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How companies can avoid greenwashing: Do it before talking about it

As corporate sustainability claims proliferate in the Covid era, how can firms avoid accusations of greenwashing? And what should they do if they’re called out for making false green claims?

Korean cosmetics brand inscribed "Hello, I‘m Paper Bottle” on the side of a bottle that had a plastic lining.
Greenwashing – when companies market themselves as being more environmentally friendly than they actually are – can be avoided with transparent ESG data disclosure. Image: Innisfree.

The corporate world has unleashed a torrent of sustainability claims in the wake of the Covid-19 pandemic, as brands have scrambled to be part of the conversation about tackling the problems that the outbreak has laid bare, from inequality and racial injustice to global heating and plastic pollution.

Communicating sustainability has shifted from being a “nice to do” to a “must do” for businesses, said Suzy Goulding, director of marketing agency MullenLowe salt Singapore. “Unfortunately, that doesn’t always translate into doing it properly,” she said on a panel discussion on greenwashing held by the British Chamber of Commerce Singapore on Wednesday.

Greenwashing is defined as the act of giving a false impression or providing misleading information about the environmental credentials of a product or brand.

A recent case of greenwashing was a Korean cosmetics brand with “Hello, I‘m Paper Bottle” written on the side of a bottle which was later revealed to have a plastic lining. The steady stream of companies claiming to be “net-zero” some time in the future has also raised eyebrows this year.

So how do companies communicate their green credentials without appearing to greenwash? The first principle, said Darian McBain, global director of corporate affairs and sustainability of the world’s largest seafood company, Thai Union, is to “do it before you communicate it.”

“If you don’t have the evidence behind it [a claim], you shouldn’t be communicating it.” Credible, recent data is needed to set targets, which can take months or even years to plan properly, she said.

The CEOs who sign off [sustainability] targets are not going to be the CEO when the deadline rolls around.

Tom Peacock-Nazil, founder, Seven Clean Seas

Greenwashing can be used by environmental campaign groups to make a company or industry seem worse than it actually is, said McBain, whose company set commitments to reform its operations in 2017 after a campaign by Greenpeace highlighted destructive fishing practices.

She noted that there has been pressure on companies to make bold sustainability claims since the pandemic outbreak, and that is playing out with a slew of net-zero declarations. One-fifth of the world’s biggest companies have set net-zero targets, but more transparency is needed to avoid greenwash issues, experts say.

How to spot greenwash

Is the claim way outside of the company’s field of expertise?

Is there no credible data to support the claim? 

Has the firm spent lavishly on marketing but less on sustainability? 

Does the sustainability function sit in the marketing or communications department?

Is the only time you hear from a company on a sustainability-themed occasion like Earth Day?

Is the company only promoting its sustainability programme to win an award?

If the answer to any of the above is yes, be wary.

There has also been an “onslaught” of companies talking about plastic waste, noted Tom Peacock-Nazil, founder of ocean clean-up and plastic offsetting firm, Seven Clean Seas. Among the most recent claims was Michelin’s pledge to use 100 per cent renewable materials by 2050, by using recycled PET plastic in its tyres. Peacock-Nazil believes this is a “completely unachievable target” because of a shortage of PET, which is a highly in-demand type of plastic because of its recyclability. 

When companies put a long timeframe on sustainability targets, it’s passing the buck, Peacock-Nazil added. “I’m pretty sure the CEOs that sign off these targets are not going to be CEO when the deadline rolls around.”

Using the right language

Companies should focus on sustainability initiatives that are material to their business to help build credibility and authenticity into their programmes, said Goulding, who quizzes clients extensively about their commitments and progress relative to their competitors to evaluate how to tell their story.

“We need to identify where there might be gaps in what they’re saying compared to what they’re doing,” she said, adding that she has turned clients away that she felt hadn’t got their houses in order. “We’ve said, we’re not going to help you launch campaigns around something you’re asking consumers to do, but haven’t done yourself.”

Though the approach to sustainability communications may vary according to the audience, the essential ingredients are the same — honesty and transparency, said Goulding. “Consumers are now more sustainability savvy,  particularly the young, and are more aware of companies that are not serious about their sustainability efforts and trying to cover up weaknesses and gaps,” she said. “The potential to be caught out and accused of greenwashing is growing.”

Language is key. A study of company websites across a range of sectors, published in January, found that 40 per cent used vague or unsubstantiated claims such as “eco” or “green” to denote sustainable products or services that could potentially be misleading.

Goulding said that companies have to find the right balance between telling an interesting story that engages audiences but which doesn’t stray from the truth. “If you can’t inspire people, then nothing will change. But you have to start with the facts, and craft a story from that point of truth.” 

Companies should try to avoid using sweeping statements and clichés that have crept into the way corporates talk about sustainability. One example is “sustainability is in our DNA”, which produces 22,300 results in a Google search. “Purpose” is another. Goulding also advised against using made-up words, such as “skinclusivity”, a word the beauty industry has started using that means including people of all skin types.

Setting the record straight

Companies accused of greenwashing should be willing to share evidence, and clearly explain why they’ve communicated their sustainability credentials, said McBain. Accusations give companies the chance to tell a more nuanced story in their response. “Rather than see it as a threat, look at it as an opportunity to delve into a subject more deeply and share more detail about what else you intend to do,” she added.

Companies should be prepared to admit to their mistakes, Goulding said. Brands gain credibility and trust from consumers by being honest. “Companies make mistakes, and people accept that. What they don’t accept is when they try to cover up where they went wrong,” she said.

Green hush

Fear of accusations of greenwashing can mean that companies go quiet. This is known as “green hush”. A lack of experience in setting a sustainability strategy and nervousness over using the correct terminology also puts companies off talking about their sustainability credentials, Goulding said. 

“A company is never going to be perfect, because sustainability factors are always changing. But there’s no reason why you can’t communicate any point of your sustainability journey — as long as you’re honest and transparent about where you are at that point in time,” she said.

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