How to avoid greenwashing claims3 min read

Some companies believe that it is enough to demonstrate a bogus commitment to the environment and the planet to improve their reputation and corporate image.

This is the phenomenon of greenwashing in a nutshell.

Nowadays, pursuing “green” strategies is not just a trend, but a practice required by the market in some cases.

Just think of the recent SEC proposal on climate change disclosures on March 21, 2022, that would require public companies to disclose extensive climate-related information in their SEC filings.

Greenwashing is to all intents and purposes a deceptive practice, used as a marketing strategy by some companies, to demonstrate a false commitment to the environment. The aim is to capture the attention of consumers who are attentive to sustainability and who today represents a good slice of the audience. It is done through campaigns and advertisements or in some cases even social responsibility initiatives.

Considering an ever-increasing demand for products and services that reduce damage to the environment or have a positive effect on it, in fact, there is a proliferation of products, services, and companies that claim to satisfy this request.

Competition and Markets Authority

In January 2021 the Competition and Markets Authority (CMA) – the competition regulator in the United Kingdom – coordinated a global review of randomly selected websites. Outcome? CMA found that 40% of green claims made online could be misleading to consumers. These included:

• Vague claims and unclear language including terms such as “eco” or “sustainable” or reference to “natural products” without adequate explanation or evidence;

• Brand eco logos and labels not associated with an accredited organization;

• Hidden or omitted information, such as a product’s pollution levels, to appear more eco-friendly.

It is no coincidence that CMA published a Guidance for businesses making environmental claims in the UK in September 2021. This follows the CMA’s investigation into misleading environmental claims and the growing focus across Europe on sustainability claims.

CMA guidance on environmental claims on goods and services wants to help businesses comply with their consumer protection law obligations, by reducing the risks of greenwashing, unfair competition, and consumer fraud.

But what are these principles and what should the claims be like?

1. Truthful and accurate;
2. Clear and unambiguous;
3. Not omit or hide important relevant information;
4. Fair and meaningful comparisons;
5. Consider the full life cycle of the product or service;
6. Substantiated.

Greenwashing claims guidelines

When claiming green, eco, or sustainable statements or numbers:

• Be able to confidently answer the six questions of the Green Claims Code;
• Make sure to provide objective evidence to support and validate the claims, including easily accessible links for stakeholders;
• Ask to see information that validates claims, even from outside sources, to be sure the message hasn’t changed from person to person;
• Correct claims if necessary to ensure compliance with laws and regulations;
• Stop making false or misleading claims.

Advice and full guidance can be found on the CMA website (The Green Claims Code checklist).

On the other hand, try to best avoid:

• Using generic words like recyclable, organic, ecological, etc. unless the use of those words can be validated;
• Using generic marketing labels or practices, such as eco, green, field images, etc., which cannot be supported by facts;
• Making claims based on ambition without having a strategy that demonstrates exactly how to reach, measure, and report those claims;
• Making claims that include emissions without information (even more so if they are scope 3 emissions not supported by data from external vendors).
  
  

Avoiding false and biased claims in the green, eco, and sustainability areas requires honesty, transparency, and commitment. But following the above principles is a good starting point to reaching the final goal. And act in the company’s best interest.

Tell the real company’s sustainability story and avoid greenwashing. Transparency is an evergreen value that always pays off.

Featured image by engin akyurt on Unsplash
Source: CMA guidance on environmental claims on goods and services, CMA, September 20th 2021