Greenwashing has been under the spotlight recently, with the Financial Conduct Authority (FCA) recently announcing its intent to introduce tighter regulatory guidance around “green-marketing” and sustainability product labels.

Greenwashing is an attempt to make people believe your business is doing more to protect the environment that it actually is. It’s an act that’s more common than you might imagine, with a recent survey highlighting that 58% of respondents stated their organisation was guilty of greenwashing.

Organisations often overlook or underestimate the negative consequences around greenwashing, but the practice can carry significant risks.

The Competition and Markets Authority (CMA) in the UK can issue fines for up to 10% of global turnover under the Green Claims Code. Such a fine carries not only financial repercussions, but also reputational damage.

As an example, Volkswagen admitted to cheating emissions tests to market cars as eco-friendly. After the greenwashing scandal came to light, the organisation had to pay £4.8bn to fix the issue, leading to its first quarterly loss in 15 years.

With consumers increasingly opting for more sustainable goods, greenwashing carries even greater risk as customers become more “clued-in” to what true sustainability looks like.

For organisations that truly embrace sustainability, and have data to back-up their claims, green marketing is a smart option. It’s an option that can result in lucrative returns, allowing businesses to trade on their green credentials and grow their bottom line.

Curious how to do flip this risk into an opportunity for growth? Read on to find out.

Link between brand, sustainability, and your bottom line

Step one involves creating a robust sustainability strategy that is time-specific and measurable.

Greenwashing is intrinsically linked to your brand perception, your sustainability performance and ultimately your bottom line.

If you’re working in a sector that is associated with negative environmental impacts, consumers or clients will be more sceptical towards green claims you make.

Disassociating your brand from the sector norm is the first step to quashing the risk of greenwashing.

It’s not enough to simply put a few “we love the planet” posts on social media – a sustainability strategy will give your business real timelines, actions and deliverables that will create true impacts.

Failing to root your green claims in a robust strategy that not only outlines what your goals are, but how and when you plan to achieve them, will lead to increased scepticism and could end in audits or greenwashing claims being raised against your business.

If that happens, having no methodology or data to back up your claims may lead to financial repercussions and damage the valuation of brand assets and your business’ bottom line.

Start capturing data, and mean it too

With a strategy in place, capturing performance data that shows your progress against the green claims you are promoting is paramount.

Importantly, your approach to sustainability can’t just be about accessing data to support green claims – you must really mean and deliver upon what you say.

Rooting your sustainability approach in overall business strategy and making it a part of your organisational identity leads to authentic messaging.

If you’re publicly making green claims, but your brand is renowned for contributing to landfill, excess packaging, or poor working conditions within its supply chain– no one is going to believe you.

Sustainability must start with a real desire to change, and be backed up with clear goals and timebound actions to achieve that change.

Disclose your performance

Avoiding greenwashing requires transparency.

If you’re actively marketing as a green or eco-friendly business, you should consider disclosing data and information quarterly or annually to support those claims.

By providing stakeholders with regular sustainability or ESG reports, you can quash accusations of greenwashing by being open and transparent on your commitments and progress towards goals.

Disclosing performance – whether good or bad – will also mitigate the risk of a greenwashing accusation arising, showing you have nothing to hide. Not enough companies are willing to hold up their hands and admit if they don’t achieve a target, believing they will be punished for their failure. The truth is, the majority of stakeholders are more trusting of companies that disclose their progress warts and all, provided they can say what they’re doing to mitigate and get back on track.

Transparency leads to trust – a vital component in any relationship with stakeholders – and a win-win-win for your business, your customers, and the planet.

Align green marketing with your target market

The key to effective green marketing is to align your sustainability efforts with your customers’ values.

If linking commerciality and sustainability is important to your business, when formulating a strategy, involve the marketing function who can determine what activities align best with those values.

Doing so will mean that your brand, sustainability, and marketing approaches are intrinsically linked and less likely to fall foul of greenwashing claims.

And consider also leading your customers towards sustainability by taking the opportunity to educate and inform through your marketing. You can positively influence those customers who need more education in this space as well as aligning with those already demanding a more sustainable approach.

How do I capture sustainability performance data?

We were hoping you’d ask that.

At SustainIQ, we provide an all-in-one solution to sustainability & ESG reporting.

Credible data capture and management is key to mitigating and eliminating the risk of greenwashing. Moreover, the opportunities that sustainability performance data can provide, both to market your business and contribute to higher scores in tenders is significant.

If you’re getting started with measuring performance and want a quick solution that can help you capture data company-wide, contact us here or drop an e-mail to [email protected].