Modern consumers increasingly demand that companies be conscious of their social and environmental impact, and are no longer satisfied with empty marketing promises; they want to see proof that their purchase is making a difference. Coupled with the internet’s relentless ability to surface the truth, customers can see through empty campaigns. As a result, companies are forced to become transparent and accountable about the impact they’re having if they want to survive. This, along with the increased interest in impact investing (investing in a company for measurable financial AND social/environmental gain) claiming impact has become increasingly trendy and lucrative. Enter impact washing, the practice of overstating or falsely claiming benefits of a product/service to sell more of it.
Impact washing happens for many reasons, some of which are:
- Companies focused on riding a new wave to profit will exaggerate or even make up impact to sell more products.
- Well-intentioned but ill-informed companies claim more impact than their product actually creates.
- Impact is a relatively new and complex field that leaves room for interpretation, which can create wishful thinking but misunderstanding.
- Consumers don’t fully understand impact and how it works so they may make assumptions based on little evidence and companies don’t correct them.
What’s the harm in a little impact exaggeration?
Well, if you thought you were getting this:
and showed up to this:
You’d be pretty bummed out to say the least, right?
This impact exaggeration also makes the actual impactful products harder to find amongst the noise, and warps everyone’s expectations of what impacts are realistic and trackable.
The good news? Impact washing isn’t usually that difficult to spot if you know what to look for. Typically a product will claim they have an impact, but won’t have any evidence to back it up. When someone is bluffing, start pulling the threads of their story apart. They should be able to answer questions like;
- What are the outcomes?
- Who is it affecting and how much?
- What are the long term effects?
If someone has done the work of measuring their impact, they should not only be able to answer these questions, but also want to have conversations about it. People who know what they’re talking about usually want to keep talking about it. At its core Impact should be transparent and auditable allowing everyone to see the opportunities/risks together and build new even better solutions.
How do organizations avoid impact washing? Impact washing isn’t always intentional. So like your grandparents taught you, “if you don’t actually know your impact, don’t say anything about impact at all”. If you have done some impact measurement or at the least have a theory about the impact your products create, say that. Be clear about what you know and don’t know. It is easier to claim imperfection or that you’re striving towards understanding than it is to battle your way out of claiming perfection too early.
As for good measurement frameworks to start with, the United Nation Sustainable Development Goals and Impact Management Project Five Dimensions of Impact can help create a common understanding. Beyond that, impact management is a complex discipline that pulls together social science research, applied economics, and a whole host of other skill sets. Experts will consciously take steps not to overstate or overpromise impact. Using a third party can also help ensure that the analysis is objective and there’s no pressure to exaggerate for selling purposes.
Impact washing is dangerous to the growing industry of impact measurement because it creates skepticism. It takes credibility away from people who truly care about the impact they’re having and working on managing it.