Sandy Dhesi, commercial manager at Ecoveritas, discusses the perils of embellishing green efforts and the need to deal in substance, or rather data, at a time of intense scrutiny for green claims in the UK and EU.
When a thing is true, there is no need to use any arguments to substantiate it. This is a mantra that is no longer fit for purpose.
While for good brands with good intentions, green claims laws promise very little change, for others, it spells complication. A headache that will likely cost far more than a box of paracetamol.
The era of vague claims such as ‘environmentally friendly’ is over. Misleading environmental claims are under the microscope: advertising regulators, consumer watchdogs and even governments are scrutinising them in sharper focus.
The risks of getting it wrong are huge, with brands being shamed publicly and trust evaporating almost overnight when consumers have been misled.
Consumers are increasingly connected to the world around them and attuned to the issues they care about. For brands, the expectations and the stakes are high.
Transparency can lead to transformation
Welcome to the era of substance, clarity, and unapologetic authenticity, where sustainability led packaging and labels are permissible counter currents to flashy propositions. It is also paramount for organisations to effectively communicate their green initiatives.
This renewed spotlight on ethics creates major opportunities, and trust becomes a huge competitive advantage. It has never been more important for brands to speak up about sustainability – but there has never been more pressure to get it right. And the temptation to over egg the pudding can be too great for some.
While some companies are finding it more beneficial to market their goods as green, even if the product isn't as green as it seems, additionally, greenwashing is often used as a way to give the impression of a company being socially responsible, enabling them to attract more customers and boost profits.
But in doing so, brands run the risk of leaving consumers feeling wronged. Big mistake! Particularly in the digital age, it is easier than ever for consumers to throw a brand overboard, and word spreads quickly when a brand is found to be anything but accurate.
As an established data specialist supplying leading brands, retailers and supply chains with a range of compliance and sustainability data tools, we also possess the expertise to efficiently minimise their environmental impact and maximise the effectiveness of their packaging.
Ecoveritas is a pure data services driven company, enabling focus and agility in these new market conditions.
Verified environmental claims will be a reality for businesses selling in Europe. And it is great to see the call for accuracy and transparency answered. We are very much looking forward to seeing the verification of claims becoming more common. There is too much at stake to get this wrong.
Under the EU’s proposed Green Claims Directive, all claims about a product's sustainability must be substantiated by evidence. That includes those an independent claims verifier would be tasked with checking companies' green claims, seeing that they have supporting evidence and that the claims properly reflect the full lifecycle of product.
These changes will affect UK headquartered firms that sell in the EU. Also in the UK, the Competition and Markets Authority (CMA) is conducting research and making targeted interventions in response to evidence of greenwashing in the fashion and consumer goods markets.
In the UK, the ‘Green Claims Code’ provides guidance for complying with laws on consumer protection when making environmental claims, and the Advertising Standards Authority (ASA) recently published new environmental and social responsibility advertising claims guidance backing up this position.
The guidance puts in writing the somewhat intuitive principles of honest advertising for environmental claims, including that:
They must be clear and complete taking into account how knowledgeable the audience is likely to be – this means that omissions of any significant information will amount to greenwashing;
Any unqualified 'carbon neutral' and 'net zero' claims are likely to be misleading without providing further information to help consumers' understanding of such claims, specifically whether the company promoted in the ad is actively reducing carbon emissions or basing its claims on offsetting;
In product advertising, the product's entire lifecycle – from production to disposal – must be considered when making environmental claims.
The stakes are high
For brand leaders, it is a challenging time. Keeping up with an ever changing legislative landscape is no easy task. Governments globally are making 2023 the year they crack down on it hard!
Sustainability teams must prepare their companies for the EU Green Claims Directive today to ensure compliance readiness and reduce the risks of financial and reputational damage.
Much of the nervousness around claims stems from a growing awareness from businesses of just how important it is that they talk to their customers transparently and accurately about environmental issues. But the gold standard for all communications must always be to back them up.
This is where it is important to build your priorities around data. Data is absolutely crucial. Think of it as a kind of digital body language. Less of a swagger, more of a spring in your step. The ability to puff your chest out and say things with confidence.
And we may as well utilise the swelling flood of data that biting legislation has rightly made a reality.
Whether you use a data company like Ecoveritas or capture this data internally, it represents a financial investment for producers. So, where you can, try and get more value out of the data by using it for other purposes, here are some examples:
Benchmarking: At Ecoveritas, we have a huge database of packaging information. We use this for clients to see how they compare to their peers regarding their packaging weights, recycled content, recyclability, material use etc. This helps identify opportunities for improvements.
Packaging strategies: This data can be used to drive and underpin the key performance indicators companies are working towards internally and externally. This also includes voluntary agreements and customer requests.
Lifecycle analysis: Packaging compliance data is the perfect starting point for a full lifecycle analysis or to be used as a high level carbon footprint across multiple product groups to help identify where to focus design and supply chain efforts.
Cost savings: With increasing compliance costs anticipated (and all other costs!), this data can be used to identify product lines, groups or suppliers who may result in your highest compliance costs. For example, under Extended Producer Responsibility (EPR) reforms we expect fees to be modulated in future years based on recyclability. By identifying now which lines may have the greatest future costs, the change process can be implemented to avoid them.
Green claims: With UK and EU updates on Green Claim Codes, both focus on the need for robust evidence to support any public claims made by companies. The data and supporting documents collected for compliance are often the same evidence and can be used to support claims.
However, you use your data, it must be accurate. At Ecoveritas, we employ a series of data collection methods and quality assessments to ensure we support clients with excellent data quality and coverage for compliance and other purposes.
All of this will propel you towards a commitment to straightforward practices. Packaging, pricing and advertising should reflect reality. No tricks, no deception.
Trustworthy brands can now carefully vet every entity they do business with—no more ‘whack a mole’ when honesty and transparency are found wanting.
Pretty green lies
Businesses promote their environmental awareness through green packaging, eco labels, sustainability reports, industry pledges and clean technologies. When are these symbols wasteful corporate spin, and when do they signal authentic environmental improvements?
Greenwashing has become so pervasive that consumers are growing jaded about corporate green claims. Yet data, much like our own, may soon have greenwash on the run.
Take our own business. We operate in more than 30 countries, with over 70 clients with a combined turnover of £635 billion. We submit in excess of 500 annual environmental reports, issue and process circa 20,000 supplier data requests, and have over two million products with unique packaging metrics in our database. The appetite to contribute to a more sustainable way, and for reassurance, is growing.
Environmental considerations are big with the younger generation. If you want to sell to them, you will probably have to emphasise your organisation's green credentials.
If doubts arise about the credibility of their sustainability promises, this can quickly cost companies sales. This is shown in a survey by the Nürnberg Instituts für Marktentscheidungen (NIM), where 72 % of respondents said they avoid companies accused of making false statements on climate protection.
Green products aren't always what they seem. Responsible manufacturing means transparency and integrity when making environmental claims.
Before making green claims, always substantiate them, and look for hidden environmental costs, by getting familiar with your tier one, tier two and tier three supply chains.
Otherwise, with tech and data creating more transparency, you and your business could be in for a nasty shock.