Avoiding Greenwashing
Greenwashing is a term most of us have heard of by now.
But what does it actually mean and how can you avoid it?
According to the European Commission, greenwashing is “companies giving a false impression of their environmental impact or benefits”. This means that companies put themselves or their products in a much better light than they should be in the context of sustainability, using false claims or unsubstantiated data.
As the topic of sustainability appears to be increasingly valuable to consumers, this can have huge effects on sales. As confirmed by a study by the Directorate-General for Justice and Consumers, half of the participating consumers actively look for sustainability information on the packaging before making a purchase choice, while nearly 60% prefer to purchase a product with an environmental label.
Consequently, companies that are using greenwashing can obtain an unfair competitive advantage for themselves.
What has been done to prevent greenwashing?
Consumers are generally unknowledgeable when it comes to green claims. 61% of them state that they struggle to assess which products are genuine in their environmental statement and which ones are not, while 44% do not trust this kind of information at all.
The EU as well as single EU members, including Denmark, have been trying to put a cap on false claims by introducing regulations on that matter. The Union has used tools such as the 2019 introduced European Green Deal and the Circular Economy Action Plan from 2020 to require companies to substantiate environmental claims based on Product and Organisation Environmental Footprint methods.
Denmark, after releasing a guide for ethical and environmental standards in 2014, had taken it a step further and imposed sanctions on companies, that had violated standards.
So how can companies avoid greenwashing accusations?
The EU advises companies to use sustainability certificates to validate their environmental impact. Though, since there are over 200 certificates in the EU and over 450 active ones worldwide, targeting different aspects of sustainability, claims and certificates should always be backed by data.
The Danish Consumer Ombudsman suggested in its 2014 guide that a product life-cycle assessment would be the most effective way to ensure a company’s claims. Conducting an assessment of this kind would imply a review of a product’s environmental impacts across its value chain, in other words, tracking any impact that is caused by a product during material sourcing, production, usage and disposal.
One way to track these assessments would be a so-called “EU Digital Product Passport” which is currently drafted by the European Commission with expected approval in 2024. According to the Commission, this would be a comprehensive way to disclose product information across the entire product life-cycle, creating transparency and pushing product circularity.