Most companies are doing their best to be greener. It’s a labour-intensive task that involves scrutinising every detail of the supply chain to ensure you 'practice what you preach', so you don’t get accused of ‘greenwashing’.
Businesses truly need to analyse everything: from the colours on the product packaging design to the copywriting taglines in a marketing campaign to ensure there is no room for misinterpretation, and then ensure all suppliers and partners are applying the same kind of rigour to their own ESG policies.
Market intelligence company Euromonitor has identified a trend for 2024: ‘Greenwashed out’, which is likely to become a key area of focus for beauty and personal care product businesses.
Euromonitor’s Client Insight Research Manager, Stephen Dutton, said that many shoppers have been taking steps to live sustainably but are now questioning whether companies and governments are using all possible resources to make a true difference
“They know their eco-friendly choices help to an extent, but real change needs to be a collective effort,” he said. “Consumers are pushing the responsibility back on businesses and won’t accept empty promises or false narratives. All organisations must take ownership of their carbon footprint and prove their positive impact.”
Environmental concerns still appear to be very important to shoppers – Euromonitor’s consumer data showed that 64% of consumers said they had tried to have a positive impact on the environment through everyday actions, while 45% felt they were personally contributing to climate change in 2023.
Potential ‘greenwashing’ hurdles
Unilever is a recent example of a long-established business that is being investigated for greenwashing accusations.
Although the British conglomerate has numerous B-Corp certified brands and has long committed to sustainability endeavours, reportedly investing over €1bn in climate, nature, and waste reduction projects, it has still drawn the attention of the Competition and Markets Authority (CMA) to investigate potential issues, which included:
- Certain statements and language that appeared vague and broad and may mislead shoppers regarding the environmental impact of products.
- Claims about some ingredients are presented in a way that may exaggerate how ‘natural’ the product is, and so may create an inaccurate or misleading impression.
- Claims focusing on a single aspect of a product may suggest it is environmentally friendly as a whole.
- Certain green claims – particularly in relation to recyclability – may be unclear, as they fail to specify whether they relate to all or part of a product, or packaging.
- Use of colours and imagery – such as green leaves – may create the overall impression that some products are more environmentally friendly than they actually are.
This lengthy list illustrates the various hurdles where brands and businesses could potentially fall down on regulations in a particular region. So where can businesses start to make sure they are doing everything they need to be on this issue?
Emission reduction should be a focus
With the ESG burden truly shifting onto companies and government at the end of 2023, Dutton advised that emission reduction should be a focus area for all businesses going forward.
“Offsetting isn’t enough but accurately mapping out your carbon footprint is complex. Businesses need to measure direct and indirect emissions, including upstream and downstream value chains. That’s not only challenging to track but also extensively regulated,” he said.
Meanwhile, Dr Mark Smith, the Co-Chair for the Sustainability Beauty Coalition and Director General at NATRUE also believes that the optimum approach is to take a concerted end-to-end approach to sustainability.
“For any manufacturer, decarbonisation relative to Scope 1, 2 and 3 emissions across both their operations and products remains a fundamental necessity. By evaluating the upstream and downstream impacts, manufacturers can identify where investment is needed, and implement changes to improve their sustainability,” he said.
“In relation to the brand profile, it’s crucial to consider the sustainability of a product through a concerted end-to-end approach,” he continued. “Since sustainability consists of three pillars (social, environmental, economic), a holistic approach must consider everything from eco-design to ethical and sustainable sourcing of raw materials, to product formulation, manufacture and packaging, and eventually to how this impacts the consumer and post-consumer phases.”
According to Dr Smith, the fight against greenwashing is a fundamental task to ensure a level-playing field for manufacturers, support changes in consumer behaviour, and build consumer trust.
“To prevent greenwashing, there are several avenues to explore,” he said. “Fundamentally, all brands need to be aware of the existing regulatory framework in the market(s) they place their product(s) since this could impact the claims they make.”
He highlighted that claims may not only be limited to sector-specific cosmetics legislation but may also include compliance with trading laws, specific legislation for green claims substantiation or conformity with regulatory guidance.
The CMA published its Green Claims Code guidance back in in September 2021 and has included a checklist for businesses, as well as examples and case studies in the guidance to help them understand potential grey areas.
Dr Smith also drew attention to the USA FTC’s Green Guides and the EU’s proposed ‘empower consumers for the green transition’ and ‘green claims’ Directives.
“To determine if such a claim is reliable (i.e. substantiated and not misleading), it is necessary to verify that the information provided is clear, unambiguous, and justified by scientific evidence,” he explained.
Third-party certification to aid transparency
The use of private and voluntary standards, such as NATRUE and B-Corp, combined with the regulatory compliance for that region can offer a basis to support the truthfulness of ‘green’ claims like ‘natural’ or ‘organic’ through third-party certification. In many ways, this offers the highest level of reassurance, as this kind of transparency can, in turn, yield trust.
“Certification ensures that defined characteristics are maintained throughout the supply chain, sustainable actions are traceable, and product claims are supported,” said Dr Smith. “A ‘claim’ is synonymous with a company statement issued about the qualities of its products and, more broadly, about the advantages and benefits they are supposed to offer. A ‘green claim’ is no exception.”
He advises that when considering certification, it is important to evaluate the label criteria, which should ideally be based upon an internationally recognised standard. This may include private voluntary schemes that allows for an independent third-party certification process.
For example, the NATRUE label criteria is an established example of this and sets a wide range of requirements from across the supply chain ranging from sourcing and formulation to packaging.
How to avoid 'greenhushing' accusations
Sometimes it can seem better to say nothing and ‘fly under the radar’ when it comes to discussing a particularly inflammatory topic such as sustainability with customers. However, this mentality, which has been adopted by some businesses, has instead sparked accusations of ‘Greenhushing’.
Greenhushing is basically the outcome of presenting vague, exaggerated, or unsubstantiated ‘green’ claims that could potentially expose the brand to regulatory scrutiny and reputational damage.
“When a brand is focused on natural products or sustainability, a key element is to strike a clear balance between positive, factual communication but without exaggeration. In a nutshell: verification and transparency are essential, and the key message is to communicate your commitment without misleading your customers,” advises Dr Smith.
While he acknowledged that there could be an ‘adaptation period’ where brands want to lower their risk, he advised that: “Ultimately, everyone in the value chain, from suppliers to producers to consumers, needs transparency in order to reduce confusion, aid innovation and facilitate informed choices.”
“Brands that both align their claims with established regulatory guidance and requirements and are able to adequately substantiate such claims via third-party certification are best placed to mitigate such risks,” he concluded.
