In the wake of the landmark UN IPCC report released this week and ahead of the COP26 summit in Glasgow in three months’ time, there’s no escaping the harsh reality and immediacy of climate change.
As a result, businesses are facing increasing regulation and growing customer demands to bring transparent, environmentally-friendly products to market to stay competitive and remain profitable, with those failing to legitimately shout about their socially responsible, ‘green’ solutions left behind.
As leading brands including Coca-Cola, Oatly and L’Oreal get caught out by misleading claims concerning packaging to emissions, here we examine the true scale of the greenwash problem.,
In this blogpost, we will share best practice requirements outlined by the CMA when it comes to making environmental claims and explain how transparency technology can help businesses visualise their supply chains all the way back to source to support responsible sourcing objectives and operations.
The growing ‘greenwashing’ problem
The phenomenon of ‘greenwashing’ has escalated in recent years as companies continue to compete for attention from planet-focused consumers. This greater urgency and desire for ‘green’ marketing credentials means it is not always easy to whether claims are verified or embellished.
To address the growing greenwashing issue, in November 2020, the CMA launched an investigation into misleading environmental claims with plans to step up enforcement, while in February the ASA launched its ‘Climate Change and the Environment’ project to consider how effective current rules are in governing environmental claims.
Working in conjunction with the International Consumer Protection Enforcement Network (ICPEN) and scanning claims across 500 different websites, not solely in the UK, the investigation uncovered as many as 40% of ‘green’ claims could be construed as misleading.
As many as 40% of ‘green’ claims could be construed as misleading.
CMA & IPCEN investigation
Best practice guidance for making ‘green’ claims
To provide direction for organisations seeking to make environmentally conscious claims, the CMA released draft guidance in May 2021 with the aim of reducing misleading, inaccurate statements.
They proposed all environmental sustainability claims should follow six key principles:
- They must be truthful and accurate
- They must be clear and unambiguous
- They must not omit or hide important information
- They must only make fair and meaningful comparisons
- They must consider the full life cycle of the product
- They must be substantiated
With the CMA’s principles in mind, it’s more important than ever for businesses to see the full scale of their supply chains and have access to accurate, actionable data and insights to validate each claim made.
Achieving supply chain visibility for green marketing
Despite mounting consumer expectation for transparency and need from industry, it seems many businesses are behind the curve in reality.
Recent research from Procurious found that less than 5% of supply chain professionals are monitoring suppliers beyond tier 1, with 66% citing a lack of visibility as the biggest challenge. The findings also suggested best practice strategies to improve sustainability practices, with ‘supplier collaboration’ and ‘leveraging technology to monitor risks’ in the top 4.
So with environmental impact transparency in demand, why are businesses slow on the uptake, and how can digital transformation projects and technologies help?
How can supply chain transparency technology support green marketing claims?
For businesses seeking supply chain visibility, considering a platform such as Authenticate can help to identify each link, or tier of a supply chain to provide assurance when making claims for raw ingredients, finished goods and much more.
With a suite of digital tools covering audits and assessments, product specifications, KPI performance and bespoke interactive dashboards, organisations have the data and actionable insight needed at their fingertips to be able to validate environmental claims, prior to external release to help mitigate risk and protect not only reputation, but also the planet.
To start achieving full scale transparency and stop with the greenwash, get in touch with the team to discuss your requirements.
Want to find out how we’re helping other leading ‘green’ brands to mitigate environmental risk? Read all about our involvement with Certified B Corp, Oddbox.