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Stemming the tide of greenwashing

Updated: Sep 19, 2022

As we race through 2021, endeavouring to build back better and meet the needs of our socially and economically conscious consumers, it feels like everywhere you turn, companies are fast-tracking their plans to reach net-zero carbon emissions and making a number of sustainability claims.

From consumers to investors, stakeholders across the globe and from all walks of life have woken up to the immediate need for businesses to be economically, socially and environmentally sustainable to ensure we manage our finite resources for future generations.

Why is greenwashing becoming a problem?

While many businesses want to understand and consciously embed sustainable practices into their business operations - supply and value chain - others are casting a long dark shadow on transparency and honesty and devaluing the concept and practice of sustainability.

Earlier this year, the International Consumer Protection Enforcement Network (ICPEN) analysed approximately 500 websites promoting products and services across a range of sectors, including clothes, cosmetics and food.

Their members found that 4 out of 10 websites appeared to be using tactics that could be considered misleading on the sustainability front, never mind potentially breaking consumer law.

The tactics included:

  • vague claims and unclear language around terms such as 'eco' and sustainable,

  • reference to 'natural products' without adequate explanation or evidence of the claims,

  • own brand eco logos and labels not associated with an accredited organisation,

  • hiding or omitting certain information to appear more eco-friendly.

The rising scepticism amongst stakeholders is causing a problem as globally good businesses try and take sustainable action moving towards 2030. In a YouGov poll two-thirds of people were found to be wary of environmental and social claims made by brands.

Is the U.K. Government tacking greenwashing?

Interestingly in June of this year, the U.K. Government launched a new group called the Green Technical Advisory Group. Their role is to combat the recent rise in 'greenwashing' in the investor sector, focusing on 'unsubstantiated or exaggerated claims that an investment is environmentally friendly'.

Though the advice will be non-bidding, it will relate to developing and implementing a Green Taxonomy in the U.K. context. The British government is hoping the new group's formation will help investors make better informed eco-friendly financial decisions. This group also marks another milestone in the quiet revolution reorienting public and private capital flows to sustainable activities, which is already underway in other jurisdictions. The E.U. for example has similar rules on defining greenwashing under the Sustainable Finance Disclosure Regulation, which imposed mandatory environmental, social, and governance (ESG) disclosure obligations.

How can you guard against greenwashing your customers and stakeholders?

Globally, Micro, Small and Medium Enterprises (MSMEs) make up 90% of businesses and more than 50% of employment worldwide. MSMEs are

significant contributors to job creation, global economic development and achieving the 17 Sustainable Development Goals.

To combat greenwashing and instead work towards sustainability in all its forms, our top five tips should help you get started.

1. Be honest

Businesses must live up to all the social and environmental claims they make. Buzzwords like ‘green’ and ‘eco-friendly’ should only be used with proof of positive social or ecological impact. If you are a work in progress, be honest, it will be viewed favourably by stakeholders.

2. Be clear

All social and environmental claims must be transparent and properly defined. Claims about future goals or ambitions should only be used if you have a clear and measurable strategy that is embedded across your organisation.

3. Do not omit or hide important information

See top tip number 1! If part of your product is not recyclable or net-zero friendly, be honest and talk about ways you intend to investigate and fix the problem.

4. Consider the full lifecycle

Mapping your supply and value chain is crucial to help you understand if your products and services are sustainable. A material might be recycled, but the positive is outweighed if, in the production process, child labour was used.

5. Substantiate any claims made

Make sure you can back up your claims with robust, credible and up-to-date evidence and a clear baseline. Wherever possible, this information should be publicly available.

To talk to SDG Changemakers about how you can understand, embed, measure and communicate your social and environmental sustainability, get in touch.

About SDG Changemakers

SDG Changemakers works with businesses to accelerate the scale of action to deliver against the UN's 17 Sustainable Development Goals (SDGs).

SDG Changemakers challenge and empower businesses to be purpose-driven, take practical action, and mobilise their collective strength to deliver against the Global Goals.

Using the Sustainable Development Goals as our base, our framework focuses on how companies can bring about lasting social, environmental and economic changes through running their businesses responsibly.

To learn more about what SDG Changemakers do and how we support organisations like yours, get in touch.

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