The Green Claims Code (GCC) is a comprehensive guide, developed by the Competition and Markets Authority (CMA) in the UK. It offers businesses a framework to ensure that their environmental claims are accurate, transparent and verifiable. Consumers are becoming increasingly aware of environmental issues, hence the need for clear and honest green marketing has never been more pressing. The code has a great impact on various aspects of business operations, from product development to marketing strategies. It provides a checklist for companies to evaluate their green claims, helping them avoid misleading statements and potential legal repercussions. By adhering to the principles outlined in the code, businesses can build trust with their customers and ensure compliance on all business promotional campaigns.
Greenwashing involves conveying false or misleading information about a company's environmental impact. It occurs when organisations present untrue actions or statements that appear more environmentally friendly than they actually are.
Impact on Consumer Trust
Greenwashing negatively affects consumer trust and has significant consequences. A survey revealed that 62% of UK consumers would reduce or stop purchases from companies engaged in greenwashing.
Legal and Reputational Risks for Businesses
Greenwashing poses serious legal and reputational risks. Regulators worldwide are taking action against misleading green statements, with potential financial repercussions. For example, the CMA has investigated environmental claims in the fashion retail sector. Businesses face not only regulatory scrutiny but also potential litigation and reputational damage.
What are green claims?
Green claims are environmental claims suggesting that a product, service, process, brand or business has a positive or reduced negative impact on the environment. These claims can be explicit or implicit, appearing in advertisements, marketing materials, branding. Such claim may relate to specific environmental impacts or be more general in nature. They typically include terms like 'carbon-neutral', 'organic', 'eco-friendly' or 'sustainable'. The CMA's research found that up to 40% of green claims could be construed as misleading, highlighting the need for clearer guidelines. The Green Claims Code aims to combat greenwashing and promote genuine sustainability efforts. It covers various aspects of claims, including terminology, qualifications, evidence and overall presentation.
The six principles of the Green Claims Code
The GCC outlines six key principles for businesses to follow:
To implement the GCC effectively, businesses must take a comprehensive approach. This involves reviewing existing claims, gathering robust evidence and training staff on proper green marketing practices.
Reviewing Existing Environmental Claims
Companies should assess their current environmental claims for accuracy and clarity. Claims must be truthful, unambiguous and consider the full lifecycle of products or services. Vague or general statements are more likely to mislead consumers and should be avoided. Businesses must ensure their claims don't focus on minor aspects while ignoring significant negative impacts.
Gathering Evidence to Support Claims
Substantiating green claims is crucial. Companies need to have credible, up-to-date scientific data to back up their statements. For example, our client C-Biotech commissioned a Lifecycle Carbon Assessment (LCA) from Tunley Environmental to certifiably demonstrate that their innovative C-Hemp Sandwich Insulation Panel was carbon-negative. The assessment confirmed that calculated cradle-to-gate emissions were -7.6 kgCO2e/m2 when biogenic uptake was considered, compared to a figure between 10 and 60 kgCO2e/m2 from average products on the market of the same functionalities. In this assessment, all lifecycle modules of relevant interest were considered.
Training Staff on Proper Green Marketing Practices
Sustainability training should permeate every level of the organisation, fostering a culture where every decision considers people, planet and profit. This approach enhances ESG reporting and employee engagement. Companies can create green teams, incorporate sustainability into job descriptions and reward employees for sustainable initiatives.
The Green Claims Code has a significant influence on businesses, pushing them towards real, verifiable actions for sustainability rather than hollow claims. This framework encourages companies to back up their environmental statements with solid evidence, leading to more transparent and honest marketing practices. By following the code's principles, businesses are not just talking the talk but walking the walk when it comes to environmental responsibility. Our PhD-level sustainability experts have created a simple guide to help ensure your organisation understands the code. The Tunley Environmental Green Claims Code Guide contains a step-by-step checklist on how to comply with the regulations, as well as examples of compliant and non-compliant messaging.