Greenwashing: sorting fact from fiction in environmental claims

Businesses that promise too much in terms of their environmental credentials could find themselves suffering reputational or even financial trouble.

The UK’s Green Claims Code Guidance, instituted in 2021, is designed to govern the environmental claims made by businesses. It serves as a benchmark, dictating the terms for transparent and truthful communication on the environmental impact of products and services. And it attempts to remove greenwashing, which is becoming increasingly prevalent across many products and services. 

Greenwashing is a deceptive claim suggesting that a product, service, brand or business provides a benefit, or is less harmful to the environment than it is in reality. Misleading claims include untrue or hidden information is untrue or hidden, or if information is misrepresented and taken out of context.

A global review of randomly selected websites carried out by the UK Competition and Markets Authority found that 40% of green claims made online could be misleading consumers.

This could include unsubstantiated use of terms such as “eco” or “sustainable” or reference to “natural” products; own-brand logos or labels from in-house sustainability programmes that appear to be from accredited organisations; and hiding or omitting certain information, such as a product’s pollution levels, to appear more eco-friendly.

Europe is also taking action: the European Parliament and Council recently reached a provisional agreement on new rules governing environmental claims. This follows the European Commission's proposal for a Directive (the Green Claims Directive) which was published in March 2023. The directive is expected to become European law in 2024.

To counter greenwashing, the Green Claims Code Guidance demands that claims about products or services must:

• Be truthful and accurate
• Be clear and unambiguous
• Not omit or hide important relevant information
• Make fair and meaningful comparisons
• Consider the full life-cycle of the product or service
• Be substantiated

The guidance seeks establishing stringent standards, ensuring that claims of environmental sustainability are substantiated by factual evidence and, just as importantly, are communicated to consumers correctly.

The Green Claims Code is not law and is not directly enforceable. However, it sets out the CMA’s interpretation of existing consumer protection and advertising law, as it relates to green claims. The CMA will use it as a guide and reference point when enforcing consumer protection law.  But the guidance also has authority behind it. The UK government has enabled the Competition and Markets Authority using the guidance to impose sanctions on companies that violate existing consumer protection laws. Making false or misleading environmental claims could face fines of up to 10% of their annual global turnover.

Why does it matter? 

Increasingly, consumers will boycott not just firms perceived as polluters, but those who attempt to hide the truth. 54% of consumers said that they would stop buying from a company if they were found to be misleading in sustainability claims, as stated in new research from KPMG. Therefore, it is important for all printers to be careful of making claims they cannot proven. Interestingly, for garment and textile printers, participants in the survey considered the fashion/clothing industry the largest sector that greenwashes  after the energy industry.  

Last year, the CMA announced it was investigating clothing retailers ASOS, Boohoo and George at Asda in relation to potential misleading claims, including ‘broad and vague’ language and missing product information.

Can you be confident that your green claims stand up to scrutiny and avoid this reputational harm? Double-check and triple-check your own marketing and advertising collateral, and perhaps consider using a green marketing specialist, who could ensure your environmental claims are legitimate and proven by real actions. It is important to  use only genuine environmental certifications such as ISO 14001, Nordic Swan Ecolabel and OEKO-TEX. 

It might seem that B2B entities encounter relatively diminished risk under the Green Claims Code, as the emphasis of the guidance pertains predominantly to consumer-oriented communications. Nevertheless, prudence dictates that B2B enterprises remain vigilant and adhere to ethical environmental communication practices, bearing in mind the broader reputational repercussions from deviating from standards. Trust, a commodity not confined to consumer relations, remains a critical asset for all enterprises, irrespective of their client-facing status. 

What about carbon offsets?

For all businesses, consumer-facing or not, carbon offsets have been a popular environmental strategy. But offsets are increasingly associated with greenwashing. 

In July, the Voluntary Carbon Markets Integrity Initiative (VCMI) recommended that companies wanting to use carbon credits as part of their overall climate strategy should 
publish their annual emissions and progress towards science-based carbon targets before making any claim of positive environmental action. 

Analysis by the Rainforest Alliance found that world-leading forest offsetting and REDD+ schemes – used by some of the world's biggest polluters – were failing forests by allowing millions of credits to be generated that simply do not represent real emissions reductions. As much as 90% of offsets were judged to be worthless. 

Ensuring accurate environmental claims requires the establishment of robust oversight to avoid misleading statements. Print businesses should re-confirm and authenticate the environmental advantages of their products and instil confidence in customers that such claims are presented transparently and fairly to consumers.

Print businesses should review policies, structures, and governance in place around green claims. Those most at risk through consumer-facing activities should consider risk assessment of current activities, including direct claims and claims by external agencies or suppliers, and train staff to recognise reports of potentially misleading green claims, and to escalate appropriately.