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Blog Post 1 February 2022

Green Claims Code: are you unintentionally greenwashing?

What is greenwashing and is your business doing it unknowingly? All businesses across every sector endeavour to be sustainable, so that they can shout about it to potential and current customers who are increasingly buying green.

However, there’s a lot of confusion around different labels when it comes to sustainability, and organisations have previously been called out for misleading consumers or ‘greenwashing’ with what they say or how they advertise. So, how do you know what should you do and what are the consequences?

The Competition and Markets Authority (CMA), the UK’s primary competition and consumer authority, implemented new rules last year to ensure that environmental claims made by businesses comply with the updated consumer protection law. CMA co-ordinated a global review of randomly selected websites to better understand the impact of green marketing on consumers, and found that 40% of green claims made online could potentially be misleading. These include vague statements that use unclear language such as ‘eco’ or ‘sustainable’ without supporting evidence, unaccredited own brand eco labels, and omitting information to appear eco-friendly.

The new rules, known as the Green Claims Code, ensure that any environmental claims on goods and services do not mislead customers and can be substantiated. The rules are simple:

  • 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.

The new code aims to put an end to greenwashing by outlining these six key principles businesses must follow when making environmental claims. If they don’t, they risk facing legal action.

How can you make sure you abide by these rules?

So how can these principles be implemented, and what common mistakes should be avoided when making green claims? The first thing you need to do is know what environmental claims your business is making and ensure you understand the ways in which they could be misleading.

Environmental claims suggest that a product or service, process or brand is better for the environment than an alternative product or service. To ensure your claims are true and will meet the above criteria, you should understand what green claims your organisation is making and what format they are in (videos, social posts, infographics, adverts etc.) so that consumers won’t misinterpret your claims.

When applying your green claims code to your organisation, don’t forget your supply chain. You Scope 3 emissions are something you need to think about when making marketing claims about your sustainability.

Scope 3 emissions: There are different types of greenhouse gas emissions which are categorised into scopes. Scope 1 covers emissions from your organisations owned sources. Scope 2 covers indirect emissions from purchased electricity, heat and steam. Scope 3 includes all your other indirect emissions across your value chain, such as purchased goods, business travel, distribution and investments.

Looking at financial and energy-usage reports can be a great starting point to help understand the baseline of carbon emissions and discover or refine green claims across Scope 1, 2 and 3 emissions.

No matter the size of your organisation, you can get an understanding of the wider landscape of organisational sustainability here:

Environmental Social Governance (ESG)

Carbon Literacy Project

Circular Economy

Global Reporting Initiative (GRI)

Green Claims Code: best practice

When claiming green or sustainable credentials or statistics, you should always:

  • Be able to confidently answer the six questions of the Green Claims Code.
  • Provide information that validates your claims. This includes providing easily accessible links for your customers (don’t hide your reports!)
  • Ask to see the information which validates your claims, even from external sources, so you can be confident the message hasn’t changed from person to person.
  • Have a framework in place to measure your progress so you’re able to update it and share with interested parties.

You should also try your best to avoid:

  • Using generic words such as recyclable, organic, environmentally friendly etc. unless you can validate the use of those words.
  • Using generic marketing labels or practices, such as eco, green, images of fields etc., which cannot be backed up with facts.
  • Making claims based on ambition without having a strategy that demonstrates exactly how you can reach, measure and report on those claims.
  • Making claims that include your scope 3 emissions without information from your external supplier, for example: sustainably sourcing your materials, prioritising low carbon business travel, purchasing from companies with good sustainability credentials.

This may sound like a technical rabbit hole, but understanding the Green Claims Code will be paramount to your business keeping up with the rest of the world to reach net zero and being able to adapt for a greener future.

That’s not to say small wins can’t still be valuable to consumers – saying you’ve improved your office’s energy efficiency by 20% or made packaging more recyclable (with evidence) are still valuable, as many small interventions can add up to be significant. By measuring how far you’ve come, you can present your business’ journey to customers to increase engagement and loyalty, as well as protecting you from stakeholder scrutiny.

It’s all about being honest and authentic – say what you do and do what you say to ensure you’re not greenwashing – or you’ll be called out on it by consumers or the CMA. You should now have a better understanding of why it’s so important for your organisation to be aware of greenwashing your marketing claims.

Here at Energy Saving Trust, we can help you understand and develop your green claims, along with support you with planning, implementation and evaluation for your business operations. We can also support you in communicating your sustainability achievements to customers to avoid greenwashing with our Energy insight consultancy.

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Last updated: 31 January 2022