Don't bluff your sustainability

On June 2021, Coca-Cola was sued by Earth Island Institute (an Environmental non-profit organization) for deceptive marketing regarding its sustainability efforts. The complaint alleges that they have been misleading consumers.

Coca-Cola has announced a number of environmental initiatives to advertise its commitment to waste reduction and recycling, making several claims from collecting and recycling the equivalent of all its sales by 2030 or designing for 100% recyclability.

Meanwhile, Coca-Cola is the world’s leading plastic waste producer, generating 2.9 million tons or about one-fifth of the world's plastic waste per year. This plastic production also relies on fossil fuels, resulting in significant CO2 emissions. On top of this, they have actually been actively fighting against “bottle bills” that tend to have better recycling rates.

Earth Island Institute did not seek damages, only to stop Coca-Cola from continuing to make these statements.

They won.

The Sin of Greenwashing

One of the biggest mistakes companies make is Greenwashing: pretending to be sustainable. Otherwise known as the process of conveying a false impression and misleading information about how a company's products are more sustainable.

What happens if your customers think that they are being misled by your marketing? It creates an adverse reaction, curbs the trust in your brand and you’ll be faced with the backlash of ‘greenwashing’. That could be a lawsuit.

Seven environmental groups filed the lawsuit against Shell for setting a zero-emission target that is not ambitious enough. The lawsuit also named 17,000 Dutch citizens as co-plaintiffs. The activists won as the Dutch court In May 2021 determined that Shell's plans are inadequate to comply with the goals set by the UN. This ruling applies to emissions caused by Shell's action as well as by its customers. Shell, of course, is appealing.

February 2021. Two non-profit environmental organizations filed the first major lawsuit against ten USA companies, including Pepsico, Inc. and Nestlé USA, Inc. for polluting waterways, coasts, and oceans with millions of tons of plastic packaging.

In 2017, Walmart had to pay $1 million to settle a greenwashing lawsuit, after advertising false claims about the compostability of plastic products.

In 2019, McDonald’s ran into a greenwashing scandal when they replaced their plastic straws with a paper alternative. As it turns out, the new paper straws were not actually recyclable.

Making claims, announcing initiatives, publishing policies doesn’t cut it anymore. You either walk the talk or you pay the consequences.

More Than Just “Green”

The Israeli NSO Group has sustainability plastered all over its website "In line with the United Nations Guiding Principles on Business and Human Rights, we are committed to promoting transparency". They have even published an annual transparency and responsibility report.

NSO produces spyware that can hack cellphones without the user's consent. While NSO claim they sell the technology solely to governments' to battle terrorism, totalitarian regimes are known to use it for darker purposes.

All this has resulted in the Biden administration placing the NSO group on the entity blacklist. Being on this list means limited access to US components and technology that require governmental authorization. It also means a blow to your reputation, as many companies will avoid doing business with listed entities to avoid their own risk and costs of complex legal analysis.

NSO is now less attractive to employees and to investors. Having a true corporate responsibility policy and a reliable ethical code might have made a difference here.

Don’t greenwash

Many companies use terms such as “sustainable” or “inclusive”. The real question is what is actually being implemented. Do they practice what they preach or are they just greenwashing?

As greenwashing can have serious consequences, here are three ways to avoid this error.

Be honest and transparent

Compensating with one sustainable act for many other unsustainable practices is not a solution. People value honesty, and honesty follows trust, further gaining loyal customers. Make facts clear and accessible rather than vague and out of context. Acknowledge problematic areas and their solutions. Customer empathy will overcome that and they will admire your courage and the new direction.

Lego committed in 2015 to spending $150 million on sustainability efforts in the next 15 years. Their goal is to make all LEGO bricks from sustainable materials by 2030, although in 2015 they used only 2%. What’s great about LEGO’s approach is that they are not only transparent about their plans but they are also honest about their current shortcomings.

Being transparent in where your brand is on track to achieve its goals is very important for building brand loyalty with your customers.

Collect credentials for authenticity

While you might detail your efforts on your brand’s website, there are strict regulations about what you can label your packages with. Using terms like ‘recyclable’ or ‘eco-friendly’, if not true, could even be illegal. Deceiving your stakeholders with your illustrations of green meadows and clear skies won’t make you an environmentalist superhero overnight. You could lose the support of the environmentally-conscious audience altogether.

Consumers will also trust your sustainability claims more if your brand has the right green accreditation. These credentials will enable you to back your sustainability claims with evidence and make it easier for sustainability-driven consumers to choose your brand over the competition. Win-win.

Develop a sustainability strategy

Developing a strategy is key in taking action in making your business more sustainable. Same is a company would with its business plan

• Actively incorporate corporate responsibility and impact goals into the company’s strategic goals.

• Involve stakeholders - the more people who are a part of your SDG strategy, the more impactful it will be. Ask their opinion and prioritize accordingly.

• Receive feedback - enables gaining an outsider’s perspective on how your company is perceived.

• Show commitment and engagement with environmental issues on multiple levels of your company.

Final Thoughts

Why do companies still practice greenwashing ? Mainly because it is perceived as easier than actually reforming. Consumer’s desire to address the climate crisis at a personal level makes them fall for it. “Net Zero” and “SDGs” can be easily used for greenwashing.

Sustainability is more than a trend, and change is coming. We can see that more and more customers are prioritizing brands that they view as environmentally- friendly while boycotting companies that fail to meet their expectations. Don’t be one of them. Get ahead of the competition by staying transparent about your activities and including sustainability in your brand’s core values. Your audience’s long-term loyalty will be the reward.

#TSBC #ImpactTech #sustainability #greenwash