The Effects of Greenwashing on Circular Consumption: Comparison
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Please note this is a comparison between Version 2 by Wendy Huang and Version 1 by João M. Lopes.

Circular consumption entails tactics like reusing, recycling, and repairing to minimize waste and optimize resource usage. Greenwashing, in contrast, pertains to the use of false or overblown environmental claims by companies wanting to capitalize on consumers’ rising environmental concerns. Green consumption has become a desirable and environmentally harmless political and economic assumption. Yet, concerns are being raised due to the emergence of greenwashing practices, which challenge the credibility of companies’ environmental claims. 

  • greenwashing
  • circular consumption
  • circular economy
  • environmental concerns
  • environmental resources

1. Introduction

In our modern society, topics such as greenwashing and circular consumption have risen to greater significance. Putting the focus on reducing waste and promoting resource reuse, circular consumption has emerged as a sustainable practice [1,2][1][2]. Meanwhile, companies that mislead consumers regarding their environmental practices or product benefits fall into the category of greenwashing. An economy that prioritizes the principles of circularity strives to separate the creation of value from the generation of waste and the use of resources, transforming the ways in which production and consumption are approached [3]. In achieving circular consumption goals, the problem of greenwashing has emerged as a considerable hurdle. To create a false impression of their environmental benefits or impacts, companies employ greenwashing tactics, which has resulted in a lack of consumer confidence and increased confusion [4].
The World Bank [5] released data on the circular economy in the European Union, highlighting that total material use in the EU has decreased by 9.4% over the past two decades, whereas the percentage of resources derived from recycled waste has increased by almost 50%. However, the global economy is still only 9.1% circular, which represents a huge circularity deficit [6]. To combat this, Gatzer et al. [7] indicated that the share of circular consumer goods could increase from the current 10% to around 25–35% by 2030. The transition to a circular economy is crucial to ensuring the sustainability of the planet and the continuity of economic activities. Consequently, according to Szilagyi et al. [4], individuals who are environmentally conscious are more inclined to purchase circular products. Furthermore, consumers are now more cognizant of the impact of their decisions on the environment and are actively seeking out products that align with their values. In fact, Netto et al. [8] indicated that consumers are happy to pay a higher price for eco-friendly products. However, the challenge of greenwashing arises, making it difficult for consumers to make informed purchasing decisions [1].
In this context, circular consumption practices and the deceptive tactic of greenwashing are intricate subjects that require our attention as conscientious consumers. It is crucial for consumers to be aware to avoid falling into the trap of misleading eco-friendly advertisements used by companies [8,9][8][9]. To counteract greenwashing, companies must exhibit transparency and be held accountable for their environmental claims. By supporting sustainable businesses and embracing circular consumption, you can proactively work towards a more sustainable society [10,11][10][11]. There are several examples of greenwashing used by companies to encourage the consumption, such as (i) powerful images that companies use related to ecology and nature to convey that they are responsible and environmentally aware; (ii) misleading labels claiming that products have environmental benefits; (iii) certifications that do not exist on how the products are natural and sustainable; (iv) red herrings to try to divert consumers’ attention, highlighting aspects of the products as ethical and sustainable; and (v) approximate terminology with self-denomination by companies that their products are green [12].
In the realm of sustainability, circular consumption and greenwashing have gained significant attention. The recent study by the European Commission [13] revealed that 80% of online shops, web pages, and advertisements searched contained green claims such as “green” or “friendly to nature”, of which 55.45% were implicit (images, design, and color suggesting environmental benefits), 35% were explicit (logos and labels), and 21% were vague or general environmental claims. In a study carried out within the scope of a mystery shopping action in 2022 in the European Union, 150 environmental claims were evaluated, with 53.2% (more than half) of the ecological or sustainable claims of products and services being considered unfounded, vague, and even misleading regarding the ecological characteristics of the products [13]. Consequently, the proliferation of non-transparent online information about the sustainability of products was identified by 11% of consumers as the biggest obstacle to their participation in the circular economy [13]. These problems are identified as market failures and an insufficiently adapted legal framework.
Some studies have explored the relationship between greenwashing, circular consumption intention, environmental concerns, and the influence of information on environmental resources. Szilagyi et al. [4] determined through their study that the perceived greenwashing by consumers of an institution is strongly impacted by environmental concerns. Zhang et al. [15][14] found that the perception of greenwashing has a direct negative effect on the intention to purchase green products, as well as an indirect negative effect via word of mouth about green products. Pagiaslis and Krontalis [16][15] discovered that concern for the environment has a positive and direct effect on environmental knowledge, beliefs, and behavioral intent. Liobikienė and Poškus’ [17][16] study also documented that environmental concern had a direct impact on the public sphere and an indirect effect on personal behavior via the awareness of behavioral consequences. Kilbourne and Pickett’s [18][17] study found that materialism had a negative impact on environmental beliefs, and these beliefs had a positive effect on environmental concern and environmentally responsible behavior. Minton and Rose [19][18] stated that the personal norm had the greatest influence on environmentally friendly consumer behavior, whereas attitude had the greatest influence on consumers’ intended behavior. Nguyen, et al. [20][19] observed that the attitude toward purchasing green products, behavioral control, social influence, and knowledge regarding green products are all significant in influencing consumers’ desire to purchase green products. However, environmental concern is not directly related to consumers’ desire to be green. Nguyen et al. [20][19] found that the perception of greenwashing diminishes the effects of environmental concern regarding green behavior. These observations accentuate the necessity of grasping the influences that affect consumers when they choose to engage in circular consumption and the consequences of greenwashing on those decisions. 

2. Greenwashing in Circular Consumption

The growing phenomenon of “greenwashing” has recently attracted the attention of consumers and academics [14][20]. Misleading consumers about a company’s environmental practices or products is defined as greenwashing [8]. Furthermore, greenwashing can be viewed as a non-genuine form of corporate social responsibility that can harm both consumers and society [25][21]. The examination of how greenwashing affects environmental concerns and consumers’ circular consumption intention has been researched [14,26,27][20][22][23]. Studies indicate that perceived greenwashing practices have an adverse effect on consumers, whether it be directly or indirectly [14,28][20][24]. Those who perceive that most corporations utilize greenwashing tactics are more eco-conscious and more inclined to participate in circular consumption behaviors [26][22]. Thus, the perception by consumers that companies are involved in greenwashing practices awakens consumers to greater awareness and environmental concern, impacting their intention of circular consumption. Therefore, the relationship between greenwashing and circular purchase intention is not always direct and may be mediated by consumers’ environmental concerns [15,23][14][25]. Junior et al. [29][26] found that when greenwashing is recognized in a product, its aspects of loyalty, satisfaction, and benefits are lost, and it becomes a product that causes confusion in the consumption of it. Bulut et al. [30][27] documented that the perception of greenwashing diminishes the effects of environmental concern on green behavior. Zhang et al. [15][14] affirmed that the perception of greenwashing has a direct negative effect on green purchasing intent, as well as an indirect negative effect via green word of mouth. Not to mention, greenwashing can give rise to distrust in companies and their environmental assertions, leading to negative impacts on the company’s status and sales [27][23]. In the literature, instances of greenwashing by various industries have been recorded. For example, the fashion industry has faced scrutiny for utilizing ambiguous and deceptive environmental assertions, like “eco-friendly” or “sustainable”, without offering any substantiation [23][25]. Correspondingly, the food industry has been reproached for utilizing misleading labels, such as “natural” or “organic”, which may not honestly encapsulate the product’s environmental footprint [4]. As a whole, the literature indicates that greenwashing is a prevalent occurrence that can have detrimental effects on both consumers and society [31][28]. With consumers becoming more environmentally conscious, companies have been using greenwashing as a means of making exaggerated and false claims about their environmental practices [8]. This unethical practice has become more widespread, but it poses negative consequences for stakeholders, especially consumers [14][20]. As a result, consumers who believe that most companies are guilty of greenwashing tend to be more interested in learning more about the environment and its resources [32][29]. To avoid losing the support of eco-friendly consumers, it is essential for companies to provide accurate and transparent information about their environmental practices. Circular consumption can be affected by greenwashing, as it can lead to distrust between companies and consumers. If claims of being environmentally friendly are not credible, consumers may feel less compelled to engage in reducing waste and reusing resources [27][23]. Nonetheless, if companies are transparent and truthful in providing information about their environmental practices, it can encourage trust and promote circular consumption among consumers. Netto et al. [8] revealed an upsurge in interest in environmental resources due to the widespread prevalence of greenwashing. Therefore, researchers have been exploring the main ideas and impacts of greenwashing, leading to a greater emphasis on the significance of providing trustworthy and transparent details about environmental resources [8,26][8][22]. Furthermore, as consumers increasingly educate themselves about environmental matters, there is expected to be a growing need for truthful and transparent information concerning environmental resources [33][30]. Thus, consumers who perceive companies’ greenwashing practices tend to seek more pro-sustainable information to determine whether these practices are authentic and transparent rather than misleading [34][31]. According to Testa et al. [35][32], when consumers perceive that companies adopt greenwashing behaviors, they are more likely to seek information about the sustainable characteristics of products and services, reducing the negative effect these practices may have on their circular consumption. As such, the search for pro-sustainable information is encouraged by companies’ greenwashing behaviors and affects their intention of circular consumption [36][33].

3. Environmental Concerns in Circular Consumption

Transforming production and consumption patterns is the goal of the circular economy model, an effort to decrease waste generation and resource utilization [3]. Environmental concerns and the desire for circular consumption are two interdependent concepts that play a crucial role in this endeavor. Circular consumption intention refers to the willingness of consumers to engage in behaviors that support a circular economy, such as buying refurbished products, repairing items, and recycling [37][34]. Environmental concerns refer to the level of concern that individuals have about the impact of their actions on the environment. Some studies have demonstrated a positive relationship between environmental concerns and circular consumption intention [4,38][4][35]. Consumers with greater environmental concerns are more likely to have a greater intention of circular consumption [4]. Prados et al. [38][35] found that consumer awareness of environmental problems is key to promoting circular consumption. Similarly, Camacho-Otero etal. [3] found that sustainable consumption, which involves the relationship between consumption and sustainable development, is closely linked to circular consumption. The literature on consumer behavior and circular economy has also identified several determinants of green purchase intention, including environmental concerns [39,40][36][37]. Szilagyi et al. [4] developed a path model for purchasing circular products that takes into account environmental concerns. Bigliardi et al. [39][36] showed that environmentally conscious behaviors are positively related to green purchase intentions for refurbished smartphones. Therefore, it can be concluded that environmental concerns play a critical role in shaping consumers’ intention to engage in circular consumption behaviors.

4. Collect Information about Environmental Resources in Circular Consumption

Consumers who wish to participate in the circular economy model must have the ability to make informed decisions regarding their environmental impact. This is achieved by reducing waste generation and resource use through changing production and consumption methods, as explained by Camacho-Otero et al. [3]. Empirical studies have revealed that consumer acquaintance with the environmental consequences of their consumption habits can influence the acceptance of circular consumption [4,37][4][34]. Thus, access to environmental resource knowledge is essential to converting consumers into circular consumers. Gomes et al. [41][38] revealed that consumers who prioritize environmental impact are more inclined to participate in circular consumption practices. Borrello et al. [42][39], Duarte et al. [43][40], Hebrok and Boks [44][41], and Aschemann-Witzel et al. [45][42] also emphasized the vital role that consumers play in reducing waste and promoting circular behavior. Therefore, it can be stated that consumers’ environmental concerns directly shape their level of engagement with circular consumption practices. Access to reliable information on environmental resources can encourage and promote sustainable consumer habits. Studies have found that those who actively seek additional environmental information are more inclined to embrace circular consumption [3,4,35,37,41,46][3][4][32][34][38][43]. This research also demonstrates that consumers who prioritize eco-friendly product features are more likely to purchase circular products. With this in mind, making environmental information readily available is a practical approach to promoting circular consumption practices.

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