Tue, 21 Feb 2023 08:31:37 GMT
“Forty percent of global CEOs think their organisation will no longer be economically viable in ten years’ time, if it continues on its current course… Most of those CEOs feel it’s critically important for them to reinvent their businesses for the future.” PwC’s 26th Annual Global CEO Survey
Greenwashing 2.0 and Updated Guidance on Green Claims
Greenwashing (enhancing or fabricating the environmental impact of a product or service) is a growing problem. Planet Tracker talks about how sophisticated it is becoming, and recently identified six different tactics being used by greenwashers, misleading and perpetuating poor performance. These include Greencrowding, Greenlighting, Greenshifting, Greenlabelling, Greenrinsing and Greenhushing (read more about them here).
The European Commission says that 40% of environmental claims, such as ‘green,’ ‘eco’ or ‘environmentally friendly’ are unsubstantiated. In response to these trends, the Advertising Standards Authority in the UK has just released updated guidance on misleading environmental claims and social responsibility in advertising. Examples of general environmental issues which this addresses include:
● Clarity of claims - including interpretation and knowledge of audience.
● Clarity of terms - meaning, qualifications and limitations must be clear, eg. There is little consensus to the meaning of Carbon neutral and net zero.
● Substantiation - robust documentary evidence for claims.
● ‘Full lifecycle’ claims eg. Good for the planet, Helping to support a more sustainable future, 100% eco-friendly, Environmentally friendly, Zero emissions, Less plastic
● Scientific opinion (do not claim universal acceptance if there is significant opposing opinion).
● Adverse effects - products that do not damage the environment should not claim that the product has been changed to make it safe or, if a product is, by its nature, environmentally damaging, it should not be implied that by improving it you have stopped an adverse impact.
● Environmental benefit - substantiated or technically correct benefits in ads must take care not to mislead eg. by highlighting the absence of an environmentally damaging ingredient if that ingredient is not usually found in competing products.
● Energy efficiency class and product fiche information ie. BCAP EU code.
Clarity and qualification are the basic ingredients to making a responsible claim, and marketers are being reminded to never assume that audiences have knowledge or understanding of the meaning of certain claims. Even brands breaking category boundaries need to be vigilant. Read more detail in the report.
Claims and the Corporate Responsibility Monitor
This guidance also comes as the new Corporate Responsibility Monitor is published. It assessed Net Zero goals and plans for 24 major global corporations (offering insight into global trends). The report found that the delivery of the required 90%+ emissions reduction and offsetting is unclear: “Most companies’ climate strategies are mired by ambiguous commitments, offsetting plans that lack credibility and emission scope exclusions, but replicable good practice can be identified from a minority… We found that most of the companies’ strategies do not represent examples of good practice climate leadership. Companies’ climate change commitments often do not add up to what their pledges might suggest.”
France Leads the Way on Greenwashing Laws
While the ASA provides guidance, many governments are now advancing policy to reduce harmful advertising and better align advertising’s output with climate action plans. Draft EU legislation proposes penalising companies that make unsubstantiated sustainability claims. France is one of the countries leading the way here - recently introducing legislation against greenwashing, specifically clamping down on terminology like ‘carbon neutral’. Under this ‘Climate and Resilience Law’, France now prohibits companies from claiming in an ad that their products or services are carbon neutral (or similar equivalents such as zero carbon or fully offset) unless they provide:
● A Greenhouse Gas (GHG) emissions report integrating the direct and indirect emissions of their products or services
● The process by which the GHG emissions of their products or services are: avoided, reduced, or (offset and the plan for GHG emissions reduction).
● The methods for offsetting residual GHG emissions that comply with minimum standards.
Like its fossil fuel ad ban, failure to comply is punishable by up to €100,000 for repeat offenders. It’s expected that other governments will be influenced by this guidance.
Business Sustainability Mismanagement and Risk
“If you earned £40,000 a day from when Jesus was born to the present day, you would still not make as much as Shell did in profits last year” Greenpeace UK
Another big environmental story to break over the last few week’s is ClientEarth’s lawsuit against Shell’s board. It’s a world-first derivative action in the High Court of England and Wales and it alleges that the Shell Board is mismanaging climate risk, breaching company law by failing to manage the material and foreseeable risks posed to the company by climate change (failing to adopt and implement an energy transition strategy that aligns with the Paris Agreement). We’ve also seen youth activists continue to put pressure on brands not acting responsibly - young UK activists voicing out for ‘fair fashion’ went viral this week for storming the stage where a Boohoo panel on ethics was being hosted. But what does it mean for brands? While it is complex, there is a growing and significant risk to brands for failing to invest in sustainable transition.
Clean creatives' AdNetZero Campaign
Industry activist group Clean Creatives drove some important conversation last week around the AdNetZero group. AdNetZero is ‘advertising's response to the climate crisis’ - it was launched in 2020 as an action plan to drive essential sustainable action and transformation. However, Clean Creatives reserved the @AdNetZero handle on Twitter, Instagram and TikTok and launched a campaign on February 7th to pressure the industry group to take a stance on agencies’ work with fossil fuel companies ahead of the AdNetZero U.S. launch. Read what they had to say here: “We’re not trying to impersonate Ad Net Zero. We just think that #AdNetZero is impersonating a *real* climate plan. You cannot effectively respond to the climate emergency while working for the people responsible for it…You need to fix the loophole in the Ad Net Zero framework by working with independent experts on a plan to stop work with polluters.”
Double down on evidence and accuracy of brand claims with measurable impact. Make sure to identify your data gaps: “Brands that fail to take action to understand their carbon neutral and net zero data gaps face huge new regulatory, financial and reputational risks. From legal action and fines to spikes in operational costs from having to take down non-compliant claims – there are direct cost implications from day one. When you add this to the reputational damage with consumers and investors, businesses simply cannot afford to get this wrong in this environment. Businesses must take the first step in understanding their data gaps for compliance so they are confident that they will not fall foul of rules in the UK or other markets.” Abbie Morris, chief exec of Compare Ethics (The Drum).
Work needs to be done but don’t let perfect be the enemy of good. Welcome ‘corporate’ activism, even when it’s difficult: “Change is happening within business. [But] companies aren’t perfect and sometimes their education about their impact is so low that they misinform consumers. If we expect definitions or regulation to be perfect, we’ll never get anywhere because we need to empower marketers to better understand the elements that are misinforming us… There just needs to be more ballsy-ness from communications and marketing teams to internally champion something. But those that are prepared to fight the fight often get burned out. Nobody gets paid extra for being an activist, right?” Lucy von Sturmer, Creatives for Climate (Sustainable Brands).
Think about how your brand can influence others (companies and citizens): Social change is central to avoiding the worst impacts of climate breakdown: “...the best hope for shaping a positive climate future lies in the ability of society to make fundamental changes (“human agency”)” Hamburg Climate Futures Outlookview more - Trends and InsightTHINKHOUSE, Tue, 21 Feb 2023 08:31:37 GMT