing allegations and conspiracies over the years.

The company is in grave danger – as trust has been broken via the media and previous business partners, financial stocks have plummeted, and their mission in sustainability is in question.

How did Deutsche Bank end up the way they did because of greenwashing?

📕 What is Greenwashing?

First of all, what is Greenwashing?

Greenwashing is when a company claims to commit to environmentally friendly practices, but doesn’t take any concrete effort to encourage or sustain these practices. 🙅

Essentially, greenwashing is a way to market a company to be environmentally friendly without the organization needing to implement carbon-friendly practices that are not determined by the consumer: such as production lines, contributing to carbon offset programs, or using renewable energy sources.

Many companies or brands greenwash, even when they don’t mean to. 

The best example is when you go to stay at a hotel. 🏨 Fifteen years ago, you would never see a sign in the bathroom to, “hang your towel up” if you want to “be green” and help save the planet. Now, this is almost a given – no matter how upscale the place you stay is.

Despite these signs to, “please reuse” your towels in hotels – many housekeepers still wash the used towels you’ve left to hang and replace them with new ones.

So, why bother putting the sign up at all? 🤷

It’s simple. They leave these towel signs in the bathroom to signify that they support benefiting the environment – but ironically, insinuate the ideal that they don’t feel the need to directly contribute to reducing carbon emissions themselves. 🙄

By doing this, hotel management believes that they are contributing to carbon offsets and sustainability as they promote their support in helping the environment – when really, all they are doing is ensuring their customers that they aren’t all about money.

Places or organizations that do this ironically, probably do care more about money. 💰

Why? It doesn’t take any time, money, or effort to leave this sign up in the bathroom – but it does to truly alter your company to pertain to the most environmentally friendly measures. Therefore, companies that partake in greenwashing are looking to preserve their funds for lucrative opportunities rather than environmental opportunities. 

This is precisely why greenwashing is bad, and ultimately the most ineffective way to promote environmentally sustainability. 🌱🌍

❓ What is the difference between Greenwashing and Whitewashing?

Greenwashing is not to be confused with Whitewashing.  🙅

Whitewashing is when a company attempts to avoid a scandal by oversharing numerical data with a limited point of view. In other words, whitewashing is when a business or individual oversells the good in attempts to conceal the bad.

🟢 What is the difference between Greenwashing and Green Marketing?

Green Marketing is when a product or service genuinely meets the necessary environmental criteria. 

For example, the product was made with renewable resources or sustainable practices in mind, is free of toxic chemicals, made to be repaired or reused easily rather than thrown away, and doesn’t use excessive packaging.

But there is a fine line between Green Marketing and Greenwashing. If those environmental claims aren’t backed up by credible sources, common “green” labels like “organic” and “eco-friendly” 🌎 could have consumers questioning the validity of the company's true motives. 

Overall, Green Marketing is more transparent, candid, and trustworthy than Greenwashing. 

Greenwashing is merely a marketing tactic, which not only does not directly reduce carbon footprint – but does not allow a company to cultivate a sense of trust between their employees and other consumers.

❌ Greenwashing is a surefire way to failure in all the pillars of corporate sustainability, as it damages your brand and credibility. 

Although carbon credits and carbon offsets are still not the most productive actions to reduce carbon footprint, they are still more worthwhile than greenwashing. 

Greenwashing is like when someone leaves a bowl of candy out on Halloween🎃, because they are too lazy to answer the door all night themselves. In efforts to ensure all children get the same amount of candy, they leave a note on the porch that reads, “Please take one.”

But how do they know that each child is only taking one piece of candy? 🍬 They don’t – and they don’t care enough to corroborate this themselves, but since they left the sign out on the porch : they wholeheartedly 💓believe they’re in the clear.

Greenwashing is the exact same thing. 

💥 Why was Deutsche Bank Subject to Greenwashing?

So, why was Deutsche Bank subject to Greenwashing? A quick recap of events, 🕰️ after Deutsche Bank took ownership of DSW in 2004.

March 2018 😬

Deutsche Bank demonstrated Whitewashing when they made an attempt to bypass a multitude of lawsuits and scandals by publishing reports claiming that their investments were sustainable. 

May 2020 🚩

DWS flaunted their perceived sustainable investments, claiming they would seek to find which companies posed the greatest carbon risk. In June, after Desiree Fixler was hired as a sustainability officer for DSW –  she alerted investigators and journalists that DWS were greenwashing their consumers about their investments.

March 2021 🏴

DWS' supervisory board discovered Fixler's testimonies and released a review. She left the company shortly after. 

July 2021 🚨

Despite DWS deciding to not further investigate Fixler’s allegations, the media reported that the U.S. Securities and Exchange Commission is looking into the situation.

Fall of 2021 💣

DWS created a committee solely responsible for tackling the claims.

January 2022 💥

The CEO, Woehrmann, started to receive threats despite continuing to deny the allegations. Still, The European Central Bank investigated Woehrmann and potential problems with corporate governance.

By May, Prosecutors, along with police and other officials, raid DWS and Deutsche Bank. Prosecutors said they are following up on news reports and the whistleblower's claims. The prosecutors gather "sufficient factual evidence" that environmental, social and governance (ESG) factors "were not taken into account at all in a large number of investments", contrary to statements in DWS fund sales prospectuses. 

Most recently in June, after Deutsche Bank was invaded in search of incriminating evidence, CEO Asoka Woehrmann announced his resignation as a result of the thorough greenwashing investigation.

What could Deutsche Bank have done to prevent this Greenwashing scandal? There were many things that Deutsche Bank could have done differently, but there is one important factor that provoked this climax.

If Deutsche Bank had simply provided numerical data and credible sources to negate the allegations made by Fixler, the following events would’ve been less likely to occur.

👉 In short, Deutsche Bank should have made a greater effort to participate in Green Marketing instead of Greenwashing. 

🤨 Why companies choose Greenwashing over other Sustainable Practices?

Why do companies choose Greenwashing over other sustainable, carbon friendly practices?

Just as it’s easier to purchase a carbon credit or carbon offset, it takes even less effort to implement Greenwashing. 

Ironically, Greenwashing requires more time and effort than many simple, sustainable practices. Implementing actions to reduce carbon emission is better for business in the long run, as doing so also promotes corporate social responsibility.

⚡ Greenwashing and Corporate Social Responsibility

What is Corporate Social Responsibility? Corporate social responsibility, otherwise known as CSR, is a self-regulated effort that allows a business to be held accountable to their impact on society. 

Therefore, corporate social responsibility is imperative to sustain brand attractiveness and legitimacy. 

👉 How does Corporate Social Responsibility differ from Corporate Sustainability? Corporate sustainability strives to retain high levels of success in economic, environmental, and social impact. Corporate social responsibility is aiming to do, “what’s right” 👏 and places moral responsibility above financial opportunities

Greenwashing deflects one from achieving the goals outlined in both corporate social responsibility and corporate sustainability, as greenwashing does nothing to build long-term financial or environmental success.

How can you and your company avoid greenwashing?

How can you and your company avoid Greenwashing? Here are 4 tips to avoid Greenwashing.

1. Invest in Carbon Offsets of Purchase Carbon Credits 💵

Greenwashing is a method of promoting positivity for the environment without partaking in any concrete action. While it is most important to integrate a carbon friendly business plan to be executed on a daily basis, there is no harm in contributing to carbon offsetting projects or purchasing carbon credits.

Carbon offsetting is when a company makes in investment into another environmental project in order to balance out one’s production of carbon footprint. 🌍

Carbon credits are a tradable request that represents an amount of carbon dioxide being removed from the atmosphere to counteract a carbon footprint that’s already been made.

Investing in either of these will illustrate to consumers and society that reducing carbon emissions is important, as your company is willing to financially invest in a certified project that strives to improve the environment. 

2. Establish an ESM and strive to obtain an ISO14001 certification 🏆

Establishing an Environmental Management System, or an EMS, is a good start to avoid Greenwashing. 

An EMS is a thought out plan for a company to meet their environmental goals by continuously documenting their environmental performance. Enforcing an EMS is the first step in order to obtain an ISO 14001 certification. 

An ISO 14001 is a verified document that your company meets all environmental regulations. 

Obtaining an ISO 14001 certification will improve your organization’s credibility, and prevent Greenwashing. 

3. Monitor ESG Reports 📝

If your company commits to monitoring their ESG reports, or Environmental, Social, and Governance reporting – it would demonstrate true dedication to helping to improve the environment.

A company can clearly define the measure of their carbon footprint with an ESG score. 

Surveying your company’s ESG score and the numerical data regarding the reduction of their carbon footprint it provides will prevent Greenwashing, as it delineates the effort to reduce carbon emissions.

In all, Greenwashing is ultimately a harmful marketing tactic that Deutsche Bank could have avoided, and your company can too!

🍀 What about Greenly?

If reading this article about greenwashing has made you interested in reducing your carbon emission to further fight against climate change – Greenly can help you!

Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.

Click here to learn more about Greenly and how we can help you reduce your carbon footprint👣. 

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