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Heightened scrutiny around greenwashing

How can businesses ensure their environmental reporting is accurate?

In today's society, consumers are increasingly favouring businesses with a strong sense of purpose that aligns with their values.

Research from BSI shows that nearly half (47%) of consumers consider a company’s purpose when making purchasing decisions, while two-thirds (66%) will abandon a product or business acting inconsistently with its stated purpose.

For purpose-driven organizations, there is clearly an opportunity not only to lead the charge towards sustainable systems and solutions, but also to achieve commercial gains in the process. There are many facets to this, from decarbonization to more efficient use of water, and, as this year’s World Environment Day showcases, preserving and restoring natural resources.

With this in mind, green marketing – the practice of promoting sustainable and eco-friendly products and services – is an increasingly valuable tool for organizations to showcase their sustainability efforts and share best practice. Sustainability storytelling can offer significant competitive advantages, whilst also aiding knowledge sharing and support international initiatives such as World Environment Day. However, it is crucial that sustainability claims are credible and able to withstand scrutiny.

To address this, the UK's Competition and Markets Authority (CMA) introduced the Green Claims Code in 2021. Specifically, this code aims to ensure the transparent promotion of sustainable products and services, combating greenwashing tactics where products are made to appear more sustainable than they truly are.

Many consumers actively seek out green products and services, yet distinguishing genuinely ethical practices from mere marketing claims can be challenging. Green branding strategies typically use words like “organic”, “natural”, “eco”, and “green”, yet consumers may wonder about the practical implications behind these terms. So, how can organizations assure consumers of the authenticity of their claims?

Martin Townsend, BSI Growth Director, has highlighted the concern that simply labelling claims as greenwashing may enable organizations to avoid discussing their sustainability challenges and opportunities. Known as “greenhushing”, this occurs when organizations opt to keep their sustainability targets and performance private for fear of falling short under stakeholder scrutiny.

To drive real progress, the spectrum doesn’t have to be strictly divided between greenwashing and ethical practices. As Martin explains, providing clear alternative pathways can give organizations greater confidence in discussing their sustainability ambitions and the actions they are taking to achieve them.

There are many steps organizations can take to demonstrate their purpose and verify their sustainability claims to avoid greenwashing and build trust. By implementing sound sustainability measures and accurately demonstrating their impact through reporting and sustainability storytelling and marketing, organizations can help society progress towards a sustainable world, support international sustainability initiatives and experience commercial gains:

Back up the buzzwords

To protect marketing messages against CMA fines and ensure alignment with trusted practices, organizations can prioritize the use of internationally agreed definitions that consider everything from working conditions to manufacturing, distribution, and waste disposal practices. One tool for this is the environmental labels and declarations standard (ISO 14021), which specifies the requirements needed for any self-declared environmental claims, such as those used in statements, symbols, and graphics.

Share the full picture

A t-shirt labelled as being made with organic cotton could contain as little as 0.5% organic material. Similarly, “organically” produced cotton does not equate to “ethically” produced cotton. A lack of transparency about key details may jeopardize consumer trust or be deemed to be in breach of the CMA’s Green Claims Code.

Be proactive

ESG (Environmental, Social and Governance) reports are intended to transparently share ESG-related risks and opportunities, as well as short and long-term plans to improve on sustainability measures. By proactively providing this information, organizations can present a comprehensive sustainability and value story. Additionally, integrating ESG information with financial results ensures that sustainability goals are aligned with long term growth targets.

Get help with adopting trustworthy sustainability reporting

In recent years, the number of ESG regulations and standards has nearly doubled, with more than 600 ESG reporting provisions now in place globally.

With this surge having created a myriad of interpretations of sustainability definitions, the International Sustainability Standards Board was launched at COP26 to establish a single framework that regulators globally can use to set rules on sustainability disclosures.

It is hoped that the application of consistent environmental reporting standards will bring greater clarity and assurance. These disclosure frameworks require a company to demonstrate how it can evidence meeting the reporting criteria.

BSI can be a trusted partner in this process. Through our Research and Intelligence service, we can pinpoint relevant standards, highlight any updates, and identify opportunities to participate in shaping new standards.

Our Standards Watch service ensures organizations remain fully informed via monthly, bi-monthly, quarterly, or annual reports alongside regular status updates. It includes a review of the latest trends and innovations in any relevant areas of standardization. Given the rate of progress, organizations tell us that this is a vital service that keeps them up to date and compliant with the latest developments.

To tackle greenwashing, work is underway in creating and using industry-wide “common languages” for sustainability measurement and performance. BSI has vast experience as a catalyst for sustainable change, pioneering credible methods and approaches for measuring and assessing various products and services.

As an example, BSI convened a steering group to develop an internationally adopted specification for the demonstration of carbon neutrality (PAS 2060). Verification of this standard helps substantiate claims that businesses are indeed carbon neutral.

To verify a product’s carbon neutrality claim, The BSI Kitemark™ for carbon neutral products certification program, based on ISO 14067 and PAS 2060, confirms that a product has been assessed against international standards and passed rigorous testing criteria.

Through our services, we also help organizations to shape their sustainability strategies (Find out more).