How to avoid the ‘greenwashing’ label

Improving organisations’ sustainability credentials is becoming essential across all industries to avoid claims of greenwashing.

More and more stakeholders are also putting pressure on companies to cut their emissions. Now more than ever, organisations need to make a concerted effort to reduce their impact on the planet if they want to meet the expectations of their customers, employees and stakeholders.

“For many businesses that are starting to embrace sustainability, it is difficult to know where to start and despite genuine efforts, businesses can fall into the trap of greenwashing by claiming they are sustainable before they truly are or by overstating the efforts they have made,” Sophie Legg, Data Analyst at TEAM Energy, said. “This could be done by making broad statements, exaggerating positive factors in marketing materials or advertising products as ‘eco-friendly’ when perhaps they are not in all aspects.

Understandably, no business wants to be accused of greenwashing and despite the best intentions, organisations risk coming under fire for the work they have or have not done to become sustainable. In particular, larger and more public businesses could be concerned that whether they announce their work around net zero or not, they will be opening themselves up to scrutiny.

In a 2021 survey by Quilter Investors, it was found that when it comes to investing in a business’ Environmental, Social and Governance (ESG), 44 per cent of investors were concerned about greenwashing.

According to a survey by Futerra (2019), 45 per cent of Generation Z would trust an organisation more if they were honest about the sustainability challenges they face. A KPMG report found that 30 per cent of consumers look for sustainability when purchasing goods and services from a business. As Generation Z’s purchasing power grows, it is becoming clear that organisations must change the way they operate to meet the expectations of new generations to remain desirable in the market.

“It is important for businesses to lead the way in net zero commitments and use their platforms as a force for change,” Legg continued. “By understanding their operations’ carbon footprint and what they need to do to reduce their emissions, organisations can do their best to avoid greenwashing claims.

“Most organisations that choose to offset their emissions are often doing it to make positive change. However, no matter how good your intentions are, it is easy to fall into the trap of shouting about the work you are doing before you should and then get accused of greenwashing. Organisations that don’t say anything at all in fear of being accused of greenwashing are doing something just as frowned upon, ‘greenhushing’.

“By not making any announcements to your customers, or even your employees and stakeholders, that you are working to reduce your company’s impact on the planet, means that no one can give you feedback and help improve your net zero journey.

“By choosing complete transparency, businesses can demonstrate their actions, openly discuss the difficulties they have overcome, own the mistakes they make and show the great work they are doing. This will allow customers to prove their loyalty to the brand, employees to feel inspired, and the organisation can demonstrate their positive impact on the planet.

“It is important to remember that this journey is not an easy one and businesses will undoubtedly get things wrong,” Legg concluded. “but by being open about plans and experiences customers will appreciate the honesty more than a polished public statement, and you may influence other organisations to do the same.”