Products wrapped in green packaging or sporting impressive assemblages of (at times questionable) environmental labels are a frequent sight nowadays – and not without reason. People around the globe are becoming more conscious about their consumption patterns, and many actively look for more sustainable alternatives.
While the shift we’re seeing in consumer behavior sparks hope for the future, it is a double-edged sword, which on its dark side motivates brands to push their sustainability marketing to the next level in efforts to stay competitive on the market.
In this post, we together with our consultant Bea Vanhala discuss upcoming anti-greenwashing legislation, what businesses need to be aware of when making environmental claims, and how to successfully manage the seemingly ‘damned-if-you-do, damned-if-you-don’t’ landscape of sustainability communications
Green is the new gold in marketing
If you are someone who cares even just a little bit about the planet, you’ve probably caught yourself gravitating towards products or services claiming to be “green” when you’ve had to make a purchasing decision. And you’re not alone. A global study by Microsoft Advertising and Dentsu International confirms that green indeed sells – 88% of the consumers surveyed said they will make sustainable purchases whenever possible. 77% said, that they in 5 years’ time only want to be spending money on sustainable brands (– or those, that market themselves as such).
“It is positive that people around the world want to consume sustainably. However, we shouldn’t ignore that many aren’t willing to do so when it comes with a cost – according to the report, only 30% would buy the greener but also pricier alternative,” Bea comments.
“But what worries me most about this fact is not that people prefer the more affordable option. It is that findings like these incentivize greenwashing, so the (sometimes even unintentional) false labelling of a brand, product, or service as more sustainable than it actually is,” she adds.
In 2021, the European Commission and national consumer authorities proved that greenwashing is not an unjustified concern, as they through an extensive screening found that 42% of green claims made online were exaggerated, false, or deceptive.
“Greenwashing can have far-reaching consequences, and not only in reputational and legal terms. Above all, it misleads consumers into acting in unsustainable ways, which in turn has negative spillover effects on people and the planet,” Bea adds.
Things are cooking on the legal front
Luckily, the European Union is working hard to combat just that. In March of last year, the European Commission proposed amendments to two already existing directives – the Unfair Commercial Practices Directive (UCPD) and the Consumer Rights Directive – which if approved, could ban various unethical practices under the bigger umbrella of greenwashing. These include misleading consumers by making vague and unsupported environmental claims (“green”, “climate friendly”, and “ecological” being on the list of words to watch out for) or using optional sustainability labels which aren’t based on third-party verification or established by a public authority. If, or rather when, the proposed regulation becomes reality, failure to comply with it could result in damage claims, significant fines, or even confiscation of profits.
“Also, making an environmental claim about the entire product when it only concerns a certain aspect of it might soon be something that could land you in legal trouble. For example, you shouldn’t market something as ‘made with recycled material’ if the statement only holds true for the packaging,” Bea adds.
While currently still a proposal, an agreement could – in the best-case scenario – already happen in the end of this year. However, even so, it is unlikely that the amended legislation would be formally adopted by member states before 2024-2025.
“Although robust anti-greenwashing legislation is not a reality quite yet, companies that want to stay on the safe side and ahead of the curve should really follow the mantra of ‘treating tomorrow’s regulation as today’,” Bea comments.
Be aware of green-hushing – the antithesis of greenwashing
For those now thinking to themselves “so, how does one successfully communicate around sustainability then?” Bea has the following to advice:
“For starters, you need to ensure that you’ve got the right data to back up your sustainability claims with, and that you’re compliant not just with current but preferably also with upcoming regulation. Do not let this intimidate you into the trap of ‘green-hushing’ though, which means keeping silent about one’s climate commitments altogether due to a fear of being called out – either for unknowingly exaggerating one’s claims, or for not being ambitious enough.”
According to a recent report by carbon finance consultancy South Pole, green-hushing might be a growing phenomenon. While the findings indicate that setting science-based climate targets with a clear target date now seems to be standard practice across industries, nearly a quarter of the 1,200 executives surveyed admitted that they did not plan on openly communicating their climate milestones beyond what is required.
This is problematic for a number of reasons – not only does silence create knowledge-gaps and contribute to an inaccurate picture of the overall corporate sustainability landscape, but it also doesn’t push the market nor incentivize competitors to stay on top of their game. Other knock-off effects mentioned by the report authors could be the limitation of knowledge-sharing on decarbonisation and missed collaboration opportunities between industries.
Honestly, honesty goes a long way
This ties into the second (and for the sake of length now also last) piece of advice that Bea has for companies hoping to improve their sustainability marketing, which is to communicate truthfully.
“As long as you’re remaining factual, you don’t need to have made the most ground-breaking progress to start communicating about what you’re doing on the sustainability front. Actually, I would go as far as to say: don’t shy away from exposing things that might even make you ‘look bad’ at first glance. Admitting that you’re not perfect (which by the way no brand can claim to be) shows that you’re aware of your shortcomings and take accountability for them – and that creates credibility and trust.”