Greenwashing environmental credentials

Firms making ‘dodgy’ green claims could face action, warns Nick McAleenan, Partner at JMW Solicitors.

“Greenwashing” is nothing new. In the 1980s and 1990s The Body Shop tapped in, very successfully, to the marketability of green consumerism. By encouraging customers to bring along their used bottles for refills, and announcing its support for various environmentally friendly campaigns, The Body Shop recognised that there was value in being seen to care about green issues and social responsibility – even if some of their products at the time were not especially sustainable.

They asked customers what seemed at the time to be a fairly odd question: do you need a bag? Of course you did! However, the UK’s “tax” on single use shopping bags would take many decades longer to be introduced.

Fast forward to the 2020s and COP26, and green virtue-signalling is arguably on the increase. Business is currently adapting to an evolving public concern about the environment. A global shift in societal attitudes has fed into new consumer preferences, increased political scrutiny of companies’ activities, and pressure from corporate investors.

Big Business in particular has become subject to an ever-expanding range of targets, ESG considerations and environmental reporting obligations. These KPI checks have been imposed by a mix of new law, regulation and interventions from supra-national organisations. In particular, there has been a proliferation of environmental ‘disclosure’ requirements imposed on large companies.

An increase in businesses making slightly unlikely green claims has ultimately led to action by the advertising regulator. In September 2021, the Advertising Standards Authority announced that it would publish new guidance targeting misleading green adverts and tackling initiatives which encourage unsustainable behaviours. It announced research projects into carbon neutral and net zero claims.

For example, if you pay £15 to offset the impact of your globe-trotting flight to Brazil, is this financial sacrifice actually an appropriate amount of money or just ‘tokenism’? The ASA intends to target specific issues, starting with claims concerning energy, heating and transport, but going on to other topics such as plastic alternatives. This focus will no doubt provide food for thought for many marketing executives, and guidance is expected in Spring 2022.

Similarly, in September 2021, following an earlier investigation and consultation, the Competition and Markets Authority published a ‘Green Claims Code’. The Code sets out six principles ranging from a requirement that companies ensure that claims are truthful and accurate, through to a requirement for substantiation. The regulators clearly have the issue in their sights.

Environmental activism is also evolving. Campaigners are increasingly using litigation to challenge environmentally controversial behaviour. Of course, social media has played its part in the battle for hearts and minds. Greta Thunberg has five million followers on Twitter alone, which is roughly double the global membership of Greenpeace.

Campaigners are also challenging environmental claims made in advertising. Predictably, some adverts run by airlines and car manufacturers have featured in ASA cases. However, less well known is that shale extraction sites and wind farms have also begun to come in for attention too.

Global understanding and opinion have moved on since The Body Shop pioneered green consumerism many decades ago, but businesses now wishing to demonstrate their eco-credentials must keep in mind an evolving regulatory environment.

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