How can brands avoid Greenwashing?
As efforts across our industries intensify to meet the climate crisis challenge head on, so too does the accusation of ‘Greenwashing’.
So, what exactly does the term mean, is it always used fairly – and what can brands and companies do to avoid it.
We spoke with Victor Timon, partner in the international law firm Lewis Silkin who heads up their commercial practice in Ireland. Victor deals with B2C businesses across the country and makes it his business to be across the latest developments in consumer law.
What is Greenwashing?
Greenwashing is simply the process of conveying a false impression, or providing misleading information about how a company’s products are more environmentally sound. According to Victor, it is making claims that you cannot substantiate. That is, telling the public or your customers that you are sustainable, produce sustainably, or have sustainable or eco-friendly products etc, with no real basis for that claim.
Victor is clear also, that there is often an innocent use of the terminology, because we currently have a lot of poorly defined words that we use in this area.
Companies need to give consumers and other buyers reliable, comparable and verifiable information on environmental impacts of products.
What is being done to help people determine Greenwashing claims
Firstly, there is legislation coming soon that will force companies to prove their claims. There will be a series of codes that companies must abide by and a checklist of sorts that will allow them to select where exactly they fit into the terms ‘sustainable’ or ‘eco-friendly’ for example.
What will these pieces of legislation look like and when can we expect them
The first step is the EU’s “European Green Deal” which was published in 2019. As part of this project (to make Europe the first climate neutral continent by 2050), the EU has promised legislation to reduce the risk of false green claims, by compelling companies to substantiate environmental claims about their products. This will provide a standard methodology to measure their impact on the environment.
The second step is where The EU Commission gave a little more detailed plans in an agenda known as the “Circular Economy Action Plan”, which was published in October 2020. It proposes that the legislation would require environmental claims to be substantiated by using the EU Product and Organisation Environmental Footprint (PEF and PEO) methods, developed by the Commission’s Joint Research Centre. Victor tells us that we should expect to see a draft of this legislation by March of this year.
These two environmental footprints will measure 16 environmental impacts for a number of product groups and economic sectors, throughout their life cycle.
The final piece is what happened in November 2020, when the Commission published its “New Consumer Agenda” to empower consumers to play an active role in (amongst other things) the green transition.
The Commission aims to ensure that sustainable products are available to consumers on the EU market and that consumers have better information to be able to make an informed choice.
The Commission will present a proposal to equip consumers with better information on the sustainability of products and to fight practices, such as greenwashing or early obsolescence.
Circular Products and the Right to Repair
The Commission will also promote repair – and encourage more sustainable and “circular” products.
The EU Commission has acknowledged that consumers alone can’t drive this and says it will work with suppliers to encourage their pledges in support of sustainable consumption, beyond what is required by law.
Sitting alongside this is the Irish Consumer Rights Bill 2021 which will give effect to the EU Enforcement and Modernisation Directive 2019/2161.
Victor expects this to become law from May 2022. That Directive brings in GDPR type fines for breaches of consumer law (up to 4% of the offender’s annual turnover in the Member State affected).
What is currently in place for consumers who are concerned about Greenwashing
The Consumer Protection Act 2007 (CPA) is currently the only really relevant legislation under which a consumer could pursue a claim for greenwashing. It could be argued that the CPA currently provides rather weak remedies to consumers and indeed rather weak powers to take action for the Competition and Consumer Protection Commission (CCPC) who have responsibility for enforcing that Act.
We will have to see if the new powers given to the CCPC under the Bill/Directive and the fines it can impose, encourage it to take more proactive action against those guilty of greenwashing.
Consumer’s hearts and minds
Victor has suggested that companies will need to work hard over the coming months and years in proving their commitments to sustainability if they are to remain relevant.
Even when we have comprehensive (and evolving) legislation to compel brands to do remain honest, it is your suppliers, your customers and your employees that will want to see more from you as a business.
It is no longer enough to claim ‘green-ness’ or talk about being a sustainable organisation, you will have to prove it to those who will ultimately be responsible for keeping you in business.
Lewis Silkin are an International Law Firm, helping clients to develop their ideas, by promoting a positive change in their environment and communities. They work with clients to deliver their ESG agendas, understanding their corporate strategy, managing risk and opportunities and maximising possibilities. A concept called “horizon scanning” is perfumed for clients, telling them what is coming down the line in terms of domestic and EU legislation relating to sustainability, so they can prepare for it in advance.
We quite like their company ethos of ‘Bravery and Kindness’