What Happens in Practice?

There is a range of views of what exactly defines greenwashing. Two extreme views are presented below.
Harsh Critics of Corporations Less Harsh Critics of Corporations
CorpWatch, a non-profit organization whose mission is to expose multinational corporations that profit from war, fraud, environmental, human rights and other abuses, provides this definition of greenwashing:

“any attempt to brainwash consumers or policy makers into believing [that corporations are] the key to environmentally sound sustainable development.”

Source: CorpWatch. Accessed March 3, 2011.

Academic researchers, Lyon and Maxwell, suggest that corporations selectively provide positive information about their performance and leave out the negative information.  They provide a contrasting definition:

“Companies present positive information out of context in a way that could be misleading to individuals who lack background information about the company’s full portfolio of activities.”

Source:  Lyon, T. P. and Maxwell, J. W. (2006, p. 5). Greenwash: Corporate Environmental Disclosure under Threat of Audit, Stephen M. Ross School of Business at the University of Michigan Research Paper Series No. 1055. p.5.

Companies would like their reports to possess the positive characteristics, but due to lack of extensive experience in reporting, different value sets, and the sophistication of companies’ information systems, most reports fall somewhere between these extremes.

For more information on greenwash, see BSR’s report: Understanding and Preventing Greenwash: A Business Guide.