The Danger of Greenwashing and how to Protect Your Brand

Recently, regulatory authorities banned ads from several airlines, including Air France, Lufthansa, and Etihad, for misrepresenting the ecological friendliness of air travel. The bans are part of a bigger crackdown on greenwashing and companies that engage in it face greater risks than the loss of advertising revenue. In other news, consumer goods giant Unilever is accused of misrepresenting the ecological friendliness of its products and thereby misleading clients and could face litigation if found guilty. These cases highlight the dangers of greenwashing and serve as an example of the potential risks for your brand.

What is greenwashing exactly?

Greenwashing is the deceptive practice of making a company or its products appear more environmentally friendly than they are. Greenwashing can lurk in product labeling, marketing campaigns, governance documents or corporate messaging.

The impact of greenwashing and why it matters to your brand

Greenwashing is damaging not only to consumers and the environment but also to a company’s reputation and bottom line. There are significant potential legal consequences and consumer backlash that can arise from deceptive “green” marketing.

In the case of Unilever, if the probe finds evidence of the company’s wrongdoing, it may face extensive lawsuits. Others, including Volkswagen, H&M, airlines claiming carbon neutrality, and retailers, have also faced litigation due to greenwashing allegations. Repercussions include lost consumer trust, financial risks and legal costs. How any of these issues affect the market value of a company in the short or long term needs no explanation. Who takes responsibility does.

Just as sustainability is a team effort – it’s not just one department’s responsibility – so is the effort to combat greenwashing. From financial reporting to marketing and communications: teams need to work together to make sure marketing materials and company executives say what they do and do what they say. Sustainability teams also play a crucial role in guiding businesses towards transparent and responsible practices.

How to spot the greenwashing red flags

Greenwashing can be subtle, so it´s important to be able to identify it and prevent launching a campaign that will backfire. Here are some indicators to help you recognize – and prevent – greenwashing:

  • Data should be the foundation of any marketing claims. Validate any facts or numbers on marketing slogans, packaging or public statements.
  • While buying carbon offsets might look good on paper: are you sure the carbon credits your company purchased are truly compensating emissions?
  • If your company endorses diversity, equity and inclusion in a policy statement, make sure you provide the data to show your status quo in DEI and take action to bridge obvious gaps.

Navigating greenwashing regulations: a compliance demand

Photo by VonWong, A Truckload of Fashion Greenwashing Campaign

In the ever-evolving landscape of sustainability, staying up to date with regulatory changes is vital for businesses striving to communicate their environmental efforts authentically. Here´s a quick overview of the recent regulatory developments aimed at combating greenwashing in the EU, UK, and US.

  • EU: The Directive on Green Claims: In March 2023, the European Commission adopted a proposal for a Directive on Green Claims. The goal is to ensure that green claims are reliable, comparable, and verifiable across the EU. This initiative aligns with the European Green Deal, focusing on creating a circular economy. Key highlights include the emphasis on standardized green labels and third-party audits.
  • UK: The Green Claims Code: The UK took an early step by introducing the Green Claims Code in September 2021, enforced by the Competition and Market Authority (CMA). This code provides guidance to businesses on making truthful and non-misleading environmental claims. It’s part of the CMA’s consumer protection activities.
  • US: The FTC Green Guides: The United States, in 1992, established the FTC Green Guides. In 2012, the Federal Trade Commission (FTC) revised these guides, offering general principles for environmental marketing claims and specific guidance on claims like biodegradable, compostable, recyclable, and renewable.

These proposals and directives define criteria which companies will have to adhere to when making environmental claims. These criteria are intended to ensure that companies give a holistic picture of the sustainability of their practices. This is meant to increase transparency for consumers, but also gives companies clear guidelines for communication.

As the world economy trundles towards a more sustainable future, regulators need to make sure that companies play by the rules. These, however, may be subject to adjustment, so it’s important to stay informed to ensure that your business doesn’t get caught off guard, like Lufthansa, Air France and Unilever were.

Photos by Benjamin Von Wong | LinkedIn

Campaign: A Truckload of Fashion Greenwashing – Von Wong Blog

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