What is Greenwashing?
Essentially, greenwashing is when a company gives a false impression that its products are eco-friendly. When a company makes misleading claims about how green its products are or how much of an impact they have on the environment, they’re greenwashing.
Furthermore, the term Greenhushing is when a company adopts a silent / no comment approach to environmental goals. Many companies do it. Some don’t realise they’re doing it. Others do realise but will not openly acknowledge it.
We expect to see and hear about more standards, frameworks and certification options emerge for businesses. And whilst your packaging may not generate higher CO2e values, Packaging is always front of mind of consumers and NGOs.
Why is Greenwashing bad?
By misleading investors and consumers that are sincerely seeking environmentally friendly products or companies, greenwashing is misleading and unethical. Green products typically cost more, leading consumers to overpay for them. Greenwashing can ruin a company’s reputation and brand if it’s exposed.
What is being done to prevent greenwashing?
Whilst the sustainability markets remain somewhat like the wild west with all sorts of claims and counterclaims being shot across consumer’s bows. One thing is for sure cases of greenwash are on the rise.
Further legislation to stamp out false claims is coming and how businesses present their green claims is becoming more sophisticated. A report from the UN at COP27 suggests that accountability and transparency can help negate greenwash from net-zero targets for good.
“We urgently need every business, investor, city, state and region to walk the talk on their net zero promises. We cannot afford slow movers, fake movers, or any form of greenwashing.”
António Guterres,
UN Secretary-General
Regulations and penalties for greenwashing
COP27’s High-Level Expert Group reported that businesses that can produce “clear, accessible, comparable data” on their sustainability claims and targets can reap “enormous benefits”.
We agree. The benefits include enhancing trust and interactions between investors and consumers, as well as identifying areas where other businesses can make faster progress on sustainability targets, enabling firms to share best practices, forge new partnerships and drive industry change. Furthermore, improving transparency and accountability on sustainability targets will help regulators identify remaining problems by establishing “ambition loops.”
Businesses may be compelled to increase their environmental ambitions and speed up their actions if they measure their climate impact, risks, and opportunities. The changes may also result in operational cost savings, purchasing cost savings, and risk avoidance.
Avoiding punitive penalties from the Competition and Markets Authority (CMA) may motivate positive engagement. In 2022, the CMA announced that it would investigate greenwashing in fashion as its first official investigation. Fines and other penalties may be imposed on brands that violate its Green Claims Code. This code aims to guarantee accuracy and clarity in claims; not to omit essential information; and to enable ‘fair and meaningful’ comparisons.
Businesses should explore and understand all regulatory frameworks governing communications for net-zero targets, as well as the UN’s landmark report, to ensure targets are credible.
Businesses in the UK are now required to report in accordance with the Task Force on Climate-related Financial Disclosures (TCFD). As part of the mandate, investors and the companies they invest in will be more involved in climate-related issues.
How can you ensure your packaging does not attract a greenwashing label?
Ways to avoid greenwashing include:
- Byaddressing your organization’s environmental and social impact, you can incorporate sustainability into your company’s purpose. This can be achieved by establishing a sustainability objective with real-world environmental and social impact, prioritizing sustainability strategies, and developing sustainability leaders.
- Useanobjective, data-driven approach to your data collection and measurement activities ensuring to quantify competitive differentiators and valuation premium drivers. Through a standardised intake and calculation process, automated sustainability tools can boost your data-driven focus.
- Include internal and external stakeholders in your materiality assessments so you can consider perspectives across the value chain to include Scope 3 reporting.
- Establish a reporting infrastructure that allows your team to track trends, record progress, and uncover opportunities to improve commercial and carbon footprint factors. Research your reporting software to make sure it meets stakeholder expectations.
- Employ industry-specific metrics and disclose your methodologies to provide transparent and accurate information to stakeholders. Include factual data that can be used to track your progress.
Benchmark’s role in helping
Tracking the latest developments and converting them into actionable soundbites can be challenging. But we can help as all the relevant data is compiled by Benchmark.
We at Benchmark, are dedicated to helping businesses that are under increasing pressure to provide more information on their environmental credentials – whether to consumers who want to spend their money with brands and retailers or increasingly ESG-minded investors, or simply to comply with new legislation.
One thing is for sure openness and transparency are the broad calls from almost every direction. Due to the fact, Packaging is complex Benchmark can help you identify your granular data, we accurately calculate, and transparently communicate via bespoke dashboards, and you can be reassured as we are an authentic source.
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