Regulators are set to take a hard-line approach to greenwashing: Three key steps to avoid risking severe reputation damage
With green claims fast becoming an influencer of consumer loyalty and spend, food producers found to have misled consumers risk severe reputational damage.
Sustainability is becoming a lucrative differentiator for CPG (consumer packaged goods) producers, with 37% of European adults noting they have purchased products specifically because they were labelled as environmentally friendly.
Leatherhead’s survey was conducted online between 4-16 November 2022 among 10,234 adults in Denmark, France, Germany, Greece, Italy, Spain, Turkey and the UK.
In a survey to gauge consumer attitudes to green claims, Leatherhead found 34% of adults have selected a different brand to their usual choice due to green claims, while 30% have even chosen a product that costs more than alternatives perceived as less environmentally friendly.
Regulatory minefield
In March, the EU Commission adopted a proposal for a Directive on Green Claims, aimed to address greenwashing concerns and eliminate misleading environmental messaging.
Green claims like ‘packaging made of 30% recycled plastic’, ‘environmental footprint reduced by 20%’ and ‘CO2 emissions has been halved’ are awash within the CPG industry, however, the EU has found that 40% of claims have no supporting evidence; while 53% offer vague, misleading or unfounded information.
The Directive - which aims to be in place by late 2024 and applied from late 2026 - will:
- make green claims reliable, comparable and verifiable across all EU markets
- protect consumers from greenwashing
- contribute to creating a circular and green EU economy by enabling consumers to make informed purchasing decisions
- help establish a level playing field when it comes to environmental performance of products.
Despite the deceptively lengthy timeline, Leatherhead is warning companies to avoid being time-complacent but take time now to assess the potential impact of the Directive and ensure any green claims are properly substantiated.
And despite Brexit, UK producers are coming under scrutiny, too.
The UK’s Competition and Markets Authority (CMA) is already enforcing its own Green Claims Code and announced in January that it will scrutinise all household products - including food and drink - for potential greenwashing.
Mariko Kubo, head of Scientific and Regulatory Affairs at Leatherhead Food Research, said green claims are becoming a regulatory minefield. She advises producers to take a cautious approach to avoid unintentionally making misleading claims that could lead to accusations of greenwashing.
“The rapid rise of green claims and the corresponding influence on consumers has outpaced the development of clear rules for their use,” said Kubo.
“While the proposed Green Claims Directive seeks to bring some harmony, there could still be divergence across EU member states since directives are less rigid than regulations. “Ultimately, companies need to be proactive, scrutinising and substantiating green claims in case they are singled out by authorities in the markets where they operate.”
A good place to start
According to regulatory specialists at Leatherhead, there are three key steps that companies need to take for substantiation.
Firstly, identify any product statements that could be construed as ‘green claims’ to ensure they are specific and represent a genuine benefit.
Secondly, the claims should be validated in terms of accuracy, truthfulness and clarity.
Finally, it’s important to check that all promotional materials – from product labels and packaging to advertising – are truthful and not misleading.
Kubo said companies should consult the proposed Green Claims Directive alongside ISO 14024 and ISO 14025 on environmental labels and declarations.
Companies marketing food and beverage products in the UK also need to be aware of the best practices outlined in the CMA’s Green Claims Code and be mindful of potential scrutiny from the authority.
“Sustainability is such an important matter that regulators are set to take a hard-line approach to greenwashing, whether it’s intentional or not,” said Kubo.
“Food and beverage companies need to make the substantiation of claims a priority. Ensuring they are holistic, specific and verifiable is a good place to start.”
