Greenwashing strategy and environmental obligations : the Volkswagen case

Abstract

The existing European legislative framework with regard to the environment involves constraints that are perceived as hindrances to the cost-benefit analysis by some companies and business groups. For example, the Volkswagen failure to comply with such obligations by using a sophisticated greenwashing strategy in order to increase its profits on the Diesel cars sold in Europe and United States shows an obvious reluctance to cover the costs required by the environmental laws. The same tendency is revealed by the lobbying against EU environmental policies by some trade associations financed by multinational corporations which otherwise claim to support sustainable development. Companies thus tend to promote their short-term goals against the public interest, by either avoiding or trying to relax environment-related legal constraints. This article will argue for the need to elaborate a new approach to environmental obligations which would tie both short-and long-term interests to sustainable policies, by spelling enforceable measures to tax carbon release, pollution, and production of fossil-fueled products. The Volkswagen case will be discussed in order to make clear that once they are exposed by the media, greenwashing strategies are more counter-productive for a company than genuine sustainable policies. Finally, the article will show how the customers' expectations for environmentally friendly products challenges the traditional cost-benefit analysis and how the enforcement of environmental laws could make environmental obligation, besides a moral duty, a tangible and measurable business goal.