Brands are increasingly putting sustainability and environmentalism at the core of their identities. With environmentally conscious consumers demanding greener products, brands have been under more pressure than ever before to publicise their environmental credentials. This pressure looks set to increase further as research suggests sustainability has been a bigger concern for consumers since the Covid-19 pandemic began.
Perhaps it’s inevitable therefore that some companies have been tempted to exaggerate their green credentials. But to what extent is this a problem for consumers and brands alike?
The rise of greenwashing has put a sharp focus on the claims various companies and brands use as part of their marketing. “Greenwashing” is a term used to describe companies which give a false or misleading impression about their impact on the environment. It was first coined in 1986 by environmentalist Jay Westerveld to describe a hotel that claimed to reuse towels to help the planet when actually it was just trying to save money.
Soft drinks giant Coca-Cola recently faced legal action by US environmental group The Earth Island Institute for greenwashing. They argued that Coca-Cola couldn’t label itself as sustainable or environmentally friendly while continuing to generate millions of tonnes of plastic waste every year. Coca-Cola are not alone; plant-based business Oatly has also been accused of misleading consumers, an allegation Oatly has denied.
Marketing has always involved an element of spin. How many people actually thought Red Bull could give you wings? However, this is different, particularly as the claims cannot be easily fact-checked by the consumer and so have to be accepted on face value.
This is where regulators are increasingly stepping in. In November 2020, the CMA launched an investigation into misleading environmental claims and ASA are also considering how effective current rules are in governing environmental claims. Draft guidance released by the CMA in May 2021 proposed all environment claims should follow six key principles, including that “businesses should be able to back up their claims with robust, credible and up-to-date evidence.”
Greenwashing does provide some good news. It shows the efforts brands are willing to make to respond to the environmental concerns of its consumers. Whilst litigation and regulatory pressure may not have a huge impact at present, the real issue is likely to be reputational damage. Bad publicity may lead to consumers switching their allegiance to brands which are perceived as greener and more environmentally sustainable.
Brands have always competed on price, but increasingly they will compete on sustainability. The question is whether brands can really afford to simply provide lip service to consumer expectations? The cost of greenwashing may prove more expensive than the environmental initiatives themselves.
How to spot greenwashing and why brands were caught out