How Traceability Technologies Reduce Greenwashing in Supply Chains
Today’s consumers want sustainable options. To compete, many companies — intentionally and sometimes unintentionally — engage in greenwashing to make their products and processes appear more sustainable than they are. Traceability technologies reduce greenwashing in supply chains by highlighting opportunities for improved efficiency and offering consumers greater transparency.
What Is Greenwashing?
Greenwashing occurs when companies make unfounded claims to promote their products or processes as eco-friendly. Commercial greenwashing strategies use misleading language or imagery to capitalize on today’s consumer desire for sustainable products. Companies can use terms like “sustainable,” “green”, and “environmentally friendly” that rhetorically signal sustainable practices but bear no legal weight.
As the public’s awareness of climate change increases, some businesses use greenwashing to profit from environmentally conscious consumers without employing sustainable practices.
Chevron’s “People Do” campaign is an older but famous instance of greenwashing. The campaign — launched in the mid-1980s — celebrated Chevron’s environmental commitment by showcasing its protection of the wildlife surrounding its facilities. However, consumers later accused the oil company of misrepresenting itself as sustainable.
More recently, Volkswagen paid $4.3 billion in 2017 for violating the Clean Air Act by equipping around 590,000 of its vehicles with software designed to cheat emissions tests.
Why Is Greenwashing a Problem in Supply Chains?
Greenwashing takes market space from sustainable businesses, shirks companies’ environmental responsibilities, and misleads consumers. It is a common problem in supply chains because vendors can pretend to use sustainable practices or claim they have environmental certifications they don’t.
Sometimes, companies unknowingly engage in greenwashing. They may communicate to consumers that their goods and practices are sustainable, not knowing that their materials or products have circumvented environmental parameters and entered the supply chain.
As greenwashing becomes a bigger problem, organizations like the U.S. Environmental Protection Agency (EPA) are creating stricter regulations. The EPA has been committed to protecting consumers from toxic polyfluoroalkyl substances (PFAS) and recently added nine PFAS to a growing list of chemicals covered by the Toxics Release Inventory (TRI).
Companies must report their use of chemicals listed on the TRI to the EPA. As of 2025, companies must include these nine additional PFAS in their reports for the EPA to evaluate their practices and protect the public.
Some companies “green hush” — the practice of intentionally keeping sustainability goals and practices quiet to avoid accusations of greenwashing. However, this doesn’t help consumers make environmentally conscious decisions. It can also harm a company’s ability to identify opportunities for increasing sustainability in its supply chain.
What Is Traceability Technology?
Traceability technology traces raw materials — their origins, use and discardment — and products as they move through a supply chain. The supply chain deals with the making and delivery of a product, while the value chain looks at how to increase a product’s value as it moves through. Traceability technology focuses on the supply chain, but it also helps companies enhance their value chain.
Traceability technologies can resolve and decrease product recalls, which increased by 11% in the United States in 2023 alone. Tracing products as they move through the supply chain allows companies to monitor and address quality concerns early. In the case of a product recall, this tech lets businesses accurately track and retrieve the affected items.
Barcodes, QR codes, and RFID tags identify products and batches as they move through the supply chain. Barcode scanners and RFID readers read and record the data. Companies also use laser marking to trace products. Its resistance to heat, wear, and chemicals makes it ideal for long-term tracing.
GPS is also a traceability technology. It helps companies track their delivery vehicles and product containers through the production and supply chain process.
Blockchain is another popular option. It stores connected transactions, making it easier to track a product’s environmental impact. Blockchain can also track carbon emissions and verify a product’s sustainability.
How Does Traceability Technology Reduce Greenwashing?
Traceability technology helps companies meet broader objectives like efficiency, responsiveness, and sustainability. With the information they gain about sourcing practices and conversion methods, company executives can optimize their supply chain to adhere to government regulations, increase sustainability, and decrease waste and carbon output.
Supply chain emissions are typically 11.4% higher than direct emissions, making traceability technology that targets supply chains a massive opportunity for sustainability. Traceability technology allows a company to be transparent with customers, growing a larger consumer audience and satisfying the public’s desire for sustainable options.
Digital traceability promotes radical transparency. In this spirit, some brands—like Ikea, a Swedish furniture company, and ASKET, a menswear company—have shared their carbon emissions reports with customers.
Other brands have exhibited impressive effort and patience to ensure sustainable practices. For example, Everlane — an American clothing retailer known for its commitment to sustainability — did not introduce denim to its collections until founder Michael Preysman partnered with Saitex, a factory that recycles 98% of its water in Vietnam.
Tracing and Sharing Green Data
Sustainable supply chain processes benefit consumers, companies, and the environment. Traceability technologies are changing the game by encouraging businesses to choose transparency over greenwashing. By adopting these technologies, they can make more intentional production choices and contribute to efforts for a greener world.