By Tom Idle, Sustainable Brands
As advertising regulators, consumer watchdogs and even governments take a tougher stance, the risks of getting it wrong grow significantly; and the pressure is on communicators to up their game and back up their claims.
It’s officially, and legally, getting harder for brands to greenwash. In Europe, the EU Parliament has just voted to ramp up regulation to deter companies from making ‘carbon-neutral’ claims that can so easily mislead consumers into believing the products they are buying are good for the environment. Proposed new anti-greenwashing rules – said to represent a “significant victory for consumers and the environment” – were voted by an overwhelming majority of 544 votes in favour, 18 against and 17 abstentions.
This paves the way for EU nations to adopt their own laws that will ban dubious claims and “strengthen the fight against greenwashing by banning practices that mislead consumers on the actual sustainability of products,” as put by EU Justice Commissioner Didier Reynders. The move will effectively ban the use of generic ‘green’ marketing claims such as ‘environmentally friendly,’ ‘natural,’ ‘biodegradable’ and ‘eco,’ if they are not supported by evidence. Brands won’t be able to suggest a whole product or service is ‘sustainable’ when only a part of it is, either. And only official sustainability certification schemes will be recognised when it comes to marketing claims.
Where carbon offsetting is used, companies will no longer be able to make ‘net-zero’ or ‘carbon-neutral’ claims, which have long been criticised by campaign groups for seriously misleading consumers. In fact, banning the use of offsets as the basis for carbon-neutral claims is already happening. In the UK, the Advertising Standards Authority has spent the last six months reviewing the landscape and is about to commence stricter enforcement procedures. Brands are set to be banned from declaring their products or services are carbon neutral using offsets, unless they can prove they are actually working. This has coincided with a renewed focus on the true impact of offsets. In January, a Guardian investigation found that 90 percent of the rainforest project-derived offsets generated by Verra, one of the world’s biggest offset certifiers, were “worthless.” Verra strongly disputed the findings, but it got the world talking — not only about the value of offsetting, but the validity of making carbon-neutral claims more generally.
Greenwash clampdowns are also underway in the UK investment scene. The fact that so-called ‘sustainable’ pension funds are still entrenched in oil and gas firm funding has prompted the UK’s Financial Conduct Authority to publish anti-greenwashing rules designed to clean up the labelling of investment funds.
In the US, the Federal Trade Commission has updated its Green Guides for the first time in more than a decade, with a similar goal – to make it harder for companies to fall into the trap of making overblown sustainability claims about the products and materials they use.
Obviously, it will take time to completely stem the tide of greenwash; but incoming regulation and improved standards are having the desired impact, as evidenced by recent action taken to halt greenwash from the likes of airlines including Etihad and Lufthansa. Yet, in the race to win more savvy consumers and meet increasingly ambitious sustainability goals, avoiding greenwash remains a challenge. Even companies forced to row back on their ambitions face huge scrutiny. Just look at the backlash footwear business Crocs received this week having announced plans to push back its net-zero target from 2030 to 2040 after recording a 45.5 percent increase in absolute emissions year-on-year after acquiring another company. The new goal might be “more credible and realistic;” but consumers expect more transparent and sophisticated communications from brands.
And that is proving to be a real struggle. New research suggests that while marketing professionals acknowledge the need to be braver when it comes to sustainability communications to avoid greenwashing, more than a third of them lack the capacity or knowledge to do so. At a time when more brands claim to have a sustainability-related story worth sharing (41 percent versus 25 percent in 2021), the survey suggests the situation is getting worse; capability gaps were cited by 35 percent of respondents, versus 20 percent in 2021. This is especially a concern given that more brands have sustainability as a KPI in their marketing functions – up from 26 percent in 2021 to 43 percent today: “It’s remarkable that even though 94 percent of marketers are willing to be brave to drive transformative change, organizations still behave in the same way,” says Ozlem Senturk, a senior partner with Kantar, which was behind the research.
This research echoes the key findings of a recent Chartered Institute of Marketing survey, which showed half of companies were reluctant to work on sustainability campaigns for fear of getting tripped up and accused of greenwash.
As with many sustainability challenges, solving the greenwash problem can benefit from a collaborative response. That’s certainly the view of the team behind Creatives for Climate — which has just launched a new platform designed to help communicators ‘reskill’ for sustainability communications. The website features a training program called Greenwash Watch — which provides a useful analysis of anti-greenwashing regulation and rulings and provides a framework from which to craft credible strategies that do not mislead consumers.
As advertising regulators enforce tougher sanctions, consumer watchdogs get more savvy and even governments double-down on their efforts, the era of unsubstantiated green claims from corporates is over. But as the risks of getting it wrong grow significantly, the pressure is on communicators to up their game and be sure to back up their claims.