Organizational Governance

Avoiding Greenwashing Accusations Requires Cross-Functional Collaboration

Brand Provided | By Ryan Fisher | Published 4 months ago | About a 4 minute read

Image: Great Salt Lake | Matthew Montrone

As pressure mounts from investors, regulators and consumers, sustainability has become a priority for businesses — especially within the CPG and wellness industries. As more brands determine their sustainability goals, those efforts should not be siloed to one department or simply summed up in one generalized effort. Sustainability goals that allow for cross-functional collaboration allow organizations to work together toward a common goal and make true progress.

The need for improvements that can be measured and continuously built upon has never been more urgent. In the EU, the Green Claims Directive is asking brands to substantiate environmental claims in order to provide consumers with more transparent and reliable information. Here in the US, the Federal Trade Commission (FTC) is considering new updates to its Green Guides for the same purpose. What’s more, greenwashing lawsuits are increasing as more companies disclose — and fall short of — their sustainability-related pledges or estimated timelines to reach net zero and other stated goals.

In order to address these business challenges head on, brands need their teams to work together — from manufacturing to the product-development teams to the marketing department — towards achieving collective sustainability goals and effectively communicating them.

Here are two tips from our sustainability journey in the wellness space.

Build a roadmap to prioritize improvements to on-site manufacturing

Product manufacturing is often one of the most significant areas of many brands’ environmental footprint; yet it can also be the most difficult in which to enact changes due to costly equipment improvements, job training and required on-site operational changes. Prioritizing sustainable shifts in manufacturing does not require an immediate overhaul — only a detailed look at business as usual in order to identify where to go next. Ahead of equipment changes, brands can look to environmental certifications that help begin the process of measuring current impact, in order to understand where and how to improve.

The International Standards Organization (ISO) — an independent organization that develops standards to ensure the quality, safety and efficiency of products and services — offers a reliable starting point with environmental certification programs. Specifically, its ISO 14001 provides the needed guidance on setting environmental objectives and targets — in addition to audits, communications, labeling and lifecycle analysis — all as it relates to environmental challenges. These certifications require a manufacturing team to work together to implement wide-scale changes that are measurable to ultimately support on-pack marketing claims and public sustainability commitments. Annually, sustainability teams can meet with product-manufacturing teams to continually measure and identify areas for savings and impact across the business.

Identify opportunities to protect natural resources that support the business

Every consumer product utilizes natural resources in some capacity, especially in the wellness industry. Brands often take ingredients directly from nature to create products that deliver the nutrients that are abundant in the environment.

At Trace, our supplement company extracts minerals from Utah’s Great Salt Lake, and we take preservation efforts seriously as more companies tap this natural resource for its abundant and powerful minerals. An ecological wonder, the Great Salt Lake deeply impacts the local environment — from bird migrations to plant life — not to mention the local economy, where it provides almost 8,000 jobs in the state. As a private business, we have a responsibility to ensure the largest saltwater lake in the Western Hemisphere is cared for. Our team is vocal in support of local legislation such as HB 453 — a bill that provides the needed regulatory oversight as to who can take minerals and water from the lake, while protecting water levels from becoming too low.

Brands can call upon their product procurement teams to take a closer look at their sourcing practices and identify how they too can stand for the protection of local environments that serve the business. When an organization financially benefits from natural resources, dedicating efforts to ensure its preservation serves the bottom line as well as its sustainability claims.

Misleading consumers on sustainability initiatives will not grow a business, and the legal and reputational ramifications only reinforce that the exaggeration of environmental claims will not deliver on ROI. Heads of sustainability can work with teams across various departments to improve an organization’s efforts on sustainability more holistically. With the strategy in hand, businesses can bring teams together to initiate meaningful change that can be accurately measured and thus promoted to their customers and shareholders.