With green buzzwords becoming more prevalent in marketing, aware_ looked at the difference between green claiming and greenwashing and how to stop the latter.
Eco-friendly. Sustainable. Carbon neutral. Biodegradable. Responsible. The proliferation of such green language can be seen advertised across many industries in the recent years, from cars and cosmetics to food and fashion. When a product, service, brand or company rightfully communicates that their practices involve an environmentally friendly or less harmful approach, this is called green claiming. It is clearly an important marketing tool for businesses to show their positive impact on the environment so that eco-conscious consumers can make well-informed purchasing decisions. In the light of increasing citizen awareness around climate change and ecosystem degradation, this eco marketing revolution comes to no surprise. Indeed, the sustainability sector represents a huge market, with two thirds of consumers willing to pay more for products that have a lighter impact on the planet (First Insight).
Unfortunately, many companies take advantage of the profit potential of green claiming while failing to stay true to the green words written on their labels or websites. When brands market themselves as environmentally friendly but behave in the opposite way, this untruthful or misleading practice is called greenwashing. Companies that indulge in greenwashing are not only duping the consumer or other businesses but are also adding to the ecological burden on the planet by diverting customers from genuinely green brands.
Numerous companies have been taken to court for greenwashing practices in the past. One of the most high-profile cases was the ‘Dieselgate’ case from 2015, when the Volkswagen group was sued for not properly disclosing information to consumers about the energy efficiency of its vehicles (case centre). More specifically, in 2009, the company started selling cars fitted with technology that was marketed to be more environmentally friendly. Some countries even subsidised those that purchased these cars to reduce their carbon footprint. When independent researchers discovered that some of the Volkswagen vehicles were exceeding emissions limits, it was found that the company had installed devices in the cars that could change its emissions levels during testing in order to meet environmental requirements. Ultimately, the company was forced to pay a huge $33 billion in fines and to buy back thousands of their greenwashed vehicles.
Greenwashing has been an issue for decades now but has recently received fresh attention and consequent regulatory pressure as companies are exponentially engaging in this malpractice. To first look across the channel, the UK Competition and Markets Authority (CMA) took action when they found out that 40% of online green claims could be misleading (GOV.UK). They created the Green Claims Code to help businesses of all sizes navigate the complex legal waters of green claiming and also came up with the following six useful principles for general guidance:
- Be truthful and accurate: Businesses must live up to the claims they make about their products, services, brands and activities.
- Be clear and unambiguous: The meaning that a consumer is likely to take from a product’s messaging and the credentials of that product should match.
- Not omit or hide important information: Claims must not prevent someone from making an informed choice because of the information they leave out.
- Only make fair and meaningful comparisons: Any products compared should meet the same needs or be intended for the same purpose.
- Consider the full life cycle of the product: When making claims, businesses must consider the total impact of a product or service. Claims can be misleading where they don’t reflect the overall impact or where they focus on one aspect of it but not another.
- Be substantiated: Businesses should be able to back up their claims with robust, credible and up to date evidence.
This year, the European Commission (EC) has also finally introduced the Initiative on Substantiating Green Claims adding this new element to the EU Circular Economy Action Plan launched in 2020 (European Commission). This overdue initiative also recognises the fact that there are more than 200 diverse environmental labels active in the EU alone, and some of which are not all backed up by reliable methods and practices. Biodegradability, recyclability, or level of a product’s organic content are a few examples of such labels.
To combat such a complex legal environment, the EC is proposing a standardised methodology for regulating green claims made by businesses in the EU. This unified framework, called the Product Environmental Footprint (PEF), has been tried and tested since 2013. The PEF is based on a set of criteria or ‘Life-Cycle Assessments’ (LCA) that would rate the environmental impact of a product across its entire lifetime, from extraction to consumption through to its waste management. Currently, there are diverse LCAs used to judge the environmental footprint of products internationally. This inconsistent system can lead to confusion as one LCA can have certain demands for one product and less strict requirements for others. While the proposed PEF system is not perfect, it promises to overcome inconsistency issues by creating an equal standard for all (Euractiv).
Ultimately, according to the EC, this regulatory framework would result in more reliable environmental information that “would allow market actors – consumers, companies, investors – to take greener decisions” (European Commission). The plan is part of the greater EU Green Deal launched in December 2019 that aims to make Europe the first continent to reach carbon neutrality by 2050. Set in the context of such an ambitious political environment, greenwashing is clearly no longer an option.
– by Tina Ateljevic
