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Greenwashing: The risks of overstating environmental credentials

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The Changing Markets Foundation, a Dutch environmental group, has identified systemic “greenwashing” in the UK food sector involving claims such as ‘climate positive’ ‘carbon neutral’ and ‘net zero,’ as well as specific claims about low methane.

Why is greenwashing a problem?

Greenwashing is a catch all phrase for overstating your environmental credentials. It is a problem because making a claim that cannot be substantiated is against the UK’s advertising and consumer rules. These rules are enforced by the Advertising Standards Authority, the Trading Standards Service and the Competition and Markets Authority.

The ASA’s guidance on ‘The environment: misleading claims and social responsibility in advertising’ was updated in February 2023 and made clear that advertisers should not use phrases such as ‘carbon neutral’ and ‘net zero’ unless “they have robust substantiation”.

In order to substantiate their claims, manufacturers and retailers look to their suppliers for the substantiation required to advertise their products as “green”. As suppliers to the food sector, anyone in the agricultural sector could be called upon to demonstrate their “green” credentials to support a green claim of the final product. Any break in the supply chain could mean that the claim is not supported by “robust substantiation” and thus open suppliers up to a potential liability.

How to demonstrate environmental credentials without overstepping the mark

Consumers demand ever higher welfare standards and expect the agriculture sector to be managing assets to produce a positive impact on the environment.  As everyone knows, the Government’s ELMS scheme is also placing even more emphasis on the need for English agriculture to place the wider environment at its heart. Therefore, the key to “substantiation” is for the supplier to record the steps it is taking (or intends to take) and make sure that these steps form the basis for any “green” claims it makes (or is asked to evidence).

YouGov polling across the UK and Germany, commissioned by the Changing Markets Foundation, found that almost half (49%) of people regularly choose food products with environmental sustainability labels or certifications. From a commercial perspective, the survey also found that one in three (35%) of these consumers are willing to pay more for positive climate and animal welfare labels. This means that it makes good economic sense to leverage good environmental practices to deliver higher returns on investment.

However, on the flip side is that 59% of consumers were worried about the issue of corporate greenwashing. Further, the polling showed low levels of trust in sustainability claims about certain products, in particular meat and dairy products.

Changing Markets Foundation

Obviously, it needs to be recognised that the Changing Markets Foundation is an advocacy group trying to stop greenwashing and in this regard its website www.greenwash.com gives lots of examples which show who it has in its crosshairs. Having said that, its key findings are illuminating.  It found:

  • Greenwashing in the food sector is rampant” – not only did it identify the use of “absolute” climate claims such as ‘carbon neutral’, ‘climate positive’ and ‘net zero’ as made without substantiation but also regarded images of grazing cows and small family farms with happy animals as a more subtle form of greenwashing.
  • Meat and dairy companies responsible for greenhouse gas emissions were singled out for misleading green claims” on their products or in their other marketing materials.
  • It “identified vague claims, such as ‘planet-friendly’ and ‘sustainable future’ as misleading” as well as the inclusion of some of the most carbon-intensive food products in climate-friendly food categories.

Auditing suppliers’ “green” credentials – challenges for manufacturers

To offer some balance to the finding of “rampant greenwashing”, it should be recognised just how hard it can be to audit “green” credentials, to provide the evidence required to substantiate a marketing claim.

If an absolute claim, such as “carbon neutral”, is made in respect of a product as a whole, that means everything required to get the product from field to plate needs to be carbon neutral. In other words an assessment of the whole lifecycle of the product needs to be undertaken, which extends to any recycling of waste products. That means not only the product and its packaging but also the transport, the way the land is managed, the buildings are used, and even how the employees get to work, need to be assessed. Accordingly, this is very difficult to demonstrate.

The challenges for the agricultural sector in making “green” claims?

Given the difficulties in substantiating “absolute” green claims, a more realistic approach is to assess what you are doing well and make specific claims regarding those areas. In practice this means choosing a specific activity or process, seeing what its impact is on the environment and then taking steps to improve it. For example, it might be that all power can be sourced from a carbon neutral supply, either on or off grid, and therefore a “carbon neutral power” claim could be made. It might be that improvements in irrigation and water storage and management means less water is being used than previously and so a relative “X% less water” claim could be adopted.

Alternatively, it might be that a supplier intends to become net zero by 2050 in line with the Paris Agreement. Provided the supplier has an active plan to deliver this, it can make a “net zero pledge” to this effect. In order to substantiate the pledge it will be necessary to show the steps being taken which make the claim realistic and achievable by 2050.

I am certified “organic”, can I make this “green” claim?

If a supplier is certified as “organic” then obviously this claim can be made, which in itself is a type of “green” claim. However, it is important not to conflate different concepts.

For example, if a supplier claims to be “100% environmentally friendly” based on an organic certification, then this claim is likely to be challenged. Why?  A claim such as “100% environmentally friendly” is an absolute claim about every aspect of its operations not just those operations which were necessary to be certified organic. Therefore, unless the supplier could also demonstrate that power use, transport, processing, etc is also “100% environmentally friendly” then the claim cannot be substantiated.

The way to use an organic certification would be to make a relative environmental claim based on it. For example, the phrase “organically certified which means less use of pesticides than in conventional farming methods” could be used. In this way, the claim is made by reference to a specific environment benefit of organic farming.

Conclusion

The industry can avoid greenwashing and make claims about the positive steps it is taking to improve the environment for everyone.  What is more, it can leverage these claims and put more value into the supply chain. However, whatever the claim, it needs to be substantiated.