North East firms warned against 'greenwashing'

Bosses in the North East have been warned against falling foul of new ‘greenwashing’ rules that came into force at the start of January.

The “Green Claims Code” introduced by the Competition and Markets Authority (CMA) is designed to stop firms making claims that their products and services are greener than they actually are: a practice known as greenwashing.

Kirsty Ramsey, chair of The Chartered Institute of Marketing’s North East committee said: “The new rules apply to any online and offline advertising from the start of the year. They say all green claims must be genuine and not mislead the customer, in accordance with consumer protection law.

“Breaking them could cost companies dear as they can be fined up to 10% of their global turnover.”

She added: “Chartered Institute of Marketing (CIM) research reveals that 55% of companies see sustainability as a business priority and are keen to make claims about their achievements in their marketing. However, a recent study, coordinated by the CMA, found that up to 40% of sustainability claims made online could be false.”

Firms should back up the environmental or sustainable terms they use in their literature. If the product or service a firm provides is less environmentally friendly than its name suggests, it could result in a hefty fine.

According to research from CIM, 63 per cent of consumers think brands should increase communications around sustainability. Proving environmental claims effectively will be key to avoiding financial repercussions from the CMA, as well as a backlash from customers who feel deceived.

Companies are advised to avoid hypocrisy. Pointing the finger is rarely a good look for companies, especially if they are guilty of the same criticism levelled at others. If a company’s products or services harm the environment, then making unfair comparisons to deflect attention will anger customers, other businesses and the CMA.

Just because a product can technically be recycled, doesn’t mean the infrastructure is in place to do so. Whilst products labelled as ‘biodegradable’ or ‘compostable’ may be technically recyclable, consumers might not know that these products must be processed at specialised centres and can’t be left in a household recycling bin.

Finally, research from CIM found 63 per cent of consumers believe brands only get involved with sustainability for commercial reasons. Demonstrating your organisation’s environmental activity is honest and driven by ethics, rather than profit, can be more effective marketing than “outlandish sustainability claims.”