Brands, Listen Up:
Consumers, Regulators Cracking Down on Greenwashing

The deceptive marketing practice of greenwashing is destroying brand reputations — siphoning market share away from products and services that are genuinely working to address sustainability issues and eroding shareholder trust along the way. But despite various efforts to rid the market of the phenomenon, it is showing no signs of dying off just yet. And in the race to build brand equity, transparency and openness, it’s becoming more important to understand what does — and doesn’t — constitute greenwash.

The most recent spate of greenwash controversies points to some interesting developments and raises pertinent questions for marketers everywhere.

Apparel brands in the hot seat

Nike

The class-action lawsuit brought against Nike proves that making greenwash claims is not simply the reserve of environmental campaign groups and climate activists; increasingly, everyday folks are holding corporate giants to account. In this case, Goliath faced down David in a relatively easy victory: The case of Missouri customer Maria Ellis vs. Nike centered on claims the business was falsely marketing products as “sustainable and environmentally friendly” when, in fact, they were anything but. She claims that only a fraction (less than 10 percent) of the 2,452 products that make up Nike’s sustainability collection are made from recycled materials — and around 90 percent of the apparel is created using plastic-based materials.

Ellis’ suit read: “Synthetic materials like polyester, a form of plastic derived from oil, shed plastic particles called microplastics with wash and wear. They are a prime source of microplastic pollution, which is especially harmful to marine life.”

Her claims might well have been plausible; but she didn’t have any hard evidence to back up her claims and the suit was dismissed last month.

UK fashion brands commit to up their game

Meanwhile, three of the UK’s biggest budget fashion chains — Asos, Boohoo and George — have also been under scrutiny by the competition regulator that has promised to get tougher on corporate greenwash. In a statement, the Competition and Markets Authority (CMA) said the companies had been presenting products as being more eco-friendly than they are, without providing further information — a practice that isn’t fair to customers and distorts competition — and launched an investigation back in 2022. Rather than face legal action, the three brands have promised to up their game. They will have to file regular reports to the regulator indicating how they are improving their communications — that means setting out their sustainability claims more accurately and avoiding the use of ‘natural’ imagery, such as green leaves, that might make a product seem to be more environmentally friendly than it is.

“What we’re asking firms to do is put themselves in the shoes of their shoppers and see whether that claim is understandable in its own right,” said George Lusty, interim executive director for consumer protection and markets at the CMA. “Is it accompanied by information that makes clear what that means?”

The UK has laws in place to impose fines on any brand greenwashing — and it’s not afraid to use them; the CMA has the power to impose financial penalties of up to 10 percent of a company’s annual turnover. But publicly inviting companies to be more responsible in this way is likely to have the same impact. In an open letter to the fashion industry, the CMA has called on other brands to reassess their own environmental claims.

In a similar move, European Union regulators asked Zalando — one of the world’s biggest fashion retailers — to stop using misleading symbols on its website. After a two-year investigation, it was noted that the firm was simply misleading customers into thinking some of its products were better for the environment than they are. As with the three UK brands, no fines were issued — but the public shaming should help the brand improve its storytelling: Less ambiguous and opaque symbols, more straightforward sustainability information for each product.

Brands fall into the trap of greenwash because they attach their storytelling to one element of their performance rather than addressing their biggest impacts, according to eco-innovator Mark Shayler — whose new creative agency, Good Briefs, is an “antidote to greenwashing, greenwishing and greenhushing.”

Brands that stumble “make generalized claims rather than specific ones,” he told Sustainable Brands® (SB). “They court public opinion rather than being led by the science. And they see sustainability as a way of competing with the rest of the sector rather than being the right thing to do.”

Continuing sagas

Other high-profile greenwashing controversies remain unresolved. A second class-action lawsuit against H&M, filed in December 2023, is still ongoing. And who knows how the climate activist group Stand.earth will get on in its pursuit of lululemon in Canada over the brand’s ‘Be Planet’ marketing campaign.

Greenwashing crackdown will only intensify

What is clear is that the pursuit of greenwashing — whether by regulators of members of the public — is only going to intensify. A recent survey of executives across the world found that almost 60 percent believe their own company overstates its efforts on sustainability. And the majority (nearly 75 percent) say that most brands within their sector would likely be found guilty of greenwash should they be investigated.

The Nike v Ellis case only goes to show the height of the legal bar consumers are asked to meet in proving a brand is trying to pull the wool over their eyes. However, the whole saga will have been unwelcome attention for the brand; and Nike’s evidence to support its sustainability collection is as conspicuously absent as that for which Ellis was asked.

It is time for brands everywhere to get their houses in order by documenting their product claims and providing the evidence to support their product stories on sustainability. Shayler says brands must better integrate sustainability storytelling into the heart of their business.

“Sustainability has found itself with more to say to the marketing department, but in reality it needs to speak more to the innovation and business model teams,” he says. “Let’s take it away from marketing — as they never let the truth get in the way of a good story — and build it into the heart of the business. This isn’t about looking good. It’s about doing good.”

Marketing activist Thomas Kolster agrees — warning brands not to try and appear more green or diverse than they actually are simply to attract younger consumers. “They’ll chase you out of town like a snake oil salesman,” he tells SB. “We’re spending too much time on the greenwashing agenda instead of focusing on the real problem: the urgent transition — building more meaningful brands to make people’s lives healthier, greener and happier.”

In an era of heightened awareness, interest and education on ESG topics, consumers, regulators and other stakeholders need to see proof of progress. Unsubstantiated claims just won’t fly — and it’s getting too risky and costly to even attempt it.

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Tom Idle

Content creator extraordinaire.

Tom is founder of storytelling strategy firm Narrative Matters — which helps organizations develop content that truly engages audiences around issues of global social, environmental and economic importance. He also provides strategic editorial insight and support to help organisations – from large corporates, to NGOs – build content strategies that focus on editorial that is accessible, shareable, intelligent and conversation-driving.

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Published May 8, 2024 8am EDT / 5am PDT / 1pm BST / 2pm CEST