Ecoveritas is urging businesses to review their governance and risk management in relation to ‘greenwashing’ after warning that overclaiming and exaggeration could cause irreparable reputational damage.
Environmental and compliance data specialist Ecoveritas believes the Competition and Markets Authority’s (CMA) plans to scrutinise eco claims in consumer goods, including food and drink.
The CMA recently announced a survey of the accuracy of environmental claims about household essentials to ensure shoppers are properly informed about their purchases.
This review could lead to government restrictions on spurious ‘Green Claims’ on a wide range of fast-moving consumer goods products such as food and drink.
“The new review signals a significant broadening of the CMA’s clampdown on greenwashing, which has otherwise been limited to more specialised sectors to date,” said Kathy Illingworth, head of sustainability consulting at Ecoveritas. “With ‘green business’ topping many a boardroom agenda, it highlights the need for all businesses engaging in product promotions to undertake robust due diligence over the environmental credentials of their products. There is no longer any hiding place for environmental corner-cutting, overclaiming or exaggerating claims.”
The CMA will investigate online and in-store claims, including on-pack, for compliance with UK consumer protection law (in particular, the Consumer Protection from Unfair Trading Regulations 2008). It will review whether such claims are being made in line with its Green Claims Code.
“Given the burgeoning interest in sustainability, it is easy to see why companies might wish to engage in greenwashing,” added Illingworth. “But the financial and reputational risks of doing so can be extreme.
“Our experience is that many businesses do not have sufficiently robust governance and processes for collection, verification and review to ensure that information made publicly available is accurate. This then blurs the lines between genuine attempts to articulate the benefits of a company or its product or damaging accusations of being misleading.
“Honesty, transparency and clarity keep businesses on track and away from the murky waters of greenwashing. It serves as another timely reminder for producers and marketers to check that their claims are truthful and accurate and don’t risk misleading consumers about the environmental impact of the advertised product.”