Greenwashing or not: When can you label something as sustainable, local, eco-friendly, ethical, green, or carbon-neutral?

The short answer is: only if you can explain and prove concretely why something is sustainable. Otherwise, it is misleading.

What your company states about sustainability must be accurate, and you must be able to demonstrate why. This often goes wrong, not necessarily because what is said about sustainability is untrue, but because it fails to prove the statement. In cases of ambiguity or lack of substantiation, you risk not only having to remove the statement but also facing high fines.

The Authority for Consumers and Markets (ACM) actively enforces this. H&M and Decathlon had to adjust their ‘Ecodesign’ and ‘Conscious choice’ statements last year and pay substantial compensation in the hundreds of thousands of euros. Ryanair modified misleading ‘CO2 compensation’ claims earlier this year. Vattenfal and Greenchoice have pledged to better inform consumers and must pay a total compensation of 1.4 million euros. This year, the ACM continues to focus on addressing misleading sustainability claims in products and services.

At the end of my blog, you can read about the 5 points to consider to prevent greenwashing and ensure that your company’s sustainability statements comply with (legal) standards. First, here’s more information on sustainability claims.

What is a sustainability claim?

Firstly, it’s crucial to understand what a sustainability claim is. Sustainability is not a precisely defined concept, and there is (still) no legal definition of sustainability.

Follow the Money rightly states, “As long as sustainability gets no definition, the market takes advantage of it.”

The Authority for Consumers and Markets (ACM) published guidelines on sustainability claims in early 2021, providing explanations. The ACM examined claims from various companies, including H&M and Decathlon. The outcome of the investigation into H&M was that without clarification, it is unclear what the labels ‘conscious’ and ‘conscious choice’ mean. Furthermore, H&M places sustainability intentions on its website without clearly stating the current status. In the case of Decathlon, the ACM concluded in its research that the term ‘Ecodesign’ is used without explaining its meaning, and the explanation of the sustainability filter on Decathlon’s website is vague and unclear.

The concepts of Ecodesign by Decathlon and conscious choice by H&M are sustainability claims according to the ACM. Still, there are many other possible expressions that qualify as sustainability claims. The ACM categorizes under the broad concept of sustainability claims: (a.) environmental claims and (b.) ethical claims:

1. Environmental claims imply that a product or activity of a company has no or fewer negative consequences for the environment or climate or offers environmental benefits.
2. Ethical claims give the impression that a company adheres to certain ethical standards, such as labor conditions or animal welfare.

When is a sustainability claim misleading?

A sustainability claim is misleading if a company communicates factual inaccuracies or provides misleading information to consumers. This is also the case if essential information is omitted or if the information is not clear or understandable for the consumer. For example, it is misleading to portray flying as a sustainable choice because, even with CO2 compensation, flying is a highly polluting means of transportation. Airlines may not suggest that flying is sustainable because of CO2 compensation. If CO2 emissions are offset, it must be clearly stated that CO2 compensation does not make flying more sustainable; otherwise, it is misleading.

FIVE TIPS TO PREVENT GREENWASHING

1. Clearly state the sustainability benefit of a product

Be specific about the sustainability advantage. Just ‘sustainable’ is too vague. If your product scores well in terms of animal welfare or working conditions, say so and explain why. Additionally, it is essential to be cautious when using legally protected terms, such as ‘organic.’ You may use such terms only if you comply with certain EU regulations.

2. Support sustainability claims with facts and keep them up-to-date

It is crucial to demonstrate that a sustainability claim is based on facts. For products, a “footprint” or “lifecycle” approach can be used, evaluating sustainability for each phase of the product’s life, from raw material extraction to recycling. It is wise to differentiate between different types of impact: people (social impact), planet (environmental impact), and profit (economic impact). Additionally, you must continue to verify whether your claims are still up-to-date.

Tony’s Chocolonely sets a good example: clear communication about the current status (the percentage of cocoa farmers working with Tony’s earning a living income is 37.6% in 2022), existing challenges (Tony’s cannot buy all beans from affiliated farmers yet), and their ambitions (that 100% of cocoa farmers earn a living income).

3. Comparisons with other products, services, or companies must be fair

If your product is made of more sustainable material than a competitor’s product, you naturally want to emphasize that. However, products can only be compared if they meet the same need and serve the same purpose. A packaging for chocolate is different from a packaging for soda, so a comparison is not fair. State, for example, what percentage of the material is recycled (‘made from 50% recycled material’)—clear and based on facts. However, the claim ‘contains 50% more recycled material’ is unclear because it does not specify what it is compared to.

CoolBest recently made a mistake by stating on its new, albeit much more sustainable, packaging: “Now in a plant-based pack,” while there was still a small percentage of aluminum in the packaging. CoolBest had to remove this slogan from all its packaging. Ensure that you do not compare apples to oranges and that your claims are clear and based on facts.

4. Be honest and specific about your company’s sustainability efforts

Transparency about the sustainable choices your company makes is crucial. In what area does your company perform well – people, planet, and/or profit? Claims like ‘on the way to carbon-neutral’ may be acceptable under certain conditions, but it must be measurable. You must be able to demonstrate that you have conducted an actual measurement, what the current status is, and how you plan to achieve carbon neutrality. Details about achieved results and objectives must also be accessible to consumers.

5. Ensure that visual claims and labels are helpful for consumers and not confusing

Do not give a product or service a ‘green’ label if you cannot clearly explain why it is a sustainable choice. Do not use green leaves or similar images if there are no concrete and demonstrable sustainability benefits. If you label something as an ‘eco’ variant, you must be able to explain clearly the differences with the existing variant and why the ‘eco’ variant is more sustainable.

The same applies to labels: state it as it is. Familiarize yourself with the labels you use and ensure that you do not incorrectly give the impression that something is an independent label when it is, in reality, a company symbol or logo. If something gives the impression of being an independent label, it must indeed be so.

If, after reading these tips, you still have doubts or questions about sustainability claims or advertising, feel free to contact us.