What is “Impact Washing”?

Meaning and how to avoid it

You’ve probably heard about “greenwashing” in the past. Yet today, the focus is shifting from environmental sustainability alone to a much broader, more comprehensive notion called “impact”. And, just like any other emerging trend, it comes with positives as well as major risks. Speaking of which, what does “impact washing” precisely mean? How to spot it and eventually tackle it? Well, let’s find that out!

First things first: defining “impact”

These days, there’s a lot of talking about “impact“. But where does the term come from and what is its exact meaning?

“Social impact” was first mentioned in 1969, during a seminar on ethical investments held at Yale University. Institutions and public authorities began to use this term soon afterwards, but it’s only in the last decade that it caught the attention of businesses and firms too. Although a universally agreed definition is still missing, “social impact” usually refers to the changes and long-term effects on people and communities caused by either private organizations and public interventions.

>> We further discussed the notion of “social impact” and “social impact mission” in this article. Feel free to check that out too 😉

Impacts could be positive or negative, direct or indirect, just like explained in this article provided by Sopact. As you may guess, companies should strive to generate positive ones, while reducing negative externalities.

In recent times, the urge to tackle complex, social problems crossed paths with the challenge of climate change. So today, we can safely claim that “impact creation” more generally relates to determining positive, intentional long-term effects on both people and the environment. As a consequence, we consider “impact enterprises” those companies specifically created to address (and hopefully solve) societal threads.

“Impact washing”: what is it?

Now that we briefly introduced the concept of “impact”, let’s discuss what “impact washing” is. The notion may be unfamiliar to some, but it is actually not that hard to grasp.

As a matter of fact, we see “impact washing” each time companies, investment funds or institutions make impact-oriented communications and claims without the support of evidence. Here, products, services, strategies and interventions tend to be presented as triggers driving positive changes, while misrepresenting and downplaying facts that counter such claims.

Examples of that may include some fast-fashion firms selling “sustainable, up-cycled clothing” while constantly ignoring negative implications of their current operations and logistics. Or even corporations promoting charity projects and simultaneously maintaining unbearable working conditions for their employees.

Thus, in a nutshell, impact washing is nothing but disinformation. Disinformation intentionally disseminated by organizations, institutions as well as investors who aim to falsely present a conscious, responsible, impact-focused public image. Something that eventually may lead to dramatic consequences.

Main risks associated with “impact washing”

As anticipated, whether it’s driven by ignorance, lack of understanding or malicious intents, impact washing comes with major risks. Here, we analyze some of them, even though the list may go on and on.

Impact dilution. Like some would say, “if everything is impact, nothing really is”. By diluting the notion of “impact creation”, eventually change-makers, social innovators and supposed self-proclaimed ones would be all considered just the same. Likewise, projects and interventions leading to marginal (if not negative) changes may get mistaken for those that are truly able to foster transformative, positive impact on the world.
Squandering resources. As an increasing number of public and private financial institutions finally put impact creation at the top of their priorities, it’s key for them to understand where true impact lies. In fact, impact washing is constantly fueled by distortions and misleading claims. As a consequence, investors and authorities can wrongly allocate economic resources and eventually fail to support radical, impact-focused innovations.
Mass confusion and distrust. Just as discussed above, impact washing is often used to manipulate the public perception of organizations and brands. Eventually, this might lead to massive distortions and confusion. So, if impact washing becomes the norm rather than the exception, people and consumers may find it hard to choose and consume in a more conscious, sustainable manner.

How to avoid “impact washing”?

In a recent survey, GIIN addressed possible strategies and solutions for impact investors to mitigate the risk of impact washing. And we believe some may apply to practitioners and public authorities too.

For instance, third-party certifications for impact-oriented projects and enterprises could be an opportunity to explore. Also, voluntary commitments to codes of conducts and greater transparency in strategies and operations are alternative, viable options.

Eventually, it all boils down to making companies and practitioners accountant and responsible for their actions, especially when they “talk impact“. Traditional and emerging impact assessment frameworks are paving the road to that, although there’s still a long way to go.

Conclusion

In this article, we discussed what “impact washing” is and what are the main risks associated.

We truly believe that impact washing demands safeguards and that public awareness of this topic could avoid market distortions and negative outcomes. When it comes to Impact Jungle, the goal of this platform is to contribute spreading notions, tools and best practices coming from the field of social innovation and impact entrepreneurship. We’ll do our best to fulfill such mission and empower readers to easily identify and understand where true impact lies 🙂

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