In today's business landscape, sustainability and sustainability communication play a crucial role. To meet the demand for sustainable products and services, many companies have launched communication initiatives on their website, social media and in annual (impact) reports. However, many companies struggle to ensure the accuracy of their claims, fearing accusations of greenwashing. This concern has arisen as governments demand greater transparency from companies, recognizing that greenwashing damages trust and hinder genuinely sustainable companies from standing out.
Transparent communication is key to engaging your stakeholders and making sustainability accessible to all. Successful companies tackle this challenge by leveraging the power of compelling storytelling backed by data and evidence. This blog is designed to help prevent greenwashing and support you in effectively communicating your sustainability achievements. With practical tips, tricks, and empowering questions, we hope to assist you in making a real difference and telling a fact-based story, so sustainability is not only a buzzword, but a driving force for meaningful change.
1. Understanding greenwashing and its impact
Many people have heard of the term greenwashing. To ensure just sustainability communication, we must first understand greenwashing and why companies should steer clear of it. Greenwashing can be described as the situation in which a company claims to be environmentally friendly and/or socially responsible, but their actions fall short of their claims. They create a false impression of their environmental performance, relying on buzzwords like "100% eco friendly" to promote their products.
‘A study conducted by the European Commission in 2020 revealed that around 50% of evaluated environmental claims in the EU provided vague, misleading, or unsubstantiated information about product characteristics.’
Greenwashing is driven by a desire to maintain a good reputation and attract environmental conscious stakeholders. As sustainability is becoming increasingly important, some businesses use it as a marketing strategy to capitalize on the demand for green products. But instead of providing real evidence, they make use of vague terminology and use the previous lack of existing regulations as an opportunity to continue doing business as usual.
The consequences of greenwashing are far-reaching. It damages trust and transparency, leaving stakeholders sceptical and struggling to support genuinely sustainable initiatives. It leads to unfair competition, making it hard to differentiate truly sustainable products from misleading ones. Moreover, it diverts the attention and resources from real environmental solutions that help to address critical issues like climate change and pollution.
Fortunately, in spring 2023, the European Commission proposed the Green Claims Directive, to ensure businesses communicate honestly and take genuine steps toward a more sustainable future. This Directive is yet to come into force. Once it does, it aims to bring clarity on EU companies' efforts to tackle climate change, targeting false claims and unsubstantiated labels through clear guidelines and reporting procedures. The law is expected to be implemented in 2024.
Curious to find out more about the directive? In our recent blog, we discussed its background and highlighted the key takeaways.
2. Three examples of greenwashing
As more and more businesses are striving to highlight their commitment to sustainability, it is crucial to hold companies accountable for their environmental claims. Below you can find three examples of alleged greenwashing tactics used, highlighting the urgent need for stronger legislation and stakeholder awareness to promote a more transparent sustainability landscape.
Last winter, fashion giant H&M faced scrutiny over its "Conscious Collection", which promoted eco-friendliness but fell short on its sustainability pledges. H&M's scorecard intended to showcase product sustainability, yet over half of the claims turned out to be misleading. Critics questioned the company's true environmental commitment, considering its reliance on a fast consumption-driven business model.
In the world of sunscreen, Banana Boat was accused by a consumer of making questionable claims about their sunscreen being 'reef-friendly'. The accusation led to a class-action lawsuit, revealing that some of their products contained harmful chemicals detrimental to coral reefs and marine life.
Similarly, in 2020, Quorn Foods advertised their ‘Thai Wonder Grains’ lunch pot as a way to address climate change, claiming that it ‘helps us to reduce our carbon footprint’. However, the claim lacked evidence and failed to substantiate what they meant with the claimed carbon reduction.
3. Why transparent and honest communication matters
The previous examples emphasize how transparency is central to effective sustainability communication. Greenwashing can damage a company's reputation when claims are misleading or false and this can have long-term negative effects on the company's success. Therefore, transparency should lie at the heart of a company’s sustainability communication, meaning not just highlighting your successes, but also admitting the failures and challenges you face. By substantiating claims with accurate data and showcasing the initiatives you undertake during your sustainability journey, you can reap the benefits of sustainability reporting.
First of all, reporting in an honest way is essential to build trust and long-lasting relationships with your audience. Greenwashing might provide short-term gains, but it won't sustain your business in the long run. Showcasing your commitment through authentic efforts is more likely to contribute to your long-term viability and successes. Additionally, it can help to boost your credibility and reputation as a sustainable brand, leading to a competitive advantage when attracting new clients.
Secondly, honest communication has the potential to inspire employees, as it motivates them to increase their efforts in reaching your companies sustainability goals. Employees often possess valuable insights and innovative ideas that can contribute to new sustainability initiatives. Engaging with your employees in sustainability topics and making them part of your companies’ journey creates a sense of shared purpose. Also, more and more jobseekers actively seek meaning and purpose in their jobs. Being and communicating truthfully about sustainability can therefore be a valuable asset in today’s job market.
Thirdly, upcoming regulations like the Green Claims Directive will mandate you to report correctly on environmental claims. Complying to rules not only prevents legal consequences, but also demonstrates your commitment to ethical business conduct. This also ensures greater attraction from investors, as they often assess the environmental, social, and governance (ESG) risks associated with a company's operations when making investment decisions. Transparent disclosure empowers investors to assess whether a company aligns with their sustainability criteria and values, influencing investment decisions.
Lastly, beyond reputation, economic or legal considerations, companies have an ethical responsibility to contribute positively to society and the environment. Greenwashing contradicts this responsibility by misleading stakeholders about a company's actual impact on the planet.
Microsoft: A true leader in corporate sustainability A great example of a company that stands out as a true sustainability leader is corporate giant Microsoft, showcasing its commitment to the planet through both actions and communication. Since 2012, Microsoft has operated as a carbon-neutral entity and has set ambitious goals to achieve carbon negativity by 2030, meaning they will remove more carbon than they emit. By 2050, Microsoft even plans to eliminate all of its previous emissions since 1975.
They will achieve this by investing in 100% renewable energy, optimizing their supply chains and operations, preserving water resources, protecting and preserving ecosystems and biodiversity, and becoming a zero-waste company. However, what distinguishes Microsoft is not only their actions but their transparent and well-founded communication about both their successes and failures, expressed through detailed annual environmental sustainability reporting. This underscores Microsoft's remarkable role as a true inspiring sustainability leader.
4. Sustainability checklist: do’s and don’ts
Communicating about sustainable can be quite daunting. Below you can find some do’s and don’ts to consider when communicating about your sustainability efforts:
Do’s:
- Be transparent: provide detailed reporting and data to back up your environmental goals and current progress, but also your challenges and failures. This allows stakeholders to assess sustainability performance accurately.
- Use clear messaging: only make accurate and credible environmental claims and avoid technical jargon to prevent confusion among your stakeholders.
- Set clear sustainability goals: involving external stakeholders to express your engagement to sustainability, identify and implement clear measures to reach your goals and align those goals to reporting frameworks.
- Use reporting frameworks: complying with recognized frameworks (e.g., CSRD) ensures that you provide comprehensive information required by stakeholders.
- Use third-party verification standards: sustainability initiatives that have undergone external auditing and verification by a third-party organization (e.g., SBTI), increases transparency, credibility, and trustworthiness to your claims.
- Promote education and awareness: develop educational campaigns and encourage sustainable practices to raise awareness among your stakeholders, focusing on practical tips and information for positive behavioral change.
Don’ts:
- Vague or misleading claims: provide specific evidence and clear details about environmental claims rather than using broad and unsubstantiated terms like "eco-friendly" or "green."
- Big wording: avoid using small initiatives as big marketing tools (with large budgets) and instead address larger issues within the company's operations to demonstrate your commitment to sustainability.
- Lack of proof: don’t come up with fake non-verifiable sustainability claims but stay genuine and truthful about your efforts.
- Hiding your challenges: it is better to admit being a part of the problem and focus on what could be done to become better. A good plan and clear goals will be appreciated by the public. Most people cheer for those who do their best.
- Expression of green imagery: back up green imagery, symbols, or nature-related visuals with substantial achievements in products or practices to align with the real perception of sustainability instead of using look alike labels.
- End goal destinations: don’t solely focus on your end destination but highlight your current progress and efforts along the way.
Conclusion
Not communicating in a transparent way can cause your business more harm than good. To prevent greenwashing, businesses must communicate clear and transparently, backed up by data and evidence to truly support their sustainability claims. Honesty and transparency are key in this, sharing both your triumphs and challenges with your audience. The new Green Claim’s Directive will contribute to this, hopefully bringing about a legal framework for companies to follow.
As a final check, you can ask yourself the following questions when communicating about your journey towards a greener and more sustainable future:
- Are our environmental claims accurate and based on scientifically supported evidence?
- Are we backing our claims with reliable data and verifiable certifications?
- Have we eliminated vague or ambiguous language in our communications?
- Are we transparent about any environmental challenges we face?
- Do our actions align with the commitments we've made regarding sustainability?
- Have we made a long-term commitment?
- Are we genuinely making efforts to improve our current situation?
- Are we open to third party verifications to assess our claims?
- Are we actively engaging stakeholders to improve our sustainability strategy?
About Regreener
Regreener is an Amsterdam-based ‘Sustainable Commercial Company’. Our mission is to help reverse and mitigate the effects of climate change, and we will focus on that above all else. With our various Climate Solutions and through partnerships we help companies take meaningful climate action.
Any questions or suggestions? Please do not hesitate to contact our team!
If you want to find out how to align your business towards sustainability, check out our published blog on the topic.
