As Earth Day (22 April) approaches, environmental certification organisation Planet Mark has published a timely article on the problem of greenwashing.
Planet Mark provides a brief overview of greenwashing and some of its consequences, and then offers some tips on what organisations can do to avoid falling into the greenwashing trap.
Read the article below:
Shareholder pressure and consumer interest in sustainability are examples of motivating factors for companies to appear more environmentally friendly. According to Capgemini Research Institute’s annual consumer trends report, sustainability remains an important factor for consumers; with 41% of consumers stating they’re willing to pay more for a product they believe to be sustainable.
This can lend itself to companies greenwashing, putting out misleading, exaggerated or false environmental claims about a product or company’s environmental sustainability. In a 2021 study, the European Commission found 42% of green claims were exaggerated, false, or deceptive, which points to greenwashing on an industrial scale.
Consequences of greenwashing
Unintentional greenwashing can occur when companies have a limited understanding of sustainability or fail to verify their claims. However, a lack of understanding doesn’t excuse companies from the consequences that follow.
Greenwashing poses a significant threat to losing stakeholder trust. In 2015, Volkswagen was caught cheating on emissions tests to make their diesel vehicles appear environmentally friendly, despite making false claims. The resulting recalls and a massive hit to consumer trust cost Volkswagen $30 billion.
Getting it wrong on environmental claims also increasingly risks legal action. Regulatory bodies across Europe such as the Advertising Standard Authority are now turning their focus towards tackling deceiving environmental claims. Environmental claims must now comply with the UK Competition and Markets Authority’s (CMA) Green Claims Code, while the European Commission’s Green Claims Initiative has recently put forward proposals to establish a policy framework which will leave no room for overblown or inaccurate claims.
Most importantly, false environmental claims hinder progress towards decarbonisation and its impact. Failure to address greenwashing will confuse and create cynicism, undermining the efforts of true leaders to deliver urgent climate action.
Avoiding greenwashing
At times, it might seem ‘you’re damned if you do, and damned if you don’t’ when it comes to communicating your sustainability credentials. On one side, people want companies to be vocal about what they’re doing. On another side, people are ready to shout “Greenwashing!” if companies appear to overstep. This has given way to greenhushing.
The challenge facing companies today is how to effectively communicate their green credentials in a way that is perceived by consumers to be genuine and authentic. With Earth Day fast approaching, here are five tips to help you establish a credible platform to discuss sustainability-related topics:
- Be transparent and accessible
Make your claims clear and easy to understand without leaving anything up to interpretation. When describing your carbon footprint, detail all accounted emissions, including direct (Scope 1), indirect (Scope 2) and supply chain emissions (Scope 3). This provides clarity and transparency around your environmental impact.
Avoid using language that is difficult to define, such as acronyms or words like ‘eco-friendly’, ‘sustainable’, or ‘green’. While it’s essential to stay mindful of sustainability trends, it’s equally important not to blindly follow them. Rising buzzwords such as ‘plastic-neutral’ and ‘carbon negative’ can be appealing, but their use of offsets and lack of standardisation at the moment can potentially mislead consumers, as cautioned by the European Commission. These types of descriptions are vague and meaningless unless followed up with specific claims and the evidence to prove them.
Remember, every product has an environmental impact – never suggest that a product is ‘better for the environment’. Using humble communication can be more effective in building trust in your brand.
- Be credible
Keep current data available and update it on your website and anywhere else you make sustainability claims. Only use data that can be verified. Providing this proof – and keeping it up to date – will require effective collaboration between marketing and sustainability teams, so the first step for many will be an organisational change.
If possible, verify data with trustworthy third-party auditors or accreditations like Planet Mark, to ensure claims are credible and substantial. Report in alignment with globally recognised carbon reporting standards so you can communicate your progress with confidence and prevent accusations of greenwashing.
- Be honest and accountable
It’s important to be transparent about your progress towards sustainability goals, including what you have achieved and what you are still working on. Avoid presenting environmental work as a completed task and instead position it as a milestone in an ongoing journey. Share the whys and lessons learnt so other organisations can learn with you.
In the event of any communication errors, it’s important to take responsibility, apologise, and explain how you plan to correct the mistake. Maintaining an open dialogue with consumers, suppliers and shareholders about your progress can help to establish credibility and build trust.
- Educate yourself and your employees
The more people who are engaged with your sustainability strategy, the stronger it will be. Make sure that everyone in your organisation understands the fabric of your sustainability plan and the importance of accurate and honest environmental claims. Provide training and resources like an FAQ or a glossary to help your employees understand terminology such as the difference between carbon neutral and net zero.
- Focus on impact
Rather than making grand claims about your company’s environmental and societal impact, focus on tangible actions you are taking to reduce your carbon footprint, conserve natural resources or protect biodiversity, such as:
- Collecting emissions data and identifying areas with high emissions
- Increasing social value
- Setting net zero science-based targets or entering the Race to Zero
- Creating disclosure reports aligned with globally accepted reporting standards such as the United Nations Sustainable Development Goals.
- Support biodiversity and conservation through charities such as Cool Earth
- Engaging and communicating progress with internal and external stakeholders
