Ask Oxano Series: Greenwashing or Real Impact?

Ask Oxano Series: Greenwashing or Real Impact? 

Sustainability has grown to be a buzz word!  From boardrooms to startups, everyone seems to be claiming they’re green, ethical, or impact-driven. And on the surface, that’s good news but when sustainability becomes a branding strategy instead of a business strategy, we risk falling into a dangerous trap: greenwashing.

As investors and entrepreneurs navigating this evolving landscape, it’s time to look beyond the glossy labels and ask the hard questions: Is this real impact, or just really good marketing?

What Exactly Is Greenwashing?

Greenwashing is the practice of misleading stakeholder; consumers, investors, or the public by making false or exaggerated sustainability claims.

Sometimes it’s subtl when  a company that highlights a recyclable product line while dumping waste in its supply chain. Sometimes it’s brazen like those carbon neutrality claims that rely entirely on unverified offsets. And sometimes it’s just empty buzzwords like “natural,” “ethical,” or “eco,” with no standards behind them.

Greenwashing is by no means a new concept. In fact, it dates back to the 1980s, when misleading green claims spread even before the term was coined. Back then, companies praised the virtues of nuclear energy with questionable corporate motives. The term "greenwashing" was coined in 1983 by Jay Westerveld, after staying at a resort in Fiji that urged guests to reuse towels “to save the planet,” all while the resort was expanding with little environmental concern.

Regardless of the form, the outcome is the same which is a illusion instead of transformation.

Why Greenwashing Matters for Investors?

Greenwashing distorts the very purpose of impact investing. When funds flow toward “green” companies that aren’t actually reducing harm or driving change,capital is misallocated, and real solutions get crowded out.

There’s also growing regulatory and reputational risk. As governments tighten ESG regulations and watchdogs crack down on misleading claims, investors could be exposed through their portfolios.

Beyond that, ESG inflation where everything claims to be sustainable creates noise in the market. It becomes harder to distinguish true impact, eroding trust in the entire sector.

Why Entrepreneurs Should Care?

If you're building a startup today, there's a high chance you're integrating impact into your mission and that’s great. But beware: overclaiming or under-delivering on impact can backfire fast.

In an era of radical transparency, greenwashing can destroy brand credibility. Investors are becoming more rigorous in their due diligence. They want to see how you measure impact, what frameworks you use, and how it ties into your core model.

The startups that win long term aren’t the ones with the flashiest pitch decks. They're the ones with integrity, substance, and measurable outcomes.

So What Real Impact Actually Looks Like?

It starts with clear, transparent metrics. Whether it’s tons of CO₂ avoided, clean energy generated, or smallholder farmers supports numbers matter.

Third-party verification is another key. Certifications like B Corp, Science Based Targets, or CDP give credibility to claims and ensure accountability.

True impact also means taking a lifecycle view understanding not just your product, but the footprint of how it's made, used, and discarded. And importantly, owning the trade-offs. No solution is perfect. But founders who acknowledge limitations and show how they’re working on them build more trust than those who pretend there are none.

The Path Ahead

The green transition is one of the most important transformations of our time. But it must be grounded in truth, data, and accountability. Greenwashing might win in the short term. But in the long term, real impact is what builds value, trust, and resilience.

Here at Oxano, as impact-driven entrepreneurs and investors, we put authenticity, transparency, and measurable impact at the center of how we evaluate ventures. We call on fellow entrepreneurs to do the same  to build ventures that go beyond surface-level claims and drive real, lasting change. 

If you are up for this, get in touch.