By Katherine Price, Sustainability Editor, H&C News: What is greenwashing and why you need to avoid it.
It’s been an interesting month in the climate space, with environmental protesters hitting the headlines for targeting a Van Gogh painting, a Rolex store in London, the milk industry and the QE2 Bridge – just to name a few.
Meanwhile, the UN has been criticised for allowing Coca-Cola to sponsor COP27 next week, with the drinks company accused of greenwashing (it’s ranked as the top global corporate plastic polluter).
“Companies are wanting to make more and bolder claims about their environmental records, but it has also very much gone up the radar of the regulators in the UK and overseas as well, such that there are higher risks here if you make claims that you are unable to substantiate,” says John Wilks, partner at UK law firm DLA Piper, which together with the Energy & Environment Alliance produced legal guidance for the hospitality sector on environmental advertising claims.
The term ‘greenwashing’ is reported to have been coined by Jay Westerveld in the 1980s in an essay in which he criticised hotels for displaying cards encouraging guests to ‘save the planet’ by reusing their towels, giving the impression they cared about the environment while doing nothing further to reduce their environmental impact.
There is no anti-greenwashing legislation in the UK yet, but there are regulations around false or misleading environmental claims, and advertising rules.
The Competition and Markets Authority (CMA) has made it clear that, as of this year, firms making green claims must not omit or hide important information and must consider the full life cycle of a product, with an extensive ‘Green Claims Code’ available online with the law. It states that claims must be:
- Truthful and accurate
- Clear and unambiguous
- Substantiated
Meanwhile, claims must not be exaggerated, and comparisons must be fair and meaningful. It even offers hospitality-specific examples of what could be considered greenwashing.
If a disposable cup is marked as ‘compostable’ but doesn’t specify that it can only be composted in an industrial composter, this is likely to be misleading.
If a selection of properties on an accommodation booking site carry a green leaf symbol with the words ‘trusted eco holiday provider’ but the symbol is something the business has developed itself and not an independent scheme, this could be misleading.
Meanwhile, guidance also suggests that a restaurant providing a takeaway service and using the slogan ‘working to reduce waste’ based on a pledge to cut food waste should have an easily accessible waste reduction strategy with measurable targets and deadlines available for consumers to view.
One real-life example saw McDonald’s accused of greenwashing when it switched its plastic straws for paper, before it emerged that the straws couldn’t be recycled.
General terms like ‘green’, ‘sustainable’ or ‘eco-friendly’, the Green Claims Code says, especially if used without explanation, are likely to be seen as suggesting that the product or business has a positive environmental impact, which the business would need to prove to be compliant.
“Businesses should not focus claims on a minor part of what they do, if their main or core business produces significant negative effects,” it says, emphasising that businesses need to be clear about how environmental impacts have been measured or assessed.
“It all fundamentally comes back to making sure that the claims aren’t misleading the consumers, asking what a consumer would understand by the claim, and making sure that you have the evidence to back the claim up,” explains Wilks.
“It’s obviously quite a long process, in order to make a claim that you can fully substantiate you need to have the data collection processes in place, you need to know what your suppliers’ environmental impact is, and that’s not something that can be done overnight.”
He acknowledges that this may be tougher for a smaller business but offers a solution: “It’s not necessarily that the smaller businesses can’t make any claims at all but that they need to look carefully at what evidence they have and then make the claim fit the evidence they have and not go beyond or exaggerate it.”
The CMA is currently focusing on the retail sector, but it will eventually move onto other sectors. Wilks says travel and transport could follow further down the line, which may subsequently see the CMA become more interested in the hotel sector.
Meanwhile, a complaint against your marketing upheld by the Advertising Standards Authority (ASA) could see your brand splashed across tomorrow’s newspapers for all the wrong reasons. Alpro and Oatly have both fallen foul of this – two companies that are likely to be further on in their sustainability journeys than many others.
Wilks emphasises the importance of ensuring your marketing team knows what they can and can’t say: “If a complaint is upheld and it’s published in all the newspapers that you’ve been misleading the public, that can cause very significant reputational damage and therefore financial damage given that consumers are increasingly basing their purchasing decisions on environmental factors,” he says.
Meanwhile, the government has proposed increases to the CMA’s powers which, if implemented, will enable it to fine a company up to 10% of its global turnover for consumer law breaches – and the CMA won’t have to go to court to impose such fines.
“There are significant risks, and those risks are going up,” adds Wilks.