Restoring trust in environmental claims

How can we make businesses and leaders feel confident in making legitimate environmental claims, while at the same time creating an ecosystem that consumers can trust?

After decades of acrimonious debate, there are two things nearly all of us can agree on: human beings have caused climate change, and it is our collective responsibility to do whatever we can to reduce our emissions and transition to a low carbon sustainable future.

The ability to influence societal-wide behavioural change is critical to realising this future. Effective and authentic communication is the key to making that behavioural change happen. As David Attenborough recently said: “Saving our planet is now a communications challenge. We know what to do, we just need the will.”

But to communicate successfully and effect change, you need the trust of the audience you are seeking to influence, and the rise of greenwashing is threatening to undermine genuine progress that is being made.

Greenwashing is the deceptive practice of making misleading or unsubstantiated claims about the environmental benefits of a product, service or company. It is getting plenty of attention lately as consumers rightly demand that environmental claims can be backed up by hard facts.

Greenwashing, in all its forms, is abhorrent and should be widely condemned by government, regulators and business alike.

A perfect storm is brewing around environmental claims with the confluence of four events.

The first is a clear shift in community expectations around environmental claims. A recent YouGov poll found that 63 per cent of Australians are sceptical about most brands’ attempts to convince them they are green. A regular stream of egregious examples of greenwashing in the media has poured fuel on the fire, further undermining consumer trust.

The second is increasing regulator activity, largely in response to the rise in community concern. In Australia, several regulators are undertaking surveillance and enforcement activities. You can only expect this activity will intensify over the short to medium term.

The third is movement from governments, regulators and industry bodies around the world to strengthen the standards and rules that cover environmental claims. The European Commission is leading the charge in this area with its Green Claims Directive.

Finally, there is a lack of concrete rules and standards in Australia that provide businesses with the confidence they need to make a claim that will withstand regulator and consumer scrutiny.

The unfortunate outcome of this perfect storm is consumers are increasingly distrustful of environmental claims and businesses are increasingly timid, if not a little terrified, to put their heads above the parapet and talk about sustainability for fear of consumer or regulatory action.

To provide an example. I was recently told about an iconic Australian financial services company removing all references to environmental or green claims from all websites and public communication for fear of regulatory action or reputational damage.

This relatively new phenomenon – where companies choose to not communicate their sustainability efforts in fear of retribution – is called greenhushing, and it is not good for the sustainability cause.

How are we supposed to inspire behavioural change and take consumers and businesses on the journey if organisations are too scared to talk about their road map and what they are doing to transition to a low carbon future?

We must create an environment that encourages the genuine leaders, innovators and role models to communicate the positive impact they are having on the environment and share their vision and blueprints for a sustainable future. We know that when people perceive what others are doing, or should be doing, it can guide and direct behaviours. We like to conform to social norms. Sharing our learnings and experiences can only act as an accelerator. Sometimes we will get it right. Sometimes we may not. But, we have to try.

So, how can we make businesses and leaders feel confident in making legitimate environmental claims, while at the same time creating an ecosystem that consumers can trust?

Before organisations even contemplate communicating their green credentials, they must have clear environmental, social and governance (ESG) strategies that sit at the heart of their business strategy, not at the periphery. Setting strategies and ambitious targets is not enough. You must have a credible transition plan to a low carbon future and be taking genuine action against that plan. As Judy Slatyer from the Climate Leaders Coalition so succinctly puts it: “It is a case of ‘show me, don’t tell me’.”

We also need clear standards, rules and guidance in Australia that give businesses guiderails to make environmental claims with confidence. To achieve this, the AANA is reviewing the Environmental Claims Code to bring it in line with community standards and international best practice. We are working with the ACCC to ensure the code is consistent with consumer law and ACCC guidance.

Finally, government, regulators and industry must work together to create a system that restores community trust and confidence in environmental claims.

We need to be able to talk about sustainability to realise the future the planet needs. It is up to government and industry to work together to create an environment that enables, not overly restricts, that important conversation. If we get the balance right, it will be a better outcome for the community, for business, and most importantly, for the planet.

Josh Faulks is the CEO of Australian Association of National Advertisers (AANA). The AANA is the leading industry and self-regulatory body for advertisers and marketers in Australia.