Greenwashing - What is it? Why is it bad? And what's being done to combat it?

Freeths

So many businesses are making environmentally linked claims about their products and services to sell more of them. They might say that their product doesn't harm the environment or, as a minimum, is more sustainable than the competitors’. When those claims are misleading or false, that's greenwashing.

What is being done to combat greenwashing?

The Advertising and Standards Agency (ASA) has had high-profile greenwashing cases, resulting in those brands being made to remove adverts that contain such claims. Likewise, the Competition and Markets Authority (CMA) published a green claims code at the end of last year to help businesses avoid greenwashing. Its advice is; if you follow the six principles in the code you should stay clear of greenwashing.

The six principles:

• claims must be truthful and accurate
• claims must be clear and unambiguous
• claims must not omit or hide important relevant information
• comparisons must be fair and meaningful
• claims must consider the full life cycle of the product or service
• claims must be substantiated

Implications of making greenwashing claims

Look at the whole lifecycle of the product and, if you are going to make comparisons, make sure that they're reasonable and fair. Essentially, don't say things that are misleading. If you fail to do so, be aware that the CMA now has teeth. It could be the CMA, rather than a court, which awards compensation for a consumer who's been on the wrong side of greenwashing claims. In addition, the CMA can issue penalties of up to 10 per cent of annual global turnover for organisations and £300,000 penalties for an individual claim.

But of course, as well as these penalties, the big blow to a business being caught greenwashing is the damage to its brand as well as the diminishing public confidence in its products and services, which may even reduce its share price.

If you need further advice in relation to greenwashing, how to avoid it and how to comply with the green claims code, please contact  Kirstin Roberts, Director in Clean Energy, Waste and Sustainability

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Further information on Greenwashing will also be available on Freeth's Webinar: Sustainability with substance – avoid greenwashing with certification and collective trademarks. For further information and to register your interest please contact Nicola Dolman.