The rise of environmental claims

As more and more consumers become aware of climate risks and try to adopt more sustainable practices, businesses are sensing an opportunity to tap into the green market. With this comes the danger of unsubstantiated claims about products and services, leading to consumers believing that a company’s products and services are ‘environmentally friendly’. In the UK alone, 72% of consumers consider sustainability in purchasing decisions.¹ However, as environmental claims by businesses become more prevalent, so do instances of greenwashing. The good news is that governments are becoming increasingly aware of this trend and beginning to crack down. But, we may be seeing a shift from one extreme to the other; some businesses are beginning to practice a new phenomenon known as green-hushing.  

Greenwashing vs green-hushing

Greenwashing occurs when businesses provide consumers or investors with misleading information about the environmental impact of their operations.² By exploiting consumers’ genuine ethical concerns, greenwashing impact a consumer’s ability to make a sound, environmentally friendly decision – generating confusion, scepticism and increased perceived risks around ‘green products’. Due to public and regulatory backlash against greenwashing, instances of green-hushing have become more frequent. Green-hushing occurs when businesses do not publish details of their climate targets to avoid scrutiny and allegations of greenwashing.³ 

In order to avoid greenwashing or green-hushing, businesses must ensure that the claims they make are accurate, unbiased, and supported by robust evidence. Legislation in both the United Kingdom and the European Union can guide businesses aiming to take the necessary precautions.  

Greenwashing and the regulatory landscape

UK Green Claims Code

In September 2021, the UK government launched the Green Claims Code (GCC). The principles of the GCC are designed to highlight the standards businesses must adhere to when making claims about their environmental impacts.  

The code enforces new guidance on misleading and socially irresponsible environmental claims. By delivering clear and explicit instructions, the code covers the entire lifecycle of a product, service, process, or brand. Beyond the legal penalties for failing to comply, neglecting these six principles risks separating a company from its customer base. As public opinion and expectations rapidly evolve, a company’s reputation is increasingly exposed to this danger. Over 12 months, for example, the Advertising Standards Authority (ASA) found 16 advertising campaigns had either exaggerated their company’s green credentials or made unsubstantiated environmental claims.⁴ These breaches were widely publicised, severely impacting the businesses’ reputations.  

As trust in green claims is fragile, the Green Claims Code is a welcomed intervention that will play a vital role in levelling the playing field. Businesses that have been working to mitigate their social and environmental impact – with data to support – will see the code as a golden opportunity to gain commercial advantage and improved performance.  

EU Green Claims Directive

The EU is following a similar approach to the UK. In March 2023, the Commission adopted a proposal for a Directive on Green Claims. The proposal on green claims aims to:⁵ 

• Make green claims reliable  
• 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 regarding the environmental performance of products.   

To ensure that aims are met, the Directive will set out criteria on how companies should prove their environmental claims, requirements for claims to be verified and enhanced governance on labelling schemes. Although the Directive still needs to be approved by the European Parliament, its significance is paramount and emphasises the need for increased transparency. It is recommended that businesses keep a watching brief on the proposal as it will likely significantly impact current practices.  

How does Simply Sustainable support businesses in getting their environmental claims right?

Simply Sustainable recognises the increasing complexity of abiding by environmental rules and regulations. These are particularly difficult to navigate when faced with large and often elusive supply chains, alongside time and resource constraints.  

At Simply Sustainable, we encourage transparency in all business publications and disclosures and are adept at guiding businesses to comply with existing obligations on environmental claims. In particular, we ensure that reporting and communications are aligned with the latest environmental regulations and best practice frameworks.  

If you are interested in getting your environmental claims right, but not sure where to start, please contact us or request a call back.

Author: Lauren Hyatt, Senior Consultant