As UK fashion retailers including Asos, Boohoo and George at Asda are investigated for potential greenwashing, Lena Roland, head of content at marketing specialist WARC Strategy, explains how businesses can avoid misleading customers with their sustainability messaging

Recyling sustainability graphic

Today’s consumers are becoming increasingly aware of greenwashing. A survey by Mindshare, a global media agency, found 49% of people in the UK think brands are guilty of it.

A survey conducted by Harris Poll for Google Cloud of nearly 1,500 executives across 16 markets and multiple sectors revealed that 58% of c-suite or VP-level executives admit their company is guilty of greenwashing.

It is a growing problem. A study by the European Commission and national consumer authorities analysed the green claims on the websites of companies operating in business sectors such as garments, cosmetics and household equipment. It found 344 seemingly dubious claims. In 42% of those cases, the claims were false, exaggerated, or deceptive and could potentially qualify as unfair commercial practices under EU rules.

Thirty-seven per cent of cases included vague and general statements such as ‘conscious’, ‘eco-friendly’ and ‘sustainable’, which could give consumers the unsubstantiated impression that a product had no negative impact on the environment.

Defining greenwashing

There is no legal definition of greenwashing but the term generally refers to the practice of companies making misleading, exaggerated or false claims about their sustainability commitments, which are used for marketing or PR purposes. According to Greenpeace, greenwashing is “a PR tactic that’s used to make a company or product appear environmentally friendly without meaningfully reducing its environmental impact”.

Unsurprisingly, greenwashing, and how to avoid it, is front of mind for business leaders in every sector. The UK fashion industry, in particular, is coming under increasing scrutiny – an investigation is underway into Asos, Boohoo and George at Asda to see if the claims made by these brands comply with the Competition and Markets Authority’s (CMA) Green Claims Code.

The CMA’s Green Claims Code

When making a sustainability claim, the CMA says companies should adhere to all of the following statements: 

  1. The claim is accurate and clear for all to understand
  2. There is up-to-date, credible evidence to show that the green claim is true
  3. The claim clearly tells the whole story of a product or service, or relates to one part of the product or service without misleading people about the other parts or the overall impact on the environment
  4. The claim does not contain partially correct or incorrect aspects or conditions that apply
  5. Where general claims (eco-friendly, green or sustainable, for example) are being made, the claim reflects the whole lifecycle of the brand, product, business or service and is justified by the evidence
  6. If conditions (or caveats) apply to the claim, they are clearly set out and can be understood by all
  7. The claim will not mislead customers or other suppliers
  8. The claim does not exaggerate positive environmental impact, or contain anything untrue – whether clearly stated or implied
  9. Durability or disposability information is clearly explained and labelled
  10. The claim does not miss out or hide information about the environmental impact that people need to make informed choices
  11. Information that really cannot fit into the claim can be easily accessed by customers in another way (eg: QR code, website)
  12. Features or benefits that are necessary standard features or legal requirements of that product or service type are not claimed as environmental benefits
  13. If a comparison is being used, the basis of it is fair and accurate and is clear for all to understand

Greenwashing can manifest itself in many ways and can be difficult to recognise. Falling foul of regulators generates consumer mistrust and investor unease, and can damage brand reputation – and in today’s 24/7 always-on environment, consumer or employee backlash is only ever a tweet away.

To avoid greenwashing, retailers must stick to three main rules.

1. Ensure environmental claims can be substantiated

Perhaps the most high-profile way to fall foul of regulators is by making misleading, vague or unsubstantiated claims. In January, the Advertising Standards Authority (ASA) banned ads for Oatly, the plant milk, for “misleading“ environmental claims. 

The Oatly ad claimed “climate experts say cutting dairy and meat products from our diets is the single biggest lifestyle change we can make to reduce our environmental impact”. The ASA said consumers would understand this to be a definitive, objective claim that was based on scientific consensus. However, the authority’s investigation found this was the opinion of one climate expert who had said a vegan diet is “probably the single biggest way to reduce your impact on planet Earth”. While the research was considered good quality and the opinion was evidence-based, the evidence only provided the opinion of one climate expert and the word “probably” had been omitted from the claim. The ASA deemed the claim unsubstantiated, and on that basis, misleading. 

More recently, a report by the Changing Markets Foundation found companies like Coca-Cola, Unilever, Ikea, Tesco and Kim Kardashian’s clothing brand Skims are using “deceptive greenwashing tactics” to mislead consumers. Claims about ‘ocean-bound’ and recyclable plastic were found to be common and did not stand up to scrutiny. 

Action: Do your research and be clear, honest and transparent about your environmental claims. This will build consumer trust and protect your company’s reputation.

2. Be realistic about offsetting on the road to net zero

Net zero is a target global climate scientists say the world must reach by 2050 to manage global warming and avoid a temperature rise of 1.5°C above pre-industrial levels. Setting a net-zero target will help companies reduce greenhouse gas emissions.

But reaching Net Zero is complicated. Companies must understand and measure how much carbon they and their entire value chain are omitting, and get a verifiable plan in place to reduce emissions. To get to net zero, most companies will likely need to do some offsetting. 

The UN defines offsetting as “a climate action that enables individuals and organisations to compensate for the emissions they cannot avoid by supporting worthy projects that reduce emissions somewhere else”. So companies might invest in reforestation or other conservation projects to offset other activities. However, there are concerns about whether carbon offsetting schemes are credible, leaving the companies that rely on them vulnerable to accusations of greenwashing. According to Greenpeace, offsets are a “get-out-of-jail-free card”.

The Corporate Climate Responsibility Monitor, conducted by NewClimate Institute in collaboration with Carbon Market Watch, conducted an analysis of the headline climate pledges of 25 of the world’s largest firms. It found major companies, including Unilever, Nestlé, Accenture and BMW, were falling short of their plans to cut emissions.

“To avoid accusations of greenwashing, it is critical to set science-based targets that can be verified and approved”

The study found not enough of them are seeking to decarbonise more than 90% of their full value chain. All but one of the companies studied will rely on carbon offsetting. The trouble with offsetting is it can be obscured; the authors noted how Unilever and Nestlé do not advocate offsetting at the corporate level but its use across its brands is relatively common.

“Paying for nature restoration and tree planting to mop up residual emissions from your inventory is fine, but only in small quantities. In the aggregate, targets assume far too much offsetting – there simply isn’t the land on Earth to plant that many trees if all companies follow suit”, says Peter Chalkley of the Energy and Climate Intelligence Unit.

To avoid accusations of greenwashing, it is critical to set science-based targets that can be verified and approved. The Science Based Targets initiative (SBTi) is an initiative run jointly by the CDP, the UN, the World Resources Institute and the World Wide Fund for Nature. Getting STBi-approved is considered the gold standard for corporate environmental targets.

Action: Check if your net-zero pledges are verifiable and if they will stand up to the scrutiny of external regulators and other stakeholders such as journalists, climate activists and ESG investors.

3. Seek out credible certification

As well as guidance from the CMA, there are several organisations that offer green certifications that are recognised in the UK such as B Corp, the Carbon Trust and the Forest Stewardship Council.

Action: Take responsibility, do your research and reach out to credible partners that can help you avoid greenwashing.

Avoiding greenwashing can be a minefield for businesses, but ensuring claims can be substantiated, and having the accreditation of respected bodies, will help gain consumer trust and keep regulators at bay.