Why should businesses avoid greenwashing?

According to the Cambridge Dictionary, greenwashing is “behaviour or activities that make people believe that a company is doing more to protect the environment than it really is”.

As more and more consumers are actively buying from sustainable brands and are prepared to pay more for sustainable products, the need for businesses to go green is clear. But misdirection by greenwashing has become something all businesses need to avoid.

Greenwashing is getting more common

Eco-Business is an independent media and business intelligence company dedicated to sustainable development and environmental, social and governance (ESG) performance. Every year more examples are recorded of dubious sustainability claims that businesses have made. This year it even called out the environmental charity Ocean Cleanup for supposedly staging a video of their work.

Other brands that were found to be greenwashing include:

• HSBC for boasting about its tree-planting scheme without also acknowledging its investments in fossil fuel projects.
• some of the big oil companies for the disproportionate times they shouted about how they tackle climate change when in fact they only invest 17% in renewable energy.
• the band Coldplay for their world tour which claimed to be ‘carbon-tastic’, but it was discovered there were links with palm oil suppliers that were reported to have cut down 10,000 hectares of forest in 2019 and 2020.
• H&M for falsified environmental information, and misleading labelling of its ‘Conscious Choice’ range.

The fashion industry

Sustainability in the fashion industry has become a big concern. More than half of consumers see sustainability as important in fashion, and there is a growing trend towards slow fashion and second-hand clothing. It’s unsurprising then that fashion brands are keen to promote their green credentials, but unsubstantiated claims could land them in hot water.

The Competition and Markets Authority (CMA) has recently launched an investigation into the green claims of three major fashion brands after a review of the fashion industry at the beginning of 2022 identified concerns about potential greenwashing. The CMA’s interim Chief Executive warned that if it is concluded that the brands’ green claims are misleading, enforcement action will be taken. She concluded with a warning for the fashion sector as a whole: “This is just the start of our work in this sector and all fashion companies should take note: look at your own practices and make sure they are in line with the law.”

Green hush

Unsurprisingly, brands have become wary about making sustainability claims. To avoid any consequences of accidentally making misleading statements, many businesses simply stay quiet about their sustainability credentials in what has become known as the ‘green hush’. The worry is that by not communicating their sustainability policy, companies are at risk of starting a “vicious circle” of corporate non-disclosure and climate inaction.

The Green Claims Code

To help prevent the ‘green hush’, the UK government launched The Green Claims Code in 2021. The Code sets out guidance for businesses on how to comply with consumer protection law when it comes to making environmental claims. With these clear guidelines on how to provide information about their sustainability policies and actions, businesses can be more confident when talking about their green credentials.

The primary principles of the Green Claims Code are:

• Any green claims your business makes in its marketing and advertising must be truthful and accurate.
• Your claims must be clear and unambiguous, and you must give customers the full picture so they have all the information they need in order to make informed choices.
• When you make claims, you must be able to back them up with credible evidence.
• Comparisons with other products need to be fair and meaningful, i.e. like-for-like comparisons.
• Sustainability claims have to take into account the full life cycle of the product from creation to disposal.

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