In today's business landscape, sustainability and environmental consciousness have become paramount. However, it is crucial for businesses to avoid making misleading or exaggerated claims about their green initiatives, a practice known as greenwashing.

How can businesses navigate the complex world of sustainability claims and maintain their credibility?

To shed light on this important topic, the firm's Intellectual Property team recently hosted a multijurisdictional Lexology masterclass webinar on avoiding greenwashing and navigating sustainability claims. This article aims to highlight some of the key points discussed during the webinar, providing valuable insights for businesses seeking to maintain credibility and transparency in their sustainability efforts.

Navigating increased scrutiny on sustainability claims

Marketing claims relating to sustainability are increasingly observed closely worldwide. As an example, the UK's Advertising Standards Authority has become increasingly proactive, adopting AI tools to identify questionable environmental claims in digital media.

Both authorities and consumers are demanding transparency and substantiation. Businesses must therefore ensure that their claims reflect reality and are supported by comprehensive evidence.

Companies may face fines and other penalties if they breach the rules, not to mention the collateral damage to their brand.

Reputational damage of greenwashing knows no borders

Comparing the consequences across key markets, such as the UK, France, Germany, Middle East and Asia, businesses found guilty of greenwashing can face severe ramifications. Apart from heavy fines and reputational damage, in some countries, sanctions may also include imprisonment.

Further, be aware that greenwashing in one market can harm a company's reputation worldwide due to the global reach of social media and digital advertising.

Adopt a holistic approach to sustainability

The best defense against greenwashing allegations is transparency and evidence-based claims, and a holistic approach to sustainability. When formulating green claims, it is crucial to start with the evidence and ensure that it supports the claim being made.

Businesses should also consider the overall impression of their advertising and the proportionality of their green claims into the context of their overall environmental performance.

If you embrace candid, specific and transparent reporting of your green endeavors, it will help retain more sceptical customers, while also avoiding public misconception.

Some practical tips to avoid greenwashing

  • Set achievable and realistic sustainability goals.
  • Review the regulatory framework and stay abreast of changes.
  • Embrace technology to evaluate environmental impacts, as it becomes more readily available.
  • Avoid vague terms like "green" or "eco-friendly" - without qualification, these may be difficult or impossible to substantiate with the required level of evidence.
  • Present and report green endeavors in a specific and transparent manner.
  • Do not cherry-pick positive environmental aspects and be honest about the environmental impact of your business.
  • Seek legal counsel and prioritise honest communication around sustainability efforts.

Concluding remarks

Navigating the complex world of greenwashing requires the support of a strong strategy and attention to detail to ensure companies do not fall victim to a reputational crisis. Adopting a well thought out approach and seeking legal counsel where possible will prove valuable and serve as a key to an organisation's longevity.

To dive deeper into these strategies, connect with one of the authors or a member of our global team.

This article was co-authored by Vivian Wei Cheng a patent attorney working in the offices of JurisAsia LLC, with whom Gowling WLG has an exclusive association.